Cable winners in the pipeline in West Africa

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The West African Cable System (WACS) will make a decision whether to use either Tyco or Alcatel-Lucent to construct its 14,000km cable in the coming week, says Andrew Mthembu, WACS spokesperson.

The cable, which has been in the planning and negotiating phase for several years, is to stretch from Cape Town and terminate in Europe, most likely London. It was initially envisaged it would be operational in time for the 2010 Fifa Soccer World Cup; this is now considered to be unrealistic.

WACS will have the highest capacity, of 3TBps, of any of the undersea cables that are being planned or constructed. It is considered to be of strategic importance to South Africa, especially in the country's bid to host large projects such as the Square Kilometre Array radio telescope.

The consortium that is building WACS consists of an equal share split between Telkom, Neotel, MTN, Vodacom, and government's Broadband Infraco. The latter was supposed to have built the cable on its own; however, rising costs and a lengthy licensing process meant Broadband Infraco became part of the consortium earlier this year. Mthembu, who is also Broadband Infraco's chairman, says discussions are being held with at least two other international telecommunications companies with the aim of allowing them to join.

“We have decided to keep the consortium small as it eases decision-making and the management of the project. In our experience, having too many partners and trying to accommodate too many parties makes it almost impossible to manage,” he says.

Value-added network service provider Internet Solutions has expressed interest in joining the consortium directly and so has the Department of Communication's champion project, Uhurunet. Mthembu says these other parties can join indirectly by either tying up with one of the participants directly, or by buying capacity from them.

“Uhurunet signed an agreement with Broadband Infraco that allows them to buy capacity from Infraco when they have the money,” he says. Once WACS has made its decision on whether to go with the best and final offer of either Tyco or Alcatel-Lucent, then a construction and maintenance agreement is signed. The timelines will then be set in place, which will lead to a date when the cable will be operational, Mthembu notes.

He adds that the fluctuating rand/dollar exchange rate may have some effect on the budgeting of the project, but this is up to the individual partners to solve. The global financial meltdown has caused the rand to depreciate by up to 20% against the US currency in the last three months. “The structure of this organisation [WACS] is that it is not capitalised directly, but that each individual party makes its own financing arrangements,” he says.

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