[kictanet] Fwd: SV: [AfrISPA.Discuss] Undersea cable plan tangled in acrimony inSouth Africa
Eric Osiakwan
eric at afrispa.org
Wed Sep 12 10:29:28 EAT 2007
fyi from the AfrISPA discuss list....
Begin forwarded message:
> From: "Anders Comstedt" <anders at ssvl.kth.se>
> Date: 9 September 2007 21:52:19 GMT+03:00
> To: <Discuss at afrispa.org>
> Subject: SV: [AfrISPA.Discuss] Undersea cable plan tangled in
> acrimony inSouth Africa
> Reply-To: Discuss at afrispa.org
>
> Frank,
>
> You are right that everyone else but RSA needs a cable to RoW much,
> much
> more than the good folks south, also that the thing has got stuck in
> political concerns and power games. The good thing is, however,
> that the
> general consensus on the needs, commercial impact and development
> leverage
> of a widely available optical fibre cable has shifted from cold to
> warm.
>
> Technically, there is no need for an East African submarine cable
> south
> beyond Maputo at all, as there is well protected optical fibre
> Maputo -
> Pretoria on the power lines. Which, btw, RSA has effectively
> prevented open
> & fair use of during several years, effectively leaving Maputo on
> VSAT for a
> much longer time than necessary. So SA could connect that route,
> already
> today, to any cable from the north that lands close to Maputo.
>
> Now two small issues:
> First, RSA companies are major stakeholders in any submarine cable
> proposal
> that has emerged the last couple of years, dominant to the extent
> that it
> has made other parties concerned on who actually will control a
> cable system
> supposed to be a joint project with some 23 participants. The
> Telkom SA part
> of EASSy is closer to 50% than 1/23, and may well increase to >50%
> if Telkom
> buys any of the other participants, which has been contemplated by
> some
> pundits.
> Second, the RSA market is a closed market where only a very limited
> number
> of politically approved players are carefully allowed to
> participate in
> sharing the revenues of an artificially high price level market.
> Who wants
> to rock that boat of the industry insiders? So you have strong
> concerns
> among established telecom industry interests in RSA to not change
> the game
> for as long as possible. According to some analysts, keeping this
> inflated
> price for another year or so is worth much more money in excessive
> profits
> than the entire investment in EASSy. Why give away money by a too
> early
> price reduction?
>
> So what does the rest of the SSA think about this? And also the
> international community in general, forking in quite a bit of the
> financing
> into any of the cable projects suggested?
> Well, they probably don't go easily on potentially offending the
> single
> biggest partner they have in all other trade and political issues
> in SSA by
> suggesting a solution without clear RSA involvement. The bean
> counters then
> look at the traffic volumes and say that any project without the
> RSA volume
> will be a commercial disaster, and what about restoration if we
> cannot reach
> and have an agreement with SAT-3?
>
> You end up in a situation where the question is: Who blinks first?
>
> If there is no initiatives potentially making any EA submarine cable
> roll-out happen ex RSA, there will be little change in any broader RSA
> stance as long as the revenues and influence of the joint RSA
> political and
> industrial telecoms interests are lined up the way they are.
>
> Others have to consider their positions and responsibilities in
> relation to
> all this. Personally, I cannot help looking at TEAMS in the light
> of the
> above.
>
> What about an EASSy project, now financed even more by international
> development money, first built to those countries where an open market
> exist? Gradually expanding South instead of gradually expanding North?
>
> Loosing a big Telkom part of the financing is of cause not what those
> banking, operator and vendor interests want that have got the
> financial
> EASSy-packet stitched together with difficulty.
>
> The interesting thing, however, is that the financing of EASSy
> seems to have
> been growing softer by the day during 2007. What was a year ago
> portrayed as
> a pure commercial financing is now looking more and more to be
> relying upon
> soft elements just short of labelling significant amounts pure grants.
>
> This shift opens up interesting considerations on the entire
> development
> financing too: Shall such money be used to shelter commercial
> interests from
> competition, actively preventing driving user prices down?
> Maintaining artificially high profits to protected operators in
> restricted
> markets is not necessarily in line with what should be eligible for
> support.
> At some point of time that discussion will re-surface too in a
> similar way
> as it did at WSIS when the WBG took a clear stance pro openness and
> equal
> availability of cable capacity for all interested parties.
