Africa: Cheaper fibre prices will put the squeeze on national backbone prices

Africa’s operators say they cost their national backbone prices based on distance. The basis is that the further you want your traffic carried, the more it costs. However, this logic will soon be challenged by new, cheaper international bandwidth costs. If it costs more to send traffic from Johannesburg to Cape Town or from Lagos to Abuja than it does from any of these places to Europe, then national arbitrage will have well and truly arrived. Russell Southwood looks at what is likely to happen.