<b>
Private investors sign up for stake in cable project</b><br><br><a href="http://www.bdafrica.com/index.php?option=com_content&task=view&id=6661&Itemid=5847">http://www.bdafrica.com/index.php?option=com_content&task=view&id=6661&Itemid=5847</a><br>
<span class="nl_content"><b><br>March 27, 2008:</b>
The construction of the undersea fibre optic cable that is to connect
Kenya to the world of high speed Internet has received a big boost with
the signing of an agreement that paves the way for the private sector
to contribute to its financing.<br><br>The agreement which makes the
signatories co-owners of the East African Marine System project with
the Government, was signed last week even as the new shareholders
forced out two prospective buyers.<br><br>The new shareholder agreement
leaves Safaricom and the Government of Kenya as the anchor shareholders
with a 20 per cent stake each in the project and Wananchi Telecom with
10 per cent. Kenya Data Network and Celtel jointly acquired a 10 per
cent stake in the company while France Telecom and Econet Kenya have a
10 per cent share each. <br><br>Jamii Telkom got four per cent although it had initially expressed interest in buying 3.75 per cent. <br><br>Two
firms, Gilat Satcom and Internet Research, a Ghanaian company, were
knocked out of the ownership agreement for failing to meet the 20 per
cent local representation requirement. Each had expressed an interest
in acquiring a 1.25 per cent stake.<br><br>The identity of two local
companies that had expressed interest in the project remains unknown.
The companies are, however, said to be associated with Brian Longwe, a
Kenyan IT sector businessman.<br><br>The signing of the shareholder
pact, also known as an Escrow agreement comes after the Government
signed an initial shareholder agreement with Etisalat of United Arab
Emirates. <br><br>The Government paid 12 per cent of its total 85 per
cent ownership in the cable. Etisalat also made a down payment of $1.2
million to cover 12 per cent of its total 15 per cent ownership of the
cable.<br><br>These two payments gave Alcatel-Lucent, the company that
won the tender to build the cable from Fujairah to the port of Mombasa
. <br><br>Manufacturing the cables was to begin on March 15, this
year, but started three days later. Information ministry Permanent
secretary, Bitange Ndemo, said Alcatel-Lucent has appointed a team to
oversee construction. <br><br>The timeline for the TEAMs project indicates that it should be ready by the second quarter of next year.<br><br>Other
than TEAMs, two other fibre optic cables, SEACOM and EASSy are
competing to connect East Africa to the global network of highspeed
internet.<br><br>EASSy concluded financial closure in the last week of
February having raised $248 million that enabled it to make a down
payment to the contractor Alcatel-Lucent. According to the EASSy
secretariat, the first phase of construction kicked off on March 14,
this year and is expected to be ready in the first half of 2010. <br><br>The
EASSy cable will run 10,500 kilometres from South Africa, through
Mozambique, Madagascar, Comoros, Mayotte, Tanzania, Kenya, Somalia,
Djibouti and Sudan. <br>Thirteen land locked countries will also be linked to the system through terrestrial backbone networks. <br><br>This
includes, Bostwana, Burundi, Central Africa Republic, the Democratic
Republic of Congo, Chad, Ethiopia, Lesotho, Malawi, Rwanda Swaziland,
Uganda, Zambia and Zimbabwe.<br><br>Jamii Telecom Limited, a subsidiary
of the AdGroup of Companies' investment in TEAMS project is meant to
complement its Metro Fiber Network whose construction began last year.<br><br>Technology
company AccessKenya has a 1.25 per cent stake in the project and aims
at increasing its bandwidth capacity 10 times. Access Kenya is yet to
disclose the amount of money it plans to pump into the project. <br><br>So
far Jamii has spent more than Sh500 million on the Nairobi Metro Fibre
targeting a market that is currently dominated by Telkom Kenya and
Kenya Data Networks (KDN) and plans to spend additional Sh700 million
in the network. <br><br>By buying into TEAMS, Jamii and Access Kenya
hope to provide terrestrial connectivity that will ultimately hook
consumers to the global network of high speed Internet.<br><br>John
Kamau, the general manager at Jamii said the firm hoped to leverage on
the National Fiber Optic backbone to enhance international connectivity.<br><br>Kenya's
information communication technology (ICT) sector is expected to grow
tremendously once the fibre optic cables are up and running. <br><br>The
cables will stop reliance on the more expensive satellite technologies,
bringing down costs and attracting new players especially in the
Business Process Outsourcing, call centres, segment. <br><br>Mr Kamau
says that the Jamii's Metro Fiber network, is able to support High
Definition Video, Voice and Data is ideal for Telco's, businesses with
branch networks like banks, BPOs, disaster recovery sites, SMEs,
ISP's, Media Houses and residential users among others.<br></span>
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