NEPAD FAVOURS OPEN ACCESS FOR EASSY PROJECT

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The NEPAD e-Africa Commission, a body mandated with the development of a continental ICT infrastructure network, is taking a tough stance over ownership of the proposed Eastern Africa undersea cable system (EASSy).

The Commission appears to be set on a clear collision course with the consortium formed to promote the project, which prefers the 'Club' or members-only ownership, against the Open Access, favored by the World Bank.

For months now, the US$240m project has been marred by controversy over its ownership and financing, with consortium members openly bickering against each other.

NEPAD officials are critical of the 'Club' model, arguing that it is discriminatory and in its form, the model has no incentive to bring down the high telecom prices, seen as an obstacle to growth.

Dr. Edmund Katiti, the policy advisor to the e-Africa Commission, told the Africa ICT investment summit in Kigali last week that NEPAD favours the Open Access model because it encourages collaboration and regional integration.

He said previous projects created under similar arrangements had failed to yield the desired impact, resulting instead in stagnant high telecommunications costs and promoting monopolies.

He said such monopolies would drive small telecom operators out of business in their own countries.

Africa has the highest telecom prices despite a submarine cable system running from Cape Town to West Africa.

"They have led to the cost of international communications being too expensive for the ordinary citizen and they don't provide level playing field for newly licensed telecom companies," Katiti argued.

EASSy has generated heated arguments over its ownership and financing, with the promoters seeking to finance the project and reap big profits from non-member telecom operators, who also happen to be their competitors.

Last week, Kenya, the brain behind the project, threatened to go ahead in the wake of the ownership controversy and finance the project alone, citing delays since the project was mooted three years ago.

"The cost of the meetings alone is half the cost of the project," Dr. Ndemo Bitange, Kenya's information and communication permanent secretary, was quoted as saying.

Asked if NEPAD would run a parallel undersea cable, Dr. Katiti simply said the project would continue as planned. "They should run a parallel cable if they want but ours will continue."

Under NEPAD's open access arrangement, the venture will be owned by shareholders who comprise of licenced international gateway operators, non-operator entities nominated by African states and interested international operators outside the region.

To ensure affordable equity subscription to the project, shareholders will contribute at least $1m and the rest of the share capital will be acquired through debt financing. Construction works on the project is expected to be complete by the end of this year as all relevant studies, policy formulation and supply contracts have been concluded.

East African Business Week