>
> I have a hard time understanding how EU institutions can provide
> not only
> the initial semi-soft "commercial loans" but now more of softer
> financing to
> any venture so openly wide open to violating several EU principles
> regarding
> telecoms and general market openness. Sure, as long as it stayed
> under the
> radar various individuals could claim ignorance, but that is
> getting harder
> and harder with the EA debate on why an obvious need is not met in
> a fair
> way. Supporting a questionable package could soon kill a promising
> career
> inside the EU system rather than promoting it. Time must be running
> out on
> the non-open conditions?
>
> The alternatives to EASSy now visible, funded by pure commercial
> capital
> like SEACOM, makes it even more questionable to give soft funds to any
> set-up having questionable market development properties. Rather, it
> reinforces the need to justify any support by such funds with even
> MORE
> arguments on the project openness and development leverage.
>
> Both EASSy and SEACOM seem to have a hard time in RSA as long as
> they are
> not clearly controlled by local interests.
>
> Both seem up for a hard choice in RSA:
> Give in, as little as possibly, but the control must be in RSA hands
> Pass RSA in an immediate implementation of the rest of the system, or
> Delay the whole thing, waiting for RSA to blink in fear of being
> left out.
>
> Other EA stakeholders need to consider what situation they like to
> promote
> for any cable project in the above respect. Don't just ask the cable
> projects to carry the burden of dealing with this political risk
> all by
> themselves, later blaming them for whatever compromise they make! A
> risk now
> being the main obstacle between the current deficit and a state-of-
> the art,
> reasonably priced cable connection for SSA to RoW.
>
> The worst alternative for RSA operators is probably a combination
> of an
> early East-West SSA link (EA to Angola or Nigeria?) with two new
> terrestrial
> and/or submarine links north to the Mediterranean from EA. All the
> current
> transit traffic from RSA neighbours to SAT-3 will then disappear in
> a flash.
> Instead, RSA may be faced with not only a very limited interest
> from others
> to consider an EA submarine cable south, but a desire to making RSA
> operators subject to a similar transit pricing practice that Telkom
> SA has
> up to now offered its neighbours in connecting to SAT-3.
> Considering the
> profits in the closed RSA market such a scenario may, however,
> still be a
> good alternative to some players in that local market as it may
> delay the
> tide by another year or two.
>
> The frustration over the EA development lag by the delay in cable
> implementation is causing a lot of impatient folks to say that "the
> only
> important thing is that a sub marine cable gets built". That is
> understandable but dangerous. Remember SAT-3.
>
> Dispatched over an industry standard 100Mb/s connection to the home,
> commonly available for a couple of Big Macs/month in an open,
> competitive
> market.
>
> Anders
>
> -----Ursprungligt meddelande-----
> Från: Discuss-owner at afrispa.org [mailto:Discuss-owner at afrispa.org]
> För Frank
> Habicht
> Skickat: den 9 september 2007 09:27
> Till: Discuss at afrispa.org
> Ämne: Re: [AfrISPA.Discuss] Undersea cable plan tangled in acrimony
> inSouth
> Africa
>
> Question(s)...
>
> Who _needs_ (badly) that Eassy lands in SA ?
> I'm not up-to-date with most things, but I guess for many the
> connection
> to Sudan will connect them to the world (maybe without redundancy, but
> maybe that redundancy would be clumsy anyway).
>
> I think the ones who need Eassy to land in SA the most are SA
> operators
> (maybe excl. Telkom, maybe not?).
>
> For everyone else only one thing is important: that this thing gets
> built!
> If SA wants to stay with the connectivity they have now.... fine with
> me. I don't want myself to stay with VSATs.
>
> So, let the SA companies loose out. Let them take it up with their
> government. Or change the same if necessary. Their problem.
>
> The worst thing that can happen in my little uninformed opinion is
> that
> this political (*&^%()*&% delays the building of that cable.
>
> So, can we continue to build it up to Maputo, please?
> The ..... opinion of politicians in SA shouldn't prevent ~20 other
> countries to get proper connectivity.
>
> For how long has this project dragged on already? For how long been
> delayed by politics?
> Wasn't the contract done to start building?
>
> Frank
> impatient, disappointed, upset
>
>
> On 9/8/2007 3:10 PM, Eric Osiakwan wrote:
>> The sole active supporter of the NEPAD-backed Broadband
>> Infrastructure
>> Project that will never be built, the South African Government is
>> trying
>> to arm-twist EASSy because the project has slipped free of NEPAD
>> control. This is the arrogant display of naked political power that
>> those who have not signed the NEPAD political protocol feared would
>> occur if the larger African brother failed to get its way.
>>
>> The 10,000km Eassy cable will be 27% owned by Telkom, Neotel and MTN,
>> and is designed to provide desperately needed cheap bandwidth to 21
>> African countries. But SA's communications department has taken
>> umbrage
>> at what it sees as the commercial nature of the enterprise, and
>> intends
>> to withhold landing rights.
