South Africa: Sentech defends cable involvement


Sentech has defended its involvement in two separate undersea cables, but there are still major questions surrounding its capacity and mandate, which government will have to answer for, says BMI-TechKnowledge.

Following questions raised by the Democratic Alliance, about state-owned entities' involvement in the Africa Coast to Europe (ACE) cable, Sentech responded saying it was following government instructions and beefing up its capacity.

“Sentech received a directive from government to participate in the submarine cable initiative. As the world is moving towards convergence of infrastructure, services and products, the involvement of Sentech in a submarine cable initiative will assist the company in the delivery of international traffic,” says Polly Modiko, head of corporate communications at Sentech.

Sentech has signed a non-exclusive landing party agreement with Baharicom Development Company (BDC). The company says it is not privy to any discussions and negotiations ongoing between BDC and third-parties, including the ACE consortium.

The ACE was initially planned to stretch from France to Gabon; however, the France Telecom-led and Nepad-backed cable extended its reach in June last year. The cable joins the rush of international capacity to hit African shores, adding its 1.92Tb of bandwidth to a growing figure.

However, Denis Smit, MD of BMI-T, says that, while the state-owned enterprise (SOE) was acting on government's instructions, it should be aware its uncoordinated projects could cause confusion. If government needed to increase access to broadband services, Broadband Infraco could have signed up for a bigger shareholding in the East Africa Submarine System (Eassy) cable project.

“The National Broadband Policy, which is expected in March, will spell out the future mandate of Sentech. There are crucial questions surrounding the capacity of Sentech and the document will hopefully address these,” says Smit.

While there has been no indication of where funding for future investments would be sourced, Sentech has hinted it does have funding available. Modiko notes that, in 2006, Sentech received R21 million to participate in the Eassy project.

“Sentech has, to date, not utilised the R21 million allocated to it in any existing submarine cable initiative,” she explains.

Sentech adds that it is legally operating within its mandate. In May 2002, Sentech was awarded two additional licences, allowing it to provide international voice-based telecommunications and multimedia services, as a commercially-operated SOE.

“Having equity in a submarine cable initiative assists in negotiating prices with competitors who are also shareholders. In addition, Sentech's involvement in the submarine cable initiative will ensure it does not always rely on competitors who will determine its price on capacity on a wholesale or retail basis,” says Modiko.

While Smit notes that Sentech's rationale for its involvement in the undersea cable project is a good one, he adds that government still has to answer for its uncoordinated approach to broadband offerings.

He says there is confusion and there needs to be clarity on the roles of Broadband Infraco and Telkom, as the two other major telecommunications entities, which have government as the major shareholder.

“The logic and economics of Sentech's rationale are fine, but the question is: Why do we need two different projects? Why the duplication and why the different state-owned entities?”