Some challenges - Internet Society

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Transcript Some challenges - Internet Society

3rd African Peering and
Interconnection Forum
(AfPIF)
August 2012
The Role Submarine Cables can play in the
Interconnection of Africa's Internet
Aidan Baigrie
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AFPIF TODAY
“Imagine a world in which every single person on the
planet is given free access to the sum of all human
knowledge. That's what we're doing.”
Jimmy Wales, founder of Wikipedia
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AGENDA
The role of submarine players in an African Internet
• Setting the tone
• A vision of the African
Internet
“Broadband is to the 21st Century what
railways were to the 19th Century”
• Filling the void
• Summary
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INTRODUCTION
Opportunities for bandwidth providers are endless…
Where was Africa (2009)?
 Africa: the least penetrated continent in the world
 Most of Africa had no internet or was solely
dependent on costly and high latency satellite, until
recently…
AFRICA
Source: ‘Broadband penetration’ WBIS 2008
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SETTING THE SCENE
How demand is looking…
Africa view
Global view
 Demand growth is not tapering off
• Cisco predicts that mobile devices will
surpass the population by the end of the year
(US ‘11)
• Smartphones largest consumer of mobile
data (6EX/m in ’16)
• Africa mobile data traffic 104% CAGR (2011-2016) = 36x = the highest of
any continent on the planet (Low base?)
• Internet penetration here has grown 60% in 2 years (‘12)
• By 2013, more smartphones than normal phones sold says MTN (<50$)
Of 10m internet users in SA, some 8m are mobile/ wireless driven
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SETTING THE SCENE
What’s driving demand…
 Possible demand in 2100… (UN)
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SETTING THE SCENE
The way in which traditional brick and mortar industries
rules business is changing…
Demand in one day
• 172 million unique people visited
Facebook
• 400 million queries on Google
• 864 000 hours of video uploaded to
Youtube
• 294 billion emails were sent
• The first 3 bullets represent a few of the
most valuable tech companies on earth – ask
yourself…what are their assets?
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SETTING THE SCENE
This growth has come through one key concept…the
understanding that affordability unlocks demand
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SETTING THE SCENE
Affordable pricing works better, sufficient ROI and
ongoing maintenance revenues are key though
Africa’s ACTUAL demand curve
Price
Price
Africa’s PERCEIVED demand curve
Demand
Demand
2012
2009
 Price:
 Price:
o
o
3000 usd/Mb
25c / MB
 Speed:
o
o
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2-7 mbps capable BTS
0.384 - 1 mbps adsl
o
o
100 USD/Mb
R 1c / MB
 Speed:
o
o
?
70 mbps capable BTS
10 mbps adsl
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A VISION OF THE AFRICAN INTERNET
Whilst building an African Internet is driven by organic
and often random growth, there are some key ingredients
Reliable and
pervasive
Infrastructure
Building local
content
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IP enablement
and peering
… and a well-oiled regulatory
environment
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A VISION OF THE AFRICAN INTERNET
We see devotion to the following elements as key to
driving an African Internet
Key ingredients of an African Internet
 Fostering intra African connectivity through reliable and affordable
Subsea, Regional, National, Metro and Access connectivity
 Fibre to enterprises and mobile to the masses
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A VISION OF THE AFRICAN INTERNET
We see devotion to the following elements as key to
driving an African Internet
Key ingredients of an African Internet
 Fostering intra African connectivity through reliable and affordable
Subsea, Regional, National, Metro and Access connectivity
 Fibre to enterprises and mobile to the masses
 Local carrier neutral datacenters, and easily accessible open-access exchanges and meet-me
points
 Peering and sharing of local content to reduce costs, encourage uptake and drive up usage
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A VISION OF THE AFRICAN INTERNET
We see devotion to the following elements as key to
driving an African Internet
