Friday, April 20, 2007

FOUR CABLE COMPANIES COMPETING FOR KENYA

Its now official, another company- Herakles Telecom LLC has commissioned Tyco to survey the 13,000km East and South African coast.

Herakles awarded the SEACOM marine survey to Tyco Telecommunications of USA. The survey commences the development of the undersea fiber optic network which will provide high capacity bandwidth connectivity between South Africa, Madagascar, Mozambique, Tanzania, Kenya, India and Europe.

In a press statement posted by Victoria Dillon from Tyco and Brian Herlihy from Herakles, it was confirmed that the cable will connect South Africa, Madagascar, Mozambique, Tanzania, Kenya, India and Europe.

SEACOM becomes the fourth entrant to the scene with questions being raised on whether the costs will come down and the time its likely to take before we get the cable.

In February, the government said the cost of international broadband is set to drastically reduce within 18 months after it confirmed it is ready to adopt three different under sea cables provided through various routes.

Bitange Ndemo, Permanent Secretary at the Ministry of Information and Communication said that Kenya was taking a three pronged approach calculated to reduce the cost of international connectivity.

Priority is given to the East African Marine System (Teams) the fibre optic cable link to Fujairah in the UAE.

“The lead arranger will take over the private/public TEAMS project and will be in charge of financial sourcing. We expect to be done within 18 months,” said Ndemo.

Under the Teams agreement, the Kenya Government will have a 40 per cent holding in the project, Etisalat of UAE will hold 20% and the remaining 40% will go to investors in the East African region. The Government has said it will organise an Initial Public Offer (IPO) on the Kenyan Stock Exchange.

According to John Waweru, Director General at the Communication Commission of Kenya, the Teams project is expected to recover the costs within three years.

Kenya is still pursuing the controversial East African Submarine Cable System (EASSy) an initiative aimed at constructing and operating a submarine fiber optic cable along the East African Coast. EASSy will connect nine coastal countries and island nations and to the rest of the world. The route will be from South Africa to Port Sudan, covering over 9,000 km, connecting Djibouti, Kenya, Madagascar, Mozambique, Somalia, South Africa, Sudan and Tanzania (including Zanzibar).

Thirty-two leading telecommunications operators from East and Southern Africa signed a Memorandum of Understanding (MOU) in December 2003 to carry out the construction and maintenance of EASSy.

But the project was dogged by controversy over whether NEPAD should take the overall leadership or the leadership should be led by the private sector. Terrestrial backbone networks are also being built in separate developments to link all capitals and major cities in Eastern and Southern Africa to the EASSy cable and the international backbone system.

The third international fibre project is fronted by Kenya Data Network (KDN) and which has now signed its contract with Flag Telecom. KDN will link from Mombasa and terminate in an undersea junction in international waters off of the Yemen.

KDN says the link will be fully operational in the first quarter of 2008, just 15 months away. KDN also stresses that its landing station at Mombasa will allow other carriers to co-locate therefore charging only electricity and services at cost.

According to the PS, the three options are meant to make Kenya competitive in provision of international broadband. Ndemo underscored the need for the country to compete internationally and attract international businesses.

He argued that the broadband purchased by international businessmen at a cost of USD 200 costs USD 7,500 in Kenya, therefore ruling the country out as an internet investment destination.

SEACOM now gives industry players a chance to evaluate whether any of the operators will lay the cable, then the debate can start over its efficacy.

Ends

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