[kictanet] Fwd: SV: [AfrISPA.Discuss] Undersea cable plantangled in acrimony inSouth Africa

Fri Sep 14 08:28:45 EAT 2007

This is from the venerable news magazine The Economist:

Telecoms in Africa

Not so EASSy
Aug 9th 2007
>From The Economist print edition

A plan to run a submarine cable down Africa's east coast runs into difficulty

THE East African Submarine Cable System (EASSy), a project to wire up
several African countries with high-speed optical fibre, is not living
up to its name. The plan, hatched in 2003, was simple enough: lay an
9,900km (6,200-mile) submarine cable along the east coast of the
continent, from Sudan to South Africa, touching at several points
along the way, and then link it up with the rest of the world. But the
scheme has become entangled in disagreements between operators and
governments over its business model.

The logic of the project is clear: extra connectivity would reduce
Africa's dependence on the SAT-3 cable, which runs from Iberia down
the west coast of the continent, and on expensive satellite links, the
only option in some countries. Cheaper connectivity would promote
development and make African countries more attractive destinations
for offshoring. Connecting a call-centre with 25 agents is said to
cost $17,000 a month in Kenya, compared with $600–900 elsewhere.

The disagreement centres on the structure of the EASSy consortium,
made up of around 30 African and international telecoms operators. The
governments of some countries, including South Africa, want to avoid a
repeat of what happened with SAT-3. That cable is run by a consortium
that allows only one telecoms operator to sell capacity in each
country. The lack of competition means prices are so high that
satellite is often cheaper, says Alan Mauldin of TeleGeography, a
consultancy.

To prevent such an outcome with EASSy, several governments, acting
through the New Partnership for Africa's Development (NEPAD), have
threatened to withhold landing rights for the cable unless their
proposals for how to run it are accepted, says Edmund Katiti of NEPAD.
They want governments to join the consortium and to have a veto over
strategy; and they want any African operator to be able to buy
wholesale capacity at a regulated (ie, low) price. They are even
talking of building an entirely new cable on these terms, under
NEPAD's supervision.

The operators in the EASSy consortium say this is an attempt to hijack
an existing commercial project and micromanage the industry. They do
not like the sound of government vetoes or regulated pricing. And
EASSy's current rules will mean that consortium members will compete
to sell capacity in the same markets, driving down prices, says Michel
Rouilleault of Axiom, a consultancy attached to EASSy.

Critics respond that these rules, the details of which are unclear but
which link the cost of access to the size of the operator's
investment, could lead to high prices in countries where the local
operator has only a small stake in the project. In South Africa, where
several competing operators have stakes, there will be plenty of
competition, but this may not be true elsewhere.

The delays to EASSy have helped to spur other projects, including
SEACOM, which has just appointed a contractor to lay a cable along a
similar route, and TEAMS, which will link Kenya with the United Arab
Emirates. India's Flag Telecom also plans to lay a cable to Kenya. At
the moment there is insufficient demand to support so many cables,
says Russell Southwood, an expert on African telecoms. But that may
prompt operators to offer low prices to stimulate demand. So whatever
happens to EASSy, getting cheaper bandwidth along Africa's east coast
could soon be a lot less difficult.

On 9/13/07, Manthi, Joseph <Joseph.Manthi at fmr.com> wrote:
> Alex
> Just know that you have my help if you need it.
>
> Joe
> --------------------------
> Sent from my BlackBerry Wireless Handheld
>
>
> ----- Original Message -----
> From: Alex Gakuru <alex.gakuru at yahoo.com>
> To: Manthi, Joseph; jmanthi at gmail.com <jmanthi at gmail.com>
> Cc: kictanet at lists.kictanet.or.ke <kictanet at lists.kictanet.or.ke>
> Sent: Thu Sep 13 14:09:06 2007
> Subject: Re: [kictanet] Fwd: SV: [AfrISPA.Discuss] Undersea cable plantangled in acrimony inSouth Africa
>
> Hi Joe,
>
> I'd be glad to mobilise and work with all consumers
> but if you on note my message, I requested Dr. Ndemo
> to give us that chance. We wait and see what tomorrow
> brings.
>
>
> Alex
>
> --- "Manthi, Joseph" <Joseph.Manthi at fmr.com> wrote:
>
> > Alex
> > Please I beg you to prepare that SV to buy TKL. Let
> > me know if youi need help in doing this.
> >
> > Thanks
> > Joe
> > ------Original Message------
> > From: Alex Gakuru
> > Sender:
> >
> kictanet-bounces+jmanthi=gmail.com at lists.kictanet.or.ke
> > To: jmanthi at gmail.com
> > Cc: KICTAnet ICT Policy Discussions
> > Sent: Sep 13, 2007 12:43 PM
> > Subject: Re: [kictanet] Fwd: SV: [AfrISPA.Discuss]
> > Undersea cable plantangled in acrimony inSouth
> > Africa
> >
> > wow! "Open Access" is music to many no just my ears.
> >
> > I wish you failure at selling Telkom this way,
> > honestly. That said, could you allow me to organise
> > a
> > Special Purpose Truck for Kenyan consumers to invest
> > in Telkom more money that the Shs. 5 Billion? Fast
> > tracking (READ get round) NSE rules?
> >
> > Thanks.
> >
> > --- bitange at jambo.co.ke wrote:
> >
> > > Dear Alex,
> > > Telkon will not own Teams.  The Government of
> > Kenya
> > > will own 40% stake in
> > > the Teams SPV while regional operators and
> > investors
> > > will own 45%.  The
> > > remaining 15% shall be owned by Etisalat.  The
> > > Government shall ensure
> > > open access in both Teams and the Terrestrial
> > > Networks to enable both
> > > large and small enterprises to compete.
> > >
> > > Do not worry about the sale of TKL since we have
> > not
> > > sold it yet and we
> > > shall not sell it if the deal is not good.
> > >
> > >
> > > Regards
> > >
> > >
> > > Ndemo.
> > >
> > >
> > >
> > >
> > > > Before quickly "thirding", I urge on the need to
> > > have
> > > > light shed on TEAMS investment structure,
> > > otherwise we
> > > > could end up never getting the envisaged cheap
> > > > bandwidth.
> > > >
> > > > Why? After 51% of Telkom Kenya is sold to
> > British
> > > > Telcom (or another) then whoever will have the
> > > cable
> > > > ownership transfered to them thus could dictate
> > > what
> > > > the final price will be.
> > > >
> > > > Little Telkom sale (Shs 5 Billion) is happening
> > > just
> > > > when the promising CDMA is getting rolled out.
> > > Going
> > > > by last year's Safaricom profits, the sale value
> > > is
> > > > also K
> >
> > --------------------------
> > Sent from my BlackBerry Wireless Handheld
> >
> >
>
>
>
>      ____________________________________________________________________________________
> Check out the hottest 2008 models today at Yahoo! Autos.
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>
>

-- 
Joseph Manthi
CEO
MEO Ltd
http://www.meoltd.com