PLANNED EAST AFRICA FIBRE COULD SEE TELECOM COSTS DROP 70%

Telecoms

THE costs of international telecommunications operations between East Africa and the rest of the world will go down by an estimated 50 to 70 per cent once a planned fibre-optic cable linking the eastern African seaboard is constructed and put in service by December 2006.

Excitement gripped some 80 top chief executive officers and other business leaders from East Africa meeting at the Second East African Business Summit held at the Mt Kenya Safari Club in Nanyuki last weekend, when it was revealed that construction work on the cable could start as early as 2005.

The initiative for the project came from the inaugural East African Business Summit held in November last year, where it was the chief Action Plan mooted by the brainstorming group that addressed the theme "East Africa’s Future is Digital."

Preliminary feasibility studies show the cost of constructing the undersea cable from South Africa past Zanzibar to the Horn of African country of Djibouti will be between USD200 million and USD250 million, the Head of Strategy and Planning at Telkom Kenya, Joseph Ogutu, told a plenary session of the Summit. It was originally thought that the cost would be higher than USD500 million.

East Africa’s lack of competitiveness principally comes from the lack of a fibre optic maritime link covering the eastern seaboard of Africa. The cost of international data transfer via satellite is USD5,000 per mega bit as opposed to USD500 per mega bit via the maritime link.

Currently, the eastern African coast is the only coast in the world not covered by the international fibre optic cable. The cable covers West Africa, running from Portugal (Europe) along the West African coast past Angola to Cape Town in South Africa, ending up at Mtunzini on the eastern coast of South Africa. From here, the cable heads to Malaysia in the Far East.

Another submarine cable comes down the Red Sea to Djibouti, then continues past the Arabian Sea to connect to Pakistan, India, and finally links up with the South African cable in the Far East.

Nearly all the national telecommunications operators in East and Southern Africa - led by Telkom Kenya, TTCL (Tanzania), Zantel (Zanzibar), Uganda Telkom, TDM of Mozambique, South Africa Telkom and Djibouti Telkom - are involved in the project. Several other mobile and landline operators are expected to join the project, dubbed the Eastern Africa Submarine Cable System (EASCS).

These operators aim at acquiring a capacity for own use and for use by others, and are currently establishing joint actions and reaching an understanding to establish a steering committee and set up working groups.

A consultative committee meeting was held on January 31, where an initial Project Co-ordination Team was formed, leading to the preparation of a preliminary feasibility study.

The operators are hoping to sign a memorandum of understanding (MoU) by November, and to agree on the cable configuration by March 31, next year. Tenders for construction will be floated by September next year, and if successful, a financial closing will be achieved before the end of 2004. Joseph Ogutu said that if a supply contract and construction and maintenance agreement were signed early in March 2005, then the cable could be in operation by the end of 2006.

The East African,Nairobi