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East African Submarine Cable System Receives a Boost
Posted by: Guest Author on November 30, 2007 Under: Africa, Business & Technology, Discussion Lounge
Muti ThisThe African Development Bank (AfDB), along with other participating development financial institutions (DFIs) has signed loan agreements for the installation of the East African Submarine Cable System (EASSy).
A statement issued by the bank on Tuesday said that EASSy was a landmark fibre-optic cable project that will connect 22 coastal and land-locked African countries to each other and the rest of the world with high-quality Internet and international communications services.
EASSy is an initiative sponsored by 25 telecommunications operators, most of which are African. The project will construct and operate a submarine fibre-optic cable along the east coast of Africa that will run for 10,000 kilometers from the continent’s southern tip to the African horn, connecting South Africa, Mozambique, Madagascar, Tanzania, Kenya, Somalia, Djibouti, and Sudan .
Another 13 adjoining countries will also be linked to the system as terrestrial backbone networks that will include Botswana, Burundi, the Central African Republic, the Democratic Republic of Congo, Chad, Ethiopia, Lesotho, Malawi, Rwanda, Swaziland, Uganda, Zambia, and Zimbabwe.
The EASSy project will also provide the last link to complete the telecommunications loop around the African continent.
The AfDB’s financing will be channeled through the EASSy Special Purpose Vehicle (SPV) that is also known as the West Indian Ocean Cable Company, or WIOCC, and consists of a $14.5 million senior loan.
EASSy is expected to transform the telecommunications landscape in the region as it will improve access for 250 million Africans and substantially reduce the costs for consumers and businesses.
Construction will begin in December 2007 and the EASSy cable is expected to be fully operational in time for the 2010 FIFA Football World Cup to be hosted by South Africa.
The AfDB, the French development Agency (AFD), the European Investment Bank (EIB), Germany’s Development Bank (KfW) and the International Finance Corporation (IFC) of the World Bank group will provide the project’s entire long-term loan financing of $70.7 million, with $14.5 million to come from the AfDB. The total project cost is $235 million and the balance will be provided by the 25 private telecommunications operators who will operate the cable as a consortium.
These Telecom operators, including 21 African operators, will be the main users of capacity on the cable.
Contrary to previous cables in the African continent that were built on the ‘closed-club’ structure, EASSy is built on a Hybrid SPV Development model. This model will allow smaller operators to participate in the cable consortium at reduced individual entry investments.
EASSy also adheres to the main development objectives of “Open Access”, Non-discriminatory and affordable pricing.
The cable will act as a crucial medium of internet connectivity to carry telecoms traffic for all African operators from the Eastern and Southern African markets to onward connecting Cable networks in Europe, Asia and the Americas.
After years of collaboration between the African Development Bank, World Bank Group and other global and regional development institutions, governments, and the region’s private sector, the project brings together public and private sectors to expand Telecommunications Infrastructure. EASSy provides a model for future generations of Public-Private Partnerships (PPP) that will be necessary to create a enabling environment for private sector participation in Africa .
The EASSy project will also foster regional integration in line with NEPAD and the AfDB’s strategic objectives.
The EASSy project will also contribute to the socio-economic development of the region by expanding inter-African trade and provide employment opportunities and income to millions of unemployed Africans and contribute to sustainable development.
David Muwanga - HANA Correspondent in Kampala - Uganda
Frederic | Dec 4, 2007 | Reply
Can someone break down what it means for the tech sector in the region ?
How does it impact the way we do business, our access to and distribution of digital content in the region ?
How will the media, the music industry, the publishing industry, information industry, the movie industry take adavntage of this ?
Do we have somple precursors already ?
Is that what companies like Google, Intel, Amd and microsotf are waiting for to unleash their money, tools and brand on the continent ?
We hear alot about BPO, stock exchanges and bonds, will larger bandwidth and faster internet translate in more companies in these sectors ?
We are yet to see a good number of continent based social networks and web 2.0 applications [outside south africa] is that a coming wave ?
I have more questions to try to understand the benefits and opportunities that this project bring
Ella Romanos | Dec 5, 2007 | Reply
I would be interested to know who is going to maintain this system in the long-term? Once the loans for its development have run out?
CareTaker | Dec 5, 2007 | Reply
The questions are valid. There is need for more information on the EASSy cable. One benefit, I think, will be reduction in telecoms fees for the countries connected, since it appears there wouldn’t be any need to reroute data over borrowed channels as it’s been done at the momment. Of course, there will be better connectivity, and perhaps the possibility of broadband connections in those countries as well.
It is my guess as well that the overseeing agency for EASSy will have the responsibility of maintaining the infrastructure.
Ella Romanos | Dec 6, 2007 | Reply
It makes sense that the fees would be reduced, which clearly is one the most important issues with connectivity in Africa. However, something that is confusing me is how in East Africa, the statements say that this cable is the best way to reduce costs, but in West Africa they are saying it is by satellite that is cheaper (from the West African Satellite conference and Nigeria’s first satellite launched in May this year).
My concern is lies with the fact that there seems to be this confusion as to which is going to be cheaper? And I can’t help but wonder why there is this confusion. Is it lack of reliable data (as is often accepted, lack of data is a big issue in Africa), or is it the lack of communication, is it that both ways can be equally successful (the author is sceptical on this), or is it simply something that has not been thought through enough?
In reference to the maintainance, the issue of maintaining the infrastructure comes into play here, as I’m guessing the costs for this will be quite different for satellite and cable maintainance.
It should also be noted that it is generally accepted within the field of infrastructure, that unless a government is spending 4-5% GDP on developing or maintaining its ‘absorbative capacity’ (the capability to use, maintain and develop an infrastructure), they will not maintain, use or develop it further and it will therefore fail. (I have just written a post about this on my blog as part of a series of posts called ‘An Enabling Environment’, the latest post is titled ‘Internal Infrastructure Development‘.)