The race to complete East African undersea cables is officially on the way, with both Seacom and Eassy announcing that construction of their respective cables has commenced.
Yesterday, Seacom announced that its supplier, Tyco Telecommunications, had commenced construction of its 13 700km cable that will connect SA, Mozambique, Madagascar, Tanzania, and Kenya with India and Egypt.
At the end of November, the International Finance Corporation, the private investment arm of the World Bank, announced that it and several other development banks, the European Union and 25 telecommunications operators had finalised their financing arrangements, and construction of the Eassy (East African Submarine Cable System) cable was due to start this month.
The Eassy cable will stretch about 10 000km and will essentially cover the same countries as Seacom. However, it will also include Dijibouti and Sudan. The Seacom cable is expected to cost about $650 million (R7 billion), while Eassy says its cable needs $440 million (R3.08 billion) in funding.
Both cables are to land at Mtunzini, on the KwaZulu-Natal North Coast, with Eassy being able to use the established Telkom station. Second national operator Neotel will build a dedicated station there so it can land its leg of the Seacom cable.
Neck-and-neck
Seacom's cable is to have a capacity of 1.2Tb and the Eassy cable's initial capacity is supposed to be around 640Mb. Seacom has committed itself to an in-service date of the first quarter of 2009, while Eassy is expected to land its cable sometime thereafter. Both cables aim to be fully operational in time for the 2010 Soccer World Cup to be played in SA.
The Seacom cable is funded mainly from private equity companies, including Andile Ngcaba's Convergence Partners and Cyril Ramaphosa's Shanduka Group, Venfin Industrial Promotion Agency and Heracles Telecom. Eassy's major shareholders are telecommunications companies that include Telkom, MTN, and Vodacom. Both cable operations claim to be majority African-owned, with Eassy having a 51% South African ownership.
On Wednesday, Gateway Communications, the largest private data and voice carrier on the continent, announced it had bought an STM-1 level (155Mbps) capacity from Seacom. This follows Seacom's win, with Neotel, of a deal that will see it get the Tertiary Education Network's (Tenet) business from its long-time supplier Telkom. The Tenet deal was secured with a price that was quoted as being 80% below Telkom's current prices.
Redundancy
"Satellite communications is highly expensive and there is very little spare capacity there," says Mike van den Berg, Gateway Communications COO. "While we have bought capacity on Seacom we are also looking at what Eassy will have to offer, because we do need redundancy."
A Seacom spokesperson says the company is actively pursuing other potential clients and expects to make further announcements in due course.
Lindsey MacDonald, an analyst at international research firm Frost & Sullivan, says since there are very few companies in the world that can actually lay undersea cables, one should expect some delays.
"The two big players, Alcatel Lucent (Eassy supplier) and Tyco, are both highly sought after for their expertise," she says.
Share