Key ingredients of an African Internet
 Fostering intra African connectivity through reliable and affordable
Subsea, Regional, National, Metro and Access connectivity
 Fibre to enterprises and mobile to the masses
 Local carrier neutral datacenters, and easily accessible open-access exchanges and meet-me
points
 Peering and sharing of local content to reduce costs, encourage uptake and drive up usage
 Intelligent IP based networks
 Cloud and mobile integration into basic m-services, hosting of content locally to provide true
mature market experiences
 And of course….a well oiled regulatory environment
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SOME CHALLENGES
We see some hurdles to overcome though…
Challenges to overcome (1/2)
 Reliability of subsea and terrestrial fibre is not optimal yet, there
needs to be further development on resilient routes and mesh metro
networks
 Fibre into Enterprises is unaffordable without critical mass (chicken and egg)
 Many Data centers still embrace crippling pricing and as such don’t facilitate regional
exchanges
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SOME CHALLENGES
We see some hurdles to overcome though…
Challenges to overcome (1/2)
 Reliability of subsea and terrestrial fibre is not optimal yet, there
needs to be further development on resilient routes and mesh metro
networks
 Fibre into Enterprises is unaffordable without critical mass (chicken and egg)
 Many Data centers still embrace crippling pricing and as such don’t facilitate regional
exchanges
 National transit is multiples more expensive than international transit in many African
countries, e.g. customers pay more to access information in their own country than the rest
of the world (don’t browse locally please)
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SOME CHALLENGES
We see some hurdles to overcome though…
Challenges to overcome (1/2)
 Reliability of subsea and terrestrial fibre is not optimal yet, there
needs to be further development on resilient routes and mesh metro
networks
 Fibre into Enterprises is unaffordable without critical mass (chicken and egg)
 Many Data centers still embrace crippling pricing and as such don’t facilitate regional
exchanges
 National transit is multiples more expensive than international transit in many African
countries, e.g. customers pay more to access information in their own country than the rest
of the world
 Whilst National IP networks exist, there is still a need for affordable pan-African regional IP
networks
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SOME CHALLENGES
We see some hurdles to overcome though…
Challenges to overcome (2/2)
 Cloud providers are finding it costly to place equipment in country and
finding it difficult to navigate the regulatory and sovereign complexity
of delivering a service in Africa
 National Policy can work against sharing resources and regional hubs
 International carriers struggle without single SLAs and predictable, reliable services [ZoomIn]
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SOME CHALLENGES
The journey of a byte goes hrough many hands before it
arrives here
Broadband Components
1 a. Mobile Phone
2a. Wireless/ Tower Fibre NW
1b. Home
2b. Last Mile/Backhaul
------------------------3. ISP (Services+Cloud)
4. Longhaul
5. Submarine capacity
6. Internet breakout
Local
cloud
3 4
5
6
Internet
2a
2b
1a
1b
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KEY STEPS
What do we believe is our responsibility in achieving an
African Internet?
SEACOM’s role
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KEY STEPS
What do we believe is our responsibility in achieving an
African Internet?
SEACOM’s role
 Working as a Network of cables
 Providing full IP services over the network with inherent resilience
through East/West breakout
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KEY STEPS
What do we believe is our responsibility in achieving an
African Internet?
SEACOM’s role
 Working as a Network of cables
 Providing full IP services over the network with inherent resilience
through East/West breakout
 Creating partnerships with terrestrial and last mile providers ot provide integrated services
(single SLAs)
 Partnership models between fibre players to utilize existing fibre and to ensure affordability of
FTTx models for ISPs
1
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KEY STEPS
What do we believe is our responsibility in achieving an
African Internet?
