Investors Mount Ambitious Plan for African Satellite
African investors have hatched an ambitious plan to launch a dedicated satellite to beam more bandwidth to the continent. Africans will supply 90 per cent of the funding, with global satellite company Intelsat providing the experience and credibility to get the project done. The main local backer is Convergence Partners, a hi-tech investment fund chaired by Andile Ngcaba, a former Director-General of South Africa’s Department of Communications.
The Oppenheimer family is also investing, while Nedbank Capital and the Industrial Development Corporation have pledged debt financing. Although the new dawn satellite will only switch on in 2011, half its transmission capacity has already been sold to Vodacom, Gateway Communications, Zain Nigeria and Gilat Satcom. Those deals guarantee an income of $350m, and Intelsat vice-president, Ed Berger, believes 90% of its capacity will be sold before it launches.
"The price will be similar to what we have in the market right now," said Berger. Ngcaba said satellites remained important for Africa as its sheer size made it impossible to cover by fibreoptics.
New Dawn will sit 36,000km above Africa and will deliver telephony, broadband Internet access and television channels to most of Africa for at least 15 years. Of the $250m cost, 85% will be met by loans. The other 15% will be equity funded, with Intelsat investing $25m for a 75% stake. The other 25% will be owned by Convergence Partners and Altirah Telecoms, making their investment worth about $8,3m, or R84m.Altirah Telecoms includes the Oppenheimers and David Frankel, a co-founder of Internet Solutions. Frankel admitted it was disappointing that New Dawn would not be active in time to broadcast the 2010 World Cup