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Firms Race to Update E. Africa Telecom - New York Times 
http://www.nytimes.com/aponline/technology/AP-Eastern-Afric...
1 of 3 6/5/07 1:31 PM
June 3, 2007
Firms Race to Update E. Africa Telecom
By THE ASSOCIATED PRESS
Filed at 5:27 p.m. ET
NAIROBI, Kenya (AP) -- Plans to lay an undersea fiber-optic cable off 
eastern Africa could be the
beginning of the end of crackling long-distance calls, slow dial-up 
Internet connections and universities
without e-mail.
Four projects are in the works to link 22 eastern, central and southern 
African countries to the world's
network of submarine cables and 21st century communications. They would 
enable cheaper
international calls with no static and fast Internet access.
The first cable could be finished as early as March.
At the moment, the Indian Ocean's eastern African seabed is the only one 
in the world without a
submarine fiber-optic cable, forcing the region to rely heavily on 
limited and expensive satellite links. As
a result, countries along the coast and in its hinterland have some of 
the highest communications costs in
the world.
Even though fiber-optic links would drive down communication costs for 
businesses and consumers, it
also could be a big opportunity for entrepreneurs.
''We think in general that the high price of satellite communication is 
creating a high price, artificially
low demand market and because of that we think there is pent-up 
demand,'' Brian Herlihy, vice
president of New York City-based Herakles Telecom LLC, which is leading 
one of the projects.
A 2005 study by a U.N. task force found that 90 percent of calls between 
African countries are routed by
satellite through Europe or North America at a cost of $400 million a 
year. Direct calls would be cheaper,
though the study did not say by how much.
The cost of laying the fiber-optic cable -- stretching up to 8,000 miles 
along selected points in the Indian
Ocean -- is estimated to range from $100 million to $200 million. 
Individual countries will spend even
more laying fiber-optic cables inland and connecting their networks to 
the submarine cable.
State-owned and private African telecommunications companies, the World 
Bank and other
international financial institutions, governments and foreign private 
investors are funding the projects.
The oldest, the four-year-old Eastern Africa Submarine Cable Systems, or 
EASSy, was conceived by a
group of East African businessmen in November 2002.
The cable can ''contribute to the expanding intra-Africa trade by 
providing better communication in the
region,'' Abiodun Jagun, a researcher in information communication 
technologies at the University of
Manchester, said in a February paper.
Competition among companies rolling out the new cables could drive 
prices down even further and
deliver results faster.
Firms Race to Update E. Africa Telecom - New York Times 
http://www.nytimes.com/aponline/technology/AP-Eastern-Afric...
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One project would not necessarily cancel another out -- India, for 
example, has several submarine
fiber-optic cables linking it with the international telecom infrastructure.
Ethiopia, the most populous country of the region, thinks the rival 
cables offer it choice and the
opportunity to negotiate favorable prices.
''The more alternatives, the better,'' said Ethiopian Prime Minister 
Meles Zenawi, who leads the Horn of
Africa nation of 77 million. The landlocked country will be linked to 
the undersea cable through either
neighboring Djibouti or Kenya.
Kenya, one of the most dynamic economies in the group, wants to drive 
down telecommunications costs
to tap into the multibillion dollar outsourcing industry and make Kenya 
an information technology hub,
said Bitange Ndemo, the country's information and communications 
permanent secretary.
Kenya's nascent call center business has grown from employing 200 people 
last year to 3,000 this year,
despite relying on expensive satellite-based communications.
To get more companies to give their business to Kenyan call centers, the 
country needs to increase its
bandwidth up to 500 megabits per second by year's end and subsidize the 
cost until a submarine
fiber-optic cable is working, Ndemo said.
For Kenya, the fiber couldn't come fast enough.
The Eastern Africa Submarine Cable Systems project has been held up 
because of negotiations over its
ownership and funding, and debate about whether it will be for-profit.
Worried the project was taking too long, Kenya teamed up with the United 
Arab Emirates
telecommunications company Etisalat, and set up the East African Marine 
Systems, or TEAMS, project
in November. Kenya will finance 40 percent of the project, Etisalat 20 
percent, and still to be identified
private Kenyan investors the remaining 40 percent.
Ndemo said that the government will soon invite bids for a company to 
lay the cable between Kenya's
Indian Ocean port of Mombasa and Fujairah in the United Arab Emirates 
and have Kenyans connected
to it by March 2008.
Kenya also remains a participant in the Eastern Africa Submarine Cable 
Systems project.
Meanwhile, a private company -- Kenya Data Networks -- is involved in a 
third initiative and is
negotiating with a subsidiary of the Indian conglomerate, Reliance 
Group, to lay a cable between
Mombasa and near the coast of Yemen. Kenya Data Networks Managing 
Director Kai Wulff said that his
company would not invest in laying cable, only guarantee clients for it.
The most recent project is led by U.S.-based Herakles Telecom. In April, 
the company commissioned a
survey of the Indian Ocean and expects its cable to be in place and in 
use by March 2009. Herlihy,
Herakles' vice president, declined to identify the private investors who 
make up the company.
He said the company will not only be laying an undersea cable but also 
connect major urban areas of
Kenya, Madagascar, Mozambique, South Africa and Tanzania. The undersea 
cable and inland networks,
called SEACOM, will cost $300 million, Herlihy said.
''Laying our cable will lead to a low price, high-demand market and 
change the price paradigm in the
region,'' Herlihy said.
Firms Race to Update E. Africa Telecom - New York Times 
http://www.nytimes.com/aponline/technology/AP-Eastern-Afric...
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