Investing in undersea cables for Africa’s connectivity

Casper Kondo Chihaka 5 June 2012 ME Wholesale Services

2

… submarine cables ...then and now ...

3

The days when telecommunication competition was a choice between a telegraph or a message by ship, oh how things have changed!

The first intercontinental submarine cable between America and the UK was financed with help from interest guarantees, exclusive landing rights for up to fifty years, cash grants, land grants and provision of ships by interested governments. The 1858 business plan envisaged a total cost in the vicinity of 1 million pounds.

Capacity was estimated at up to 18 words per minute (14.5 bits per second) and would be charged at 2s.6d. per word. It was assumed that this throughput would be maintained for sixteen hours per day, 300 days per year, for a return of four hundred thousand pounds per annum.

Not accounting for inflation, this would price an STM1 at over twenty million pounds per minute.

Based on the above a regular international voice call, that uses a 64kb/s channel with IP compression at 8:1 would be priced at a rate of R16,121 per minute! And Telkom only charges 52c per minute including VAT!!…

Extract from a paper by Robin Russel on “NETWORK FINANCING AND THE IMPACT ON INDUSTRY DIRECTIONS” in 2004

THE BUSINESS CASE FOR THE 1st TRANSATLANTIC CABLE

4

Why undersea cable? A brief look at how intercontinental telecommunications evolved in South Africa.

PERSPECTIVE ON TECHNOLOGY

1879: SA first international telegraph cable linking SA to Yemen from Durban (single channel morse code) 1899: A telegraph cable linking SA with Britain via islands of St Helena and Ascension. 1924: Telegraph cables peak with the era of radio transmission that enabled actual voice conversation between people; 1969: The first trans-continental coaxial submarine cable for SA (SAT1) enabling 360 high quality simultaneous voice channels; 1975: Telkom establishing several large satellite earth stations at Hartbeeshoek 1992: The advent of fibre reintroduced submarine cable as an alternative means to satellite for high volume communications with the SAT2 cable -15,350 x 64kbs circuits (42 x SAT1 or 1.25Gb/s) 2002: Optical amplifier technology resulted in the next leap in telecommunications bringing the SAT3/WASC/SAFE to our shores, initially with a capacity of 20Gb/s (16x SAT2), but within 7 years the capacity was upgraded to 340Gb/s (268x SAT2) 2012: WACS went live on 11 May 2012 with an initial design capacity of 5.12Tb/s (>4,000 x SAT2)

‘A single modern intercontinental fibre optic cable has more capacity than most, if not all, of the world’s satellites combined’

5

SAT3/WASC/SAFE was practically the only cable serving a number of Sub Saharan African countries in the past decade; the past 3 years have however seen a vast array of submarine cables deployed on the continent

FIBRE OPTIC CABLES DEPLOYED IN SUB SAHARAN AFRICA

Map image courtesy of Wikipedia – Author: Shuttleworth Foundation

6

… do we need multiple cables? …

7

Some disasters are also submarine cable threats

7

THE NEED FOR MORE THAN ONE CABLE: DISASTER RECOVERY

8

The Mtunzini cable landings for SAFE; SEACOM and EASSy

SAFE

SEACOM

EASSy

600m

THE NEED FOR MORE THAN ONE CABLE: MTUNZINI

9

The Melkbosstrand Cable Landings for SAT-2; SAT3 and SAFE

9

2km

SAT-3

SAFE

SAT-2

THE NEED FOR MORE THAN ONE CABLE: MELKBOSSTRAND

10

A third international submarine cable gateway for South Africa

Melkbosstrand and Mtunzini are completely diverse

Several examples exist of simultaneous cable impacts

Japan earthquake (March 2011) – 4 cables

Mediterranean Sea (December 2008) – 4 cables

Earthquake, Taiwan (December 2006) – 5 cables

Bulk Carrier Anchor drag – SA (Nov 1992) – 2 cables

Ship dragging anchor in the Red Sea (Feb 2012) – 3 cables

Rapid spread of East African Rift fault lines towards SA

WACS Design Capacity ≈ Sum of all other cables landed in SA

MLK

YFN

SAT-3

SAT-2

SAFE

WACS

50km

THE NEED FOR MORE THAN ONE CABLE: YZERFONTEIN

A 3rd gateway out of South Africa is essential; Yzerfontein is an alternate landing for cable systems in SA

11

WACS – A new breed of submarine cable

12

… Telkom brings the capacity home …

13

SAT-3/WASC

340 Gb/s SAFE 440 Gb/s

EASSy 1.4Tb/s

SAT-3/WASC & SAFE

SEACOM

EASSY (Jul 2010)

WACS (Jun 2011)

EIG (Jun 2010)

