KDN’S WULFF EXPRESSES DOUBTS ABOUT EASSY PROJECT

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Many consumers, African Governments and companies are pinning their hopes on the East African Submarine System (EASSy) to lower international bandwidth costs allowing for cheaper broadband services. But is the project doomed for failure?   Speaking at the Institute for International Research Broadband Conference, Dr. Kai Wulff, Managing Director of Kenya Data Networks (KDN), expressed serious doubts over the EASSy project as a whole.

Wulff described EASSy as a project which evolved out of the noble need to drive down broadband costs, but is essentially a group of ministers which ‘decided to invest some money, which they don’t have, into a system which they do not know what it should look like.’

While the development of an open access submarine system is a good idea, the project as whole has evolved to a stage where the effectiveness and cost of access on the cable is not guaranteed.

Wulff further warned that EASSy is falling increasingly under the control of monopolistic operators like Telkom SA, and this shift is threatening the principle upon which the project was founded which is to bring more affordable broadband services and bandwidth to African consumers.

Questions were raised about the rather strange termination point of Djibouti for the EASSy cable, especially since the investors in the cable may then be reliant on the monopolistic Djibouti Telecom for onward bandwidth to the rest of the world.

The KDN MD asked whether the Djibouti termination point would have still been selected if Djibouti Telecom was not part of the EASSy consortium. Wulff said that unless investors in EASSy can be offered certain guarantees, like the price of bandwidth on the cable, the price of onward bandwidth from Djibouti and access to the termination points of the cable, it does not make sense to blindly invest in such a system.

He pointed out that unless investors have open access to the EASSy termination points, they may have to pay exorbitant fees for onwards bandwidth from Djibouti which will eliminate the advantages of the cable, even if prices on the system itself are very low.

Wulff said that before KDN, one of the few potential investors who have their money ready, signs the EASSy agreement, they will need to receive clarity regarding onward bandwidth capacity, pricing of bandwidth on the actual system and access to the cable landing stations.

Another issue which was challenged is the concept of ‘Open Access’. While the philosophy behind an open access network is commendable, Wulff questioned how the pricing levels will be set and who will be responsible for these levels.

With EASSy being touted as a direct competitor to the current SAT3/SAFE system, a system which Telkom currently profits from, it raises questions concerning Telkom’s dedication to see the new cable become a success story.

Currently SAT3/SAFE is serving a large portion of the international bandwidth needs of South Africa, and with exclusivity rights on SAT3, Telkom stands to lose millions in profit if EASSy provides competition on international bandwidth to Southern African countries.

A basic South African – Djibouti link may however serve Telkom’s African ISP aspirations, which is significant if one considers their recent R 142.6 Million purchase of Africa Online.

This cable can supply Telkom with better control of the East African ISP market, and may explain why consortium members like Telkom may not be too concerned about onwards international bandwidth from Djibouti.

When asked whether a 2008 launch date for EASSy is feasible, Wulff made it clear that it will never happen. He said that a minimum of 18 months is needed to roll out the system after the ‘money is ready’, something that may take a very long time in itself to materialize.

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