Seacom, and any other new cable (such as EASSY or WACS), will want to make as healthy a margin as possible in order to start realising a return on their substantial investment.
This is the word from Anton Potgieter, MD of Huge Telecom. He adds that the new cable operators will have to carefully weigh up the cost versus volume equation, but it is unlikely that the cost mark will fall to the levels being punted.
"Once EASSY and WACS have been properly established we may well see some price wars erupt as competition intensifies, but since the other cables are only set to land next year, this is still some time away," he says.
Seacom, sue to go live within days, will only see price adjustments as carriers release products based on the cable.
"It will be interesting to see which companies move first in this space and how quickly they move," says Potgieter. "Also, whether existing customers are offered migration plans on to new prices and packages will be an indication of whether cheaper broadband is going to be just another sales tool, or whether companies genuinely want to lower the cost of bandwidth in South Africa.
"Large ISPs have, however, already pointed out that they aren't in a position to switch all their traffic to Seacom come 01 July as they have existing contracts in place which will first need to lapse, delaying the benefit to the consumer even longer."
In addition, says Potgieter, Seacom won't have any impact on local bandwidth costs.
"Seacom unfortunately has no impact on the cost of connecting offices in Johannesburg, Cape Town and Durban. This is a local issue and, though the marketplace has legally been liberalised, in practice this is a much different story. Telkom still controls the local loop and though there is plenty of dark fibre in the ground, only a small margin of it reaches over the pavement and onto a customer's premises.
"While the developments in the sector are positive and bode well for future growth, we must ensure we take a realistic view of the situation and not allow ourselves to be sucked in to all the hype, as happened in 2005 with VoIP," Potgieter adds.