[kictanet] [Fwd: [Fibre-for-africa] SA considering second, cheaper undersea cable]

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SA considering second, cheaper undersea cable

By Lesley Stones, Financial Mail, April 4 2007

ARGUMENTS about the cost of bandwidth on a telecommunications cable to be
laid around Africa’s east coast could see more money pumped into a
duplicate cable laid in direct competition to the original R300m project.

A second multimillion-dollar cable to replicate the planned East Africa
Submarine System (EASSy) may be laid because of a clash between private
investors wanting to profiteer and governments demanding cheaper bandwidth
to reduce the cost of doing business and stimulate economic growth.

Partners in the long-awaited EASSy cable include Telkom, which is 38%
government owned. But yesterday the communications department’s
director-general, Lyndall Shope-Mafole, confirmed that SA might lead a
rival cable-building project because of the EASSy consortium’s
intransigence.

Ideally, the EASSy cable will be a key component in a project to increase
Africa’s bandwidth launched by the New Partnership for Africa’s
Development (Nepad). But private investors in the EASSy consortium were
more interested in profits than in providing affordable bandwidth,
Shope-Mafole said.

Telkom CEO Papi Molotsane has repeatedly said Telkom will only invest in
EASSy if it can make a decent return on its investment. The EASSy
consortium members have complained that African governments are trying to
hijack the project, with its finance committee chairman, Donald Nyakairu,
recently telling the Ugandan newspaper The Monitor that the politicians
are making unreasonable demands.

If a compromise is not reached, Nepad will lay a rival undersea
connection. “We hope it will be the same cable. There is no cable right
now but we could absolutely build another one,” he said.

Twelve African governments have signed an agreement pledging that access
to a cable linking SA to Sudan must not be monopolised by a private cabal.
International bandwidth is so crucial that Africa can no longer be held to
ransom by private companies looking to profiteer, the governments believe.

Their policy for international connectivity is dubbed the Nepad Network,
based on a submarine cable and a terrestrial network covering landlocked
countries. The policy insists that all telecoms operators, internet
service providers and other bandwidth-hungry businesses will be able to
use the cable for the same price as the companies that invested in the
infrastructure.

That is a direct attempt to prevent companies from capitalising on
Africa’s lack of bandwidth by charging exorbitant fees, much as Telkom
charges punishing fees for access to bandwidth on the Sat-3 cable around
Africa’s west coast.

In an interview with the Financial Times this week, President Thabo Mbeki
blasted Telkom for charging “absolutely phenomenal” rates for access to
Sat-3 and said the government was applying pressure on Telkom to cut its
fees.

About 10 companies in SA will be invited to invest up to $2m each to fund
the Nepad Network, whether it is based on the EASSy cable or on a rival
venture.

Technology and telecommunications companies, internet service providers
and bandwidth-intensive banks and other businesses would be asked to
invest, Shope-Mafole said.
Another investor could be InfraCo, a new state-owned entity created with a
budget of R647m to supply wholesale bandwidth.

Shope-Mafole also said the department would give Mbeki the telecoms price
cuts he was demanding when Communications Minister Ivy Matsepe-Casaburri
made some policy announcements on May 24.



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