Steve Song's undersea cables map (click to enlarge)

A senior telecommunications industry executive on Tuesday warned against the dangers of a price war in international bandwidth capacity in Africa.

Taj Onigbanjo, head of the Middle East & Africa region at UK-headquartered telecommunications operator Cable & Wireless, told the Submarine Networks World Africa 2010 conference in Sandton that a price war would be damaging for operators.

Onigbanjo says international bandwidth prices in Nigeria, in particular, are plummeting as new cable systems come on stream. Nigeria, which had been served exclusively by the Sat-3 cable until recently, now has the Main One system, and other cables, including the West African Cable System (Wacs) and the Africa Coast to Europe (Ace) cable in the works.

“New operators in Nigeria are immediately slashing prices by 50% to 60%,” Obigbanjo said. “Personally, I think that’s a bit crazy. If you look at the return on investment they have to make, I can’t understand how they’ll make that sort of return with that sort of cut.

“With 50% to 60% reductions, the whole thing is very confused at the moment,” Obigbanjo said. “There’s a lot of panic and uncertainty. I don’t know how it can be regulated, but a price war is not in anyone’s interest.” — Duncan McLeod, TechCentral