SEACOM’s role
 Working as a Network of cables
 Providing full IP services over the network with inherent resilience
through East/West breakout
 Creating partnerships with terrestrial and last mile providers ot provide integrated services
(single SLAs)
 Partnership models between fibre players to utilize existing fibre and to ensure affordability of
FTTx models for ISPs
 Providing capability for Exchange points in selected PoPs, bringing multiple subsea and
terrestrial cables together with customers
 Building a cloud services platform through Pamoja, that changes the way global content
players think about Africa – fostering the creation of local services and the aggregation of
international services…locally
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SOME CHALLENGES
We see some hurdles to overcome though…
Challenges to overcome
 Reliability of subsea and terrestrial fibre is not optimal yet, there
needs to be further development on resilient routes and mesh metro
networks… not to mention high quality builds…
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SOME CHALLENGES
We see some hurdles to overcome though…
Challenges to overcome
 Reliability of subsea and terrestrial fibre is not optimal yet, there
needs to be further development on resilient routes and mesh metro
networks
 Fibre into Enterprises is unaffordable without critical mass (chicken and egg)
 Many Data centers still embrace crippling pricing and as such don’t facilitate regional
exchanges
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SOME CHALLENGES
We see some hurdles to overcome though…
Challenges to overcome
 Reliability of subsea and terrestrial fibre is not optimal yet, there
needs to be further development on resilient routes and mesh metro
networks
 Fibre into Enterprises is unaffordable without critical mass (chicken and egg)
 Many Data centers still embrace crippling pricing and as such don’t facilitate regional
exchanges
 National transit is multiples more expensive than international transit in many African
countries, e.g. customers pay more to access information in their own country than the rest
of the world
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SOME CHALLENGES
We see some hurdles to overcome though…
Challenges to overcome
 Reliability of subsea and terrestrial fibre is not optimal yet, there
needs to be further development on resilient routes and mesh metro
networks
 Fibre into Enterprises is unaffordable without critical mass (chicken and egg)
 Many Data centers still embrace crippling pricing and as such don’t facilitate regional
exchanges
 National transit is multiples more expensive than international transit in many African
countries, e.g. customers pay more to access information in their own country than the rest
of the world
 Whilst National IP networks exist, there is still a need for affordable pan-African
regional IP networks
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SUMMARY
• We believe that to strive for an African Internet, one needs a clear vision
and clear plan of actions to get there
• Affordable pricing, and a grasp of how large the potential really is
• We understand the African Internet and see ourselves as not a cable, but
a Pan-African Network
• …let’s continue pushing - there is still a lot to be done
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Building the African Internet
Thank you.
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BACKUP
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THEN CAME CLOUD
Cloud computing for enterprises started to boom…
Revenue In USD ($M)
Enterprise Cloud Spending Growth to Take Off
(USDm)
$500
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0
$440
$277
$176
$114
$43
2010
$69
2011
2012
2013
2014
2015
Source: AMI-Partners (www.ami-partners.com) 2012
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THEN CAME CLOUD
This added stress to original Cloud models…already
straining under video and music services… (think Apple TV and
iTunes Match)
enterprises have more stringent requirements on cloud
services than consumers...cracks appeared…
“Gmail can be slow, but not when it’s your enterprise
solution….”
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CLOUD EVOLUTION
The cloud did a u-turn…
• The cloud is decentralizing (making click and scream…click and stream)
• IaaS, SaaS, Paas…… (Azure, EC2…)
• How does this fare for Submarine players?
o Bad right?
o Not necessarily….60hrs/min
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INFRASTRUCTURE PLIGHT
So again, the challenges are there but demand is still strong….
Yet history tells us….
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INFRASTRUCTURE PLIGHT
• Submarine cables > Commoditization
o
Sunk costs
o
Low variable cost of sale
o
Price elasticity responds to price
– so drop it…
p
High demand elasticity
v
• Over-the-top players reap the fruits
o
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All the big brands…
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INFRASTRUCTURE PLIGHT
• Some models that work
o
Stay…
o
Vertical integration (product layering)
o
Horizontal integration (value chain consumption)
o
The Pamoja model (share the apple pie)
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SOME TAKEAWAYS
• Demand BIG (driven by mobile)
• The gap is closing fast and the bullwhip may be there…
• Demand not going away in Africa
• But there are challenges for Broadband infrastructure players
• Cloud isn’t one of them – contrarily as we grow more
dependent on cloud services, the threads that link the cloud
are more critical than ever
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…
Random facts on YouTube.
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INTRODUCTION
London to CT shows how disproportionate costing is &
the important role of competition in Fibre Procurement
Distance
Broadband
value
Price/unit multiplier
(Fixed line)
H
Competition
Last mile (1%)
Fibre
Price $
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Backhaul (9%)
Submarine (90%)
SEACOM
SAT 3 (Telkom)
SAFE (Telkom)
WACS (Telkom)
EASSy
Ace?
SAex?
…
Submarine (50%)
Backhaul (30%)
Last mile (20%)
6x
1x
M
Telkom
Neotel
BBI
DFA
NLD
…
36x
L
Telkom
…
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