FLAG TELECOM ANNOUNCES IT WILL BUILD KENYA-SOUTH AFRICA FIBRE ROUTE

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India’s Reliance Communications is planning to spend US$1.5 billion on four more new undersea cables, rolling out the FLAG Telecom network to an additional 23 countries and upgrading its entire system to next-generation IP infrastructure. An African route will connect Kenya, Mozambique, South Africa, Tanzania, Madagascar and Mauritius.

Flag Telecom has already four shortlisted contractors for building the cable and will issue contracts shortly. Although it is cagy about timings, it says that all four phases of its plans (including Africa) will be completed within three years.

The model used to raise capital for its Falcon cable gives some indication of the pattern that may occur in Africa. Investors have a choice of either buying discounted advance capacity or financing the landing station for advanced capacity or some combination of both approaches. KDN’s contract with Flag may include both discounted capacity and the landing station. However, Flag will own and operate the cable as a private provider.

Flag is committed to a “low price, high volume” strategy. When making the announcement, its Chairman said:”We live in a world where there is too much bandwidth for some and none for many – there is unequal access to bandwidth in and across continents, countries and communities. The Flag NGN will democratise digital access and give nearly everyone in the world the opportunity to be part of a massive lifestyle change….What’s more, it will make this bandwidth available…at strikingly affordable prices.” However, a company spokesperson was markedly reluctant to talk specific numbers, only saying”It will be whatever is suitable on a case by case basis.”

The project has no relationship to EASSy that seems to be stuck with a wholly unsuitable political protocol agreed by a minority of countries (some of whom are also less than happy). And the private sector players are also unwilling to agree to it (See Internet News below). If it does not get the protocol redrafted and right quickly, there is every chance that the wealthier Consortium members will start defecting soon and the project will be dead in the water.