Seacom geared to go

South African telecommunication carriers will have "equal and open" access to the $600 million-plus Seacom submarine cable from June 2009.

Speaking this morning at the group's first press conference, Seacom president Brian Herlihy said if this date were not met, then implementation partner Tyco Telecommunications would be subject to punitive damages written into the original contract.

"We're a little late in coming forward to the market. But this is because we did not want to say 'this is who we hope to be'. Today we can say 'this is who we are'. We began the construction phase of the cable in November last year and we are confident that we will be ready for commercial services in June of next year," he explained.

Herlihy stressed that Seacom services would be equally available to all carriers, despite a landing agreement with Neotel.

"Our agreement with Neotel has been drawn up in such a way that all carriers will have the same access. Neotel will own and operate the SA assets, but the open access co-location building will only bill carriers for the operating costs of the building. We have gone to great pains to ensure that natural rivalries are dealt with," he explained.

The focus on open and equal access to all operators also led the company to publish its prices.

"If our prices are out there, then there are natural checks and balances for the operators. Users can go shopping among the wholesalers to ensure they are getting a price which is fair," he said.

Herlihy admitted that negotiating available investor opportunities with the countries along the cable was sometimes "sensitive". However, he is pleased with the companies that are on board.

Seacom now has a shareholding split between Africa (76.25%) and the US (23.75%). Herakles Telecom, an international development group based in New York, holds the international shareholding.

The African shareholding is split between Industrial Promotion Services (26.25%), Venfin (25%), Convergence Partners (12.5%) and Shanduka (12.5%).

Industrial Promotion Services is a subsidiary of the Aga Khan Fund for Economic Development (Akfed), an international development agency. Akfed operates as a network of affiliates, with more than 90 separate project companies with annual revenue in excess of $1.5 billion. The fund is active in 16 countries in the developing world: Afghanistan, Bangladesh, Burkina Faso, the Democratic Republic of the Congo, India, Ivory Coast, Kenya, Kyrgyz Republic, Mali, Mozambique, Pakistan, Senegal, Syria, Tajikistan, Tanzania and Uganda.

Previously-listed Venfin is an active private equity and venture capital investor. The company has assets in excess of $1.1 billion spanning the telecommunications, software, energy and media sectors. It also has selected fund and direct investments in China.

Led by ICT personality Andile Ngcaba, Convergence Partners is a black empowerment investment company focusing on the telecommunications, media and technology sector.

Shanduka Group - founded and chaired by MTN chairman Cyril Ramaphosa - is another African investment company, focused on resources, financial services, property, energy, industrial and general business.

Herlihy said all investors paid "hard cash" for their stakes, with no vendor financing provided. However, the shareholders have asked that the extent of the investments not be disclosed. Nedbank Capital and Investec Bank provided project debt.

The company expects to receive a return on investment within the next three to five years.