With fibre connections to North and South America and Asia, Angola Cables is pitching itself as a global player

2 March 2018

Top Story

Data demand in Africa continues to grow strongly through a combination of reduced wholesale and retail prices and new digital services. This demand is driving a third generation of cables to connect the continent. Russell Southwood spoke to Antonio Nunes, CEO, Angola Cables about one of the newest entrants, the SACS cable.

Africa’s first generation international fibre cable was SAT3. It opened the door for the second generation with Main One, Glo One, WACS, ACE, Seacom, Eassy LION and all the rest. The third generation cables are the multiple projects wanting to build on the east coast of the continent and new routes from West Africa like SACS and CBCS from Cameroon.

The SACS cable has just landed in Fortaleza in Brazil from Luanda where it connects to the MONET Cable that goes from Praia and Fortaleza in Brazil to Boca Raton in Florida. The consortium behind Monet includes Angola Cables, Algar Telecom (Brazil), Antel (Uruguay), TESubCom (a part of the US company TE Connectivity) and Google. The latter is now one the major global international bandwidth customers and a great deal of international cable capacity new growth is now coming from Google, Facebook and Microsoft.

The idea for the SACS Cable came out of an agreement signed between the Angolan and Brazilian Governments in 2009 to create a digital bridge between the two lusophone countries. This led to practical discussions in 2013 out of which came SACS.

Having just landed at Fortaleza, it is now entering the final phase of completion and is expected to be fully operational by the third quarter of 2018 (around July this year). The undersea cable claims to be “one of the most advanced submarine telecommunications systems and will have initial capacity of 40Tbps (100Gbps x 100 wavelength x 4 pairs of fibre)”.

Although Brazil and Angola have close ties, this alone would not be enough to create a business case. So how’s it going to work?:”The business case definition of the cable was the need to reach the USA direct. When we looked at it, the costs of going from Brazil to the USA were so high that we added the Brazil-USA cable (MONET) to achieve this.”

“We’re looking to African countries (wanting to get to the USA and Latin America) and Nigeria and South Africa are very interesting markets.” Both of these countries are on the WACS cable in which Angola Cables is a consortium member. It has already been pre-selling capacity on SACS and MONET entered service in December last year.

“We’re trying to be competitive with the North Atlantic routes although the difference in price is currently 15-20%.” He points out that for African customers the route is probably shorter and has lower latency. It also allows some diversity for European customers wanting to connect to Latin America as there are as yet no direct routes. Another element of the business case is providing a route to Asia for Latin American customers “avoiding the USA, Europe and Egypt which will have positive cost implications.”

Angola Cables operates two tier III data centres, one in Fortaleza that is connected to MONET and will link shortly to SACS and one in Luanda that is linked to WACS and again shortly to link to SACS. But it also has the capability to offer a direct connection to the cable in Luanda for international customers.

Nunes sees Luanda developing as a hub for regional communications built on this new international business and selling to its neighbors in DRC, Congo Brazzaville, Namibia and South Africa:”If we’re doing our job well, we will develop as a hub and our pricing is sufficiently competitive to attract regional customers.”

We talk about the bad old days when Angola was one of the most expensive international fibre markets: an STM1 from Lisbon-Luanda used to cost US$350,000 but is now down to less than US$20,000. It’s not as cheap as the sub-US$50 per mbps found on the east coast of the continent and some of the more competitive countries on the West Coast but it’s now much more in line with market prices on the West coast.

The broader context is also Angola’s own demand for data. The economy has probably been at its lowest point across the last decade and there have been difficulties getting dollars out of the country for international companies who might want to operate there. Nevertheless demand for international capacity has doubled over the last year driven in part by mobile data subscribers.

Will this growth continue?:”Demand will still grow but it probably won’t double. But if the economy starts to grow again, it will increase and we’ll start to see companies coming back. The industry is changing and we’re starting to see people using the Cloud and services on the Cloud. Also people are increasingly using IP voice services and don’t use roaming any more.”

Angola Cables also operates what it claims is the third largest internet exchange point on the continent, Angonix. It’s been a slow process developing it because of “paperwork” and the shortage of foreign currency. But Nunes says there are already Google and Netflix local caches and he wants to attract other OTT providers:”We also want to sign up local content producers and to develop an ecosystem able to increase local traffic.”

But Angola Cables’ ambition is more than just local as its cable operations demonstrate:”The challenge in the world market is to establish the credibility of an African company to be a global enterprise and to prove what we are delivering is what the market needs.”

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