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Kenya: Fibre-Optic Project Begins

The East African Standard (Nairobi) wrote on January 31st that the Government may use subsidies to lower bandwith costs for outsourcing centres in the country, a minister has said. This would help call centre businesses stay competitive until construction of fibre-optic links forced costs down. Information and Communications minister, Mr Mutahi Kagwe, said this on Wednesday at the signing of a $2.7 million (Sh191 million) contract with Tyco Telecommunications to fund a survey on the construction of a fibre-optic link to Fujairah in the United Arab Emirates (UAE).

The US-based firm is to undertake a four-month mapping of the Indian Ocean to determine where a fibre-optic cable could be laid. The cable will be known as The East African Marine Systems (Teams). The Kenyan government through Telkom Kenya and the UAE government, through Etisalat, have entered into a memorandum of understanding for the construction of Teams.

Kagwe argued that the current cost of bandwith is too high and is driving outsourcing companies in the country out of business. It currently costs Kenyan call centres over 30 times more to transmit data than it costs Indian rivals. The high bandwith costs in Kenya are attributed to the fact that the country relies on satellite linkage, which has a lower capacity, as opposed to fiber optic cables (physical connection), which have a higher capacity. The sub-marine survey is scheduled to start in February and will last for about two months after which tendering process for the undersea cable will commence.

The information minister called on investors to start positioning themselves to take advantage of the telecommunications boom to follow. Permanent Secretary, Dr Bitange Ndemo, explained that a separate company (a "special purpose vehicle") would be created to manage the cable. The government is expected to own 40 per cent of the project. Kenya is also involved in the construction of the African East African Submarine Cable System (Eassy) project.

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