Nigeria’s Mainstreet Technologies to build new international west coast fibre
Mainstreet Technologies threw its hat in the ring this week to be the first to complete an African west coast fibre project to compete with SAT3. The cable will connect 12 countries, some already connected to SAT3, others not. Russell Southwood spoke to the project’s CEO Funke Opeke and discovered how it intends to win the race to complete.
Nigerian Funke Opeke spent 20 years in the USA working in technology companies(including Verizon’s international and wholesale divisions) before coming back to work for a spell as CEO of the incumbent Nitel. It was out of this that she recognised that “after two years in Nigeria how painful the infrastructure limitations were.” So in May 2007 she set out to build a new competitor cable to SAT3:”I want to do something for the region and this cable makes good sense both in commercial and development terms.”
Dubbed MaIN OnE, the cable will connect the following 12 countries: Morocco, Mauritania, Senegal, Guinea, Cote d’Ivoire, Ghana, Nigeria (Lagos and Port Harcourt), Gabon, the DRC and Angola. There is an option to extend the cable to South Africa if the Government there changes its attitude to external operators:”We’ve been a little disappointed with the South African Government’s attitude.”
The project is currently budgeted at US$300 million and Opeke is out “pounding the pavements” looking for sources of finance. But she is optimistic:”The good news is that there is a lot of interest. There is a new capacity in Africa in general and Nigeria in particular to fund projects of this magnitude. There’s currently more interest than needed for our requirements.” The project will be African-led.
The business model is that Mainstreet Technologies will pay for the landing stations and the cable and shareholding will be open to all comers. Early equity investors will have some price advantage but it will not be significant over the life of the cable.
The cable will have a capacity of 2.56 terrabits and Opeke anticipates that prices will be 10% of current prices and it will still be profitable. Prices will drop further as capacity is sold through. According to Opeke:”We’re already talking to some of the larger operators.” The company to run the project will be set up in a couple of months time and it says it will have the cable in place by 2009.
But what of the Glo-1 cable that seems to be leading the race for completion:”The Glo-1 project is the most substantial but it has its limitations. Globacom had an advantage when the market was not fully liberalised. I would question whether its “go-it-alone” strategy will work. We want to make sure to adopt an open, wide-based approach.”