South Africa’s eFive pitches $400m Africa-Brazil fibre route in a crowded market

Telecoms

Just when you thought there couldn’t be any more international fibre projects for Africa, along comes another one. eFive Telecommunications has appointed Alcatel-Lucent to build a system that will connect the west coast of Africa to South America.
It is raising the $400 million (R2.9 billion) needed for the project.

eFive Telecommunications was started less than two years ago. Its five major shareholders are young black South Africans, most of whom worked at the Department of Communications at one stage.

Lawrence Mulaudzi is the MD, with the other shareholders being former DOC deputy director-general Keith Shongwe, Ruth Modise, Lindikhaya Mpambani, and Malusi Magasela.

According to an Alcatel-Lucent statement, the system will comprise two trunks. One will connect SA to Angola and Nigeria, while the second will run from the Angolan capital of Luanda to Brazil. The eFive system will connect up with the Nigeria-to-Europe cable, being constructed by Main One Systems, completing the leg the company promised a year ago.

Mulaudzi says the eFive system is targeted for operation by 19 December 2011. While the final capacity of the cable has not been decided yet, it will have speeds of up to 40Gbps, four times that of current and planned systems, he explains.

eFive will run into direct competition with the West African Cable System (WACS), being constructed by Alcatel-Lucent on behalf of a consortium that includes Telkom, Neotel, Vodacom, MTN, and state-owned Broadband Infraco. This system should be operational by the first quarter of next year.

The link from Africa to Brazil was originally mooted as part of Broadband Infraco's ambitions three years ago. However, the idea was to run that link from SA to Brazil. It was put on hold while Broadband Infraco concentrated on trying to raise the capital to participate in WACS, which government then considered a priority.

Mulaudzi believes the Africa-South America link is important in terms of world geopolitics, as SA and some other African nations want closer ties with the Brazil, India, Russia and China block of emerging world economic powers.

“The planned submarine network will also provide cable route diversity to South America, making the most economical and operational sense in the current landscape,” he notes.

He says the idea would be to link up the eFive Telecommunications system with the Seacom cable that runs down the east African coast and eventually develop a ring around the continent.

Mulaudzi says merchant bank Nova Africa Capital Partners will raise the necessary capital. “Our financing model is that of the private model that was used successfully by Seacom,” he adds.