>>
>> Instead, the government will use taxpayers' money to roll out two
>> rival
>> cables heading east and west, jointly known as the Nepad Broadband
>> Infrastructure Network. Denying landing rights to EASSy will be
>> detrimental to the three local companies, which, they say, have
>> had the
>> foresight to invest in the project to slash bandwidth prices.
>>
>> It will also be anticompetitive if EASSy members are not allowed
>> to sell
>> bandwidth to other operators in SA, says Mohsen Khalil, a director
>> with
>> the International Finance Corporation (IFC). He also says the
>> government's hostility shows it has not understood a new
>> commitment the
>> consortium has made to open access.
>>
>> The IFC is part of the World Bank, and is investing $32,5m to help
>> about
>> 15 small operators participate in Eassy. Yet the director-general
>> of the
>> communications department, Lyndall Shope Mafole, remains vehemently
>> opposed to the project. "Eassy is bad news for developing
>> countries that
>> are not at the level of SA," she says.
>>
>> "We have many problems with it. The fact that you work for the World
>> Bank makes you think you know what's good for Africa even when you
>> don't
>> live in Africa. I find that quite insulting."
>>
>> Because Eassy's biggest shareholders are giants like MTN and Telkom,
>> their bulk buying power gives them an advantage over smaller
>> operators
>> also trying to buy and resell capacity to customers in each
>> country, she
>> says.
>>
>> "South African companies could use their dominance to compete
>> unfairly
>> in other countries. We have a responsibility as the government to
>> ensure
>> there is fair competition. We are not willing to look at something
>> that
>> is clearly discriminatory. We couldn't rest with a clear
>> conscience." If
>> the South African Government has this responsibility, why has it not
>> exercised it over Telkom's SAT3 prices? The Department of
>> Communications
>> talks the talk but does not walk the walk.
>>
>> A bigger issue threatening not only Eassy but also other foreign-
>> backed
>> cables is a demand that any cable landing in SA is partly owned by
>> local
>> companies. The minimum percentage of local ownership will be
>> determined
>> by Communications Minister Ivy Matsepe Casaburri.
>>
>> The instant reaction is to question whether SA has the right to do
>> that.
>> It has, under the Electronic Communications and Transactions Act,
>> Shope-Mafole says. The second reaction is to assume that foreign
>> investors will be deterred. The government's belligerent stance in an
>> effort to promote local industries may backfire and deprive
>> consumers of
>> cheaper bandwidth if foreigners opt to bypass SA's coastline.
>>
>> Nonsense, Shope-Mafole says. "There are millions of people who
>> want to
>> enter into arrangements and land in SA. We welcome anybody who
>> wants to
>> invest in submarine cables that land on South African soil, but we
>> need
>> South African companies to invest."
>>
>> Although Eassy boasts 27% local ownership, that may not be enough.
>> Seacom, another private cable already under construction, must also
>> recruit local investors for the plans on its map to match reality.
>> Seacom has signed a deal for SA's second network operator, Neotel, to
>> operate the local landing station, which does not impress the
>> government.
>>
>> Shope-Mafole said the demand for local ownership in the entire cable
>> linking India to Europe via SA was discussed with Seacom's mostly US
>> investors over a cup of coffee. "I don't think they thought it was
>> unreasonable. I wouldn't say they loved it, but they didn't throw
>> their
>> cups at us," she says.
>> (Source: Business Day)
>>
>>
>>
>> Eric M.K Osiakwan
>> Executive Secretary
>> AfrISPA (www.afrispa.org <http://www.afrispa.org>)
>> Tel: + 233.21.258800 ext 2031
>> Fax: + 233.21.258811
>> Cell: + 233.244.386792
>> Handle: eosiakwan
>> Snail Mail: Pmb 208, Accra-North
>> Office: BusyInternet - 42 Ring Road Central, Accra-North
>> Blog: http://blogs.law.harvard.edu/eric/
>> Slang: "Tomorrow Now"
>>
>>
>>
>>
>
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Eric M.K Osiakwan
Executive Secretary
AfrISPA (www.afrispa.org)
Tel: + 233.21.258800 ext 2031
Fax: + 233.21.258811
Cell: + 233.244.386792
Handle: eosiakwan
Snail Mail: Pmb 208, Accra-North
Office: BusyInternet - 42 Ring Road Central, Accra-North
Blog: http://blogs.law.harvard.edu/eric/
Slang: "Tomorrow Now"
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