Mergers, Acquisitions and Financial Results

In response to your article in issue 306, it is worth clarifying the operators’ viewpoint. We believe:

a) The EASSy members have spent three years and over US$ 3 million developing a project that is very much an operator initiative.

b) Barring interferences, the construction of the cable should start by the third quarter of this year (2006) and EASSy should be ready for Commercial Service by the end of 2007. Tender evaluations are at their final stages. The Shareholders’ Agreement (C&MA) is ready for signature and financial closure should be concluded in the next few weeks

c) The NEPAD approach, if successful will cause delays, and the Kenyan Government recent press comments is in my view a correct interpretation of the risks it represents and the likely outcome will be competing cables that do not present the same economies of scale and global connectivity that EASSy could deliver. This is because the way forward proposed by NEPAD is very much a diversion that may (indeed based on experience of other regional initiatives will) put EASSy in the same category of delayed and/or failed projects such as COMTEL, RASCOM and Africa One. Given that business ideas are essentially innovations, the success of the NEPAD approach (because it amounts to an appropriation of a business idea), could not bode well for innovations (of a commercial nature) in the region. Certainly it will put paid to cross-boarder, cross-entity initiatives which could represent a key element of in the development of ICT infrastructure in Africa and the replacement of this by an added layer of inter-governmental regulation in conflict with national regulatory regimes as the idea is to bring together the conflicting roles of Policy Making, Regulation and Operation in a single Inter-governmental Authority.

d) NEPAD’s mandate is presumably for the whole of Africa. It is therefore rather bothersome that whereas Submarine fibre cables are coming up on the West African Coast and indeed in the North under either private and/or consortium models without interference from NEPAD, EASSy on the East is being shackled by calls for policy changes which as everybody knows take long, sometimes very long to happen. The consequence will be an increase in the infrastructure gap that exists between the East and the West, as the policy framework in West and North Africa shall continue to attract business ideas and Investments, whereas Eastern African will continue passing around the begging, dependency bowel. EASSy is being developed under existing policy frameworks that contrary to statements by detractors, are adequate to deliver developmental impact. In regard to Open Access for example, the limitation in only national laws- any operator duly licensed by a national authority has the right to participate in EASSy, to do otherwise would be to put EASSy in conflict with national laws and regulatory authorities.

John Paul Bagiire
General Manager Strategic Planning
MTN Uganda Limited