SAT3 to get a competitor – Infinity set to finalise $865 million financing

Top Story

In the coming week the Infinity Worldwide Telecom Group of Companies (IWTGC) looks set to finalise the funding of its first phase build for its international fibre route from Portugal to South Africa along the west coast of the continent. Once built, it will be the first independently operated competitor for the incumbent monopoly-controlled SAT3 cable. Russell Southwood looks at what’s involved.

A West African bank, a leading institutional investment advisor and European institutional investment advisors are all in the final stages of agreeing an investment package that will come up with the funding for the first stage of the Infinity project. Once agreed, work will start 45-60 days after funding package has been inked.

Phase one of the project is estimated to cost US $865 million, of which US$750 million is earmarked for capital Expenditure and the remainder for working capital. This includes funding for sub-sea cable; marine; wet and dry plant; cable stations; licenses; backhaul; and central city PoPs. Tyco International has been chosen as the System Supplier and Infinity and Tyco are ready to execute an ITP that will commit to the marine survey, manufacturing slot, and overall system schedule. Desk Top and Marine Surveys are set to commence in Q2 2008 and the RFS date (commercial operation) for Phase one is planned for Q4 2010.

In phase one of the project Infinity will construct a 14,000 kilometre international fiber route along the western coast of continent with direct links into Southern Europe and South Africa. The network will run from Lisbon, Portugal to Cape Town, South Africa with branching units to land in the Sub Saharan coastal countries of Senegal, Ghana, Nigeria, Cameroon and Angola.

Phase 2 will see Infinity land the cable in additional planned countries in the region including: Canary Islands, Mauritania, Gambia, Guinea-Bissau, Guinea, Sierra Leone, Liberia, Côte d'Ivoire, Togo, Benin, Equatorial Guinea, Sao Tome, Gabon, Congo, DRC, and Namibia. Inland routes will also be explored to link in Niger, Mali, and Burkina Faso.

Significantly Infinity already has an MOU with VSNL (owners of Neotel) for engineering and design support; use of its global infrastructure; network services; and operational support. VSNL’s International Global Network spans across 4 continents and comprises major ownership of 206,356km of terrestrial network fibre and sub-sea cable.

Infinity has three other projects racing it to completion (in likely order of arrival): Globacom’s Glo cable which has already reached Dakar, the Infraco/NEPAD Uhurunet project and Mainstreet Technologies’ One project. All cover broadly similar ground.

South Africa’s National Treasury declined funding for Infraco’s west coast fibre project (variously described as landing in Fortaleza and Portugal) on concerns about the lack of private sector involvement and as a result, it is in the process of combining forces with NEPAD’s Uhurunet project which will be partly financed by India’s Biharti. Infraco will hold a stakeholders’ meeting on 15 April.

Globacom has been extremely secretive about what it is planning to do with its cable and despite having announced that it will land in a long list of West African countries, there is little sign on the ground in several of these countries that licence applications have been made.