The signatories of the Eastern Africa Submarine Cable System (Eassy), also called the Eassy Parties, today signed a supply contract with Alcatel Lucent, in Sandton, today.
The signing of the supply contract is the final milestone in the development of the 9 900km undersea cable, which is expected to provide telecoms connectivity from Port Sudan, in Sudan, to Mtuntunzi, in SA, delegates were told.
This follows the approval of the policy and regulatory framework by the 12 government partners, partnering with 17 telecoms companies, to build the undersea cable.
Eassy project coordinator John Sihra would not disclose how much the Alcatel Lucent contract is worth. However, he says costs for the Eassy project is expected to be $240 million.
Financial arrangement
Sihra notes that the finance structure for the undersea cable provides two options for potential investors. Investors may choose to invest directly into the Eassy project, or they may choose to invest in the West Indian Cable Company, which is the special purpose vehicle created to support potential investors.
Sirha says financial institutions, such as the Development Bank of Southern Africa, are also welcome to put equity into the SPV.
The pool of capacity held by direct investors will be similar to that held by SPV investors, and both parties are free to sell excess capacity to telecoms operators who are not Eassy parties, he adds.
Deadlines
Sihra says implementation of the project is expected to last 18 months, with the undersea cable construction completed by the fourth quarter of 2008.
Alcatel Lucent CEO of submarine cables Jean Godeluck says 18 months is not long, and promised that the company would have a project management attitude which seeks to shorten the delivery times.
Benefits
Donald Nyakairu, chairman of the Eassy Finance and Commercial Working Group, notes that the Eassy project will provide high-capacity connectivity within Africa and the world, benefiting all stakeholders.
This is a step towards creating an information society and facilitating the attainment of millennium development goals, he says.
Eassy will take Telkom closer to being an integrated communication provider, says Telkom COO Reuben September. September notes that Eassy is integral to the 2010 plan to take the soccer tournament to the rest of the world, he adds.
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