Main One will land in five places in Africa and makes alliance with Tata for European connections

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Nigerian-owned Mainstreet Technologies said this week that it is on schedule to be operational by June 2010 and that the building of landing stations has started in Ghana, Nigeria and Portugal. Also there will be three other landing station points in Africa with landing station partners to be announced in 2010. Russell Southwood spoke this week to Main One’s Commercial Director Bernard Logan.

In a classic fog of unreliable information, the much-delayed Globacom-owned Glo One cable announced in early September that it had landed in Lagos. However, what this means is less than clear as one report spoke of the ship leaving Lagos for Accra. The Glo One cable will definitely land in Accra and Lagos but the press announcement spoke of it having 14 branching units to serve other West African countries and a potential phase 2 to South Africa. But it has to be said that there is precious little sign of Glo One appearing in some of those 14 countries.

The telcoms industry in Nigeria has rather given up on Glo One as we are told it is not yet able to provide prices to its potential customers although judging by its retail behaviour in the mobile market, it will seek to offer the cheapest bandwidth in the market.

Meanwhile Main One seems to be making steady progress to becoming the second competitive cable in West Africa by June 2010. According to its Commercial Director Bernard Logan, it is “80% through production” of the fibre, has “started its first lay in Ghana” and is building three landing stations in Ghana, Nigeria and Portugal.

It will land in Tenerife, Morocco, Senegal and Cote d’Ivoire by making agreements with landing parties: these will be announced in 2010. It will be interesting to see which landing parties are announced for somewhere like Senegal: there are only two options – Sonatel and Expresso – and the former is already a partner in the France Telecom competitor cable ACE.

Although the market for international fibre is going to be very competitive with four new cables (Glo One, Main One, WACS and ACE), Main One is already contemplating upgrading its starting capacity from 30 gbps in June 2010. It has an overall potential capacity of 2 tbps. It has attracted “tier one customers” who are already invested in other cables:”We have customers who’ve already bought who will also buy on other cables. They don’t want to put all their resources into one system. They’ve already seen the net effect of dealing with SAT3”.

So what will the price be? This answer to this question rather depends on how many cables there are in the market but it is safe to assume that there will be four by 2011. According to Logan, capacity will initially be “20% of today’s rates” based on today’s rates being around US$5 million for an STM1.

“By 2011, prices will have come down again because there will clearly be more competition. However, WACS and ACE are consortium cables (primarily designed to serve their members) and the Glo One cable is self-feeding for Globacom. In both cases, their idea of price will be very different from ours as an independent cable.” But by 2011 he expects further price falls:”There will be further falls of 50% a year and I fully expect that. Fibre markets around the world work on that basis.”

In terms of getting the bandwidth in and out of the continent, Main One has an alliance with Tata for European connections onward from their Portugal landing station and other strategic relationships for further afield. But unlike Seacom which has partners to deliver to POPs inland at the same price as at the landing station, Main One will rely on its customers to get the capacity to the inland countries. However, it is constructing an inland route between Accra and Lagos with a partner to create a redundant ring and one side-effect will be the delivery of its bandwidth to Togo and Benin.

“Our plan was always much simpler than Seacom’s. We wanted to reach the landing stations and we’re always expecting to maintain ourselves as a wholesaler. It will be better for the landlocked countries to build routes to get to the landing stations.”

Bernard Logan has been involved in 12 fibre cables in the last 20 years. His previous job was for TWA , a cable linking Pakistan to the UAE.

Correction: In issue 472, we said that Africonnect had 900 customers and it should have been 2,000. Also it charges US$50-150 for a 512 kbps connection on a 12:1 contention ratio.