SMW3

COL3

EIG 2.56Tb/s

Design Capacity at 10Gb/s wavelengths depicted

WACS 5.12 Tb/s

SEACOM

1.28Tb/s

EXISTING SC

LANDINGS

SAT-3/WASC

SA - MLK

Angola

Gabon

Cameroon

Nigeria

Benin

Ghana

Ivory Coast

Senegal

Canary Islands

Portugal

SAFE

SA - MLK

SA – MZN

Reunion

Mauritius

India

Malaysia

SMW3

Malaysia

India

Middle East

Europe

COL3

Portugal

USA

SEACOM For

use as required

SA – MZN

Mozambique

Madagascar

Tanzania

Kenya, Djibouti

India, Egypt

France, UK

FUTURE SC

LANDINGS

EASSy

SA - MZN

Mozambique

Madagascar

Dar es Salam

Tanzania

Kenya

Somalia

Djibouti

Sudan

EIG

India; Oman

UAE; Djibouti

Saudi; Egypt

Libya; Monaco

France; Gibraltar

Portugal; UK

London PoP

WACS

SA - YZF

Namibia

Angola

DRC

Congo

Cameroon

Nigeria

Togo

Ghana

Ivory Coast

Cape Verde

Canary Islands

Portugal

UK

London Pop

SMW3 160Gb/s

COL-3

320 Gb/s

TELKOM CORE GLOBAL SUBMARINE CABLE NETWORK

14

SIMPLIFIED NETWORK DIAGRAM

Delivering Internet Connectivity to a customer is a function of many things…

Local Internet

WWW

Customer

Central Office MSAN

Content

Local IP peering

Content

SDC

Remote MSAN

OLO’s / ISP’s

Copper Copper

Copper

Fibre

Access Network

Other Players

Metro-Ethernet Aggregation Network

IP Network

IP transit

IP connect / SAIX

Submarine

cables

15

NATIONAL & LOCAL TRANSMISSION NETWORK: CARRYING DATA TRAFFIC ACROSS 143,000 KM OF FIBRE

16

NATIONAL TRANSMISSION NETWORK: RESILIENCE

ASTN Grooming Node

Transparent Lambda Handover

LH DWDM

Metro/Regional

Direct Fibre Connectivity

International Link

FIFA 2010 Stadium

SAT-2

SAT-3

SAFE

Pretoria 2

Kimberly

Durban 1

Durban 2

Nelspruit 1

SAFE

KP

PC

Upington

Melkbos

Strand

Cape

Town 1

Cape

Town 2

Port

Elizabeth 1

Port

Elizabeth 2

Mtunzini

Bloemfontein 1

Bloemfontein 2

Jo’burg

1

Johannesburg 2 Johannesburg 3

Pretoria 1

Rustenburg 1 Rustenburg 2

Polokwane 1 Polokwane 2

Nelspruit 2

• Overhead fibre replacement to reduce “accidental” fibre/route damage and ensure network stability

• “Legacy” DWDM replacement – gearing for 10Gbit/s service capability on National Network

• Regional network enhancement – providing managed capacity and consolidated network infrastructure

• Intelligence – managed control of restoration schemes across multiple fibre routes

Telkom National Network enhancements

17

Business Management; Service Management; Operational Management & Element management

Telkom Centurion Campus

National Network

Operations Centre (NNOC)

Information Technology

Data Centre

National Business

Solutions Centre (NBSC)

TELKOM NETWORK OPERATIONS, BUSINESS SOLUTIONS & IT DATA CENTRES

18

MOZAMBIQUE

NAMIBIA

BOTSWANA

ZIMBABWE

LESOTHO

PORT ELIZABETH

BLOEMFONTEIN

CAPE TOWN

(MELKBOS)

UPINGTON

SPRINGBOK

JOHANNESBURG

PRETORIA

SOUTH AFRICA

KIMBERLEY

BETHLEHEM

SWAZILAND

MTUNZINI

Oranjemund/

Alexander Bay

Ariamsvlei/

Smalvis - Nakop

Ramatlabama/

Mmabatho

Tlokweng

Nietverdiendt

Beitbridge

Komatipoort/Thornhill

Oshoek/ Golela

Ficksburg/Ladybrand

DUAL FIBRE BORDER CROSSINGS WITH NEIGHBOURING COUNTRIES

19

Taking fibre deeper into the network and new generation access nodes will enable increased broadband access speeds and coverage in commercially viable areas – “Bringing the submarine cables to your home”

AS-IS TO-BE

FTTx

Local Exchange revamp

REVAMP ACCESS: ENABLING A STEP-CHANGE IN BROADBAND CAPABILITY

• ~93% of current customer base in existing DSL coverage area

• ~2,700 remote DSLAM’s / DLC’s deployed

• ADSL and ADSL2+ technology

• Up to 10 Mbps

MSANs in central offices • xDSL/Voice combo cards technology • MSAN FTTH capable

DSLAM’s in central offices

• ADSL and ADSL2+ technology

• Up to 10 Mbps

FTTC - Increased to more than 3,700 PoP’s • VDSL2/Voice combo cards technology • MSAN FTTH capable

FTTH in selected areas • Future-proof xPON technology • Greenfield network deployments where there is not an

existing copper local loop and where these is a sufficient concentration of high-value customers (e.g. new gated communities)

• In economically viable clusters such as office parks and residential buildings where the business case makes sense

• Areas with very poor quality of copper access which would require significant reticulation investment to rehabilitate it and the business case makes sense

Local Loop

• Targeted rehabilitation of copper network

In the FTTx intervention • Reduction of average copper loop length to optimally provide

speeds demanded by the market via VDSL2

• 1.8km average copper loop length

• Rehabilitation of copper network

20

… in conclusion …

21

Technology

Intelligence

Regional and Local Coverage

National and Cross Border Coverage

International Coverage

World Class Control

Manageability

Long term

experience

State of the art

facilities

Proven Security and

QoS Manageability and Experience Facilities and Control Security and QoS Network Intelligence International Coverage National Coverage Regional and Local Coverage Technology

Value created not only by scale and presence

but also by depth, experience and the ability to innovate

THE JOURNEY TO A FUTURE-PROOF NETWORK

It is not only about investing in undersea cables for connectivity – it is about going the full distance

22