Race to build a West Coast fibre promises to push international bandwidth prices to new lows - Balancing Act July 22, 2008 | posted by Nigerian Muse (Archives)

 

http://www.balancingact-africa.com/

Race to build a West Coast fibre promises to push international bandwidth prices to new lows

Four international fibre projects are racing to complete ahead of each other on the west coast of Africa to give some much needed additional capacity and price competition to SAT3. The drop in bandwidth prices could be spectacular. Russell Southwood looks at the runners in the race and asks whether West Africa is ready for the potentially market-changing impact of cheap international bandwidth.

At last week's US Trade and Development Agency organised event (West Africa ICT Road Map to Opportunities Conference), Funke Opeke of Mainstreet Technologies, the project to build the Main One cable down the west side of the continent promised that an E1 would cost US$400. It might have been my imagination but I'm sure I heard something like an audible intake of breath.

There are four international cable projects racing to complete new routes that will connect that side of the continent to Europe and the USA. They are:

- Globacom's Glo One: The Glo One cable has been built from the UK to Dakar but has not yet been landed in Dakar. Despite an announcement that it would connect most West African countries between Dakar and Lagos, it has not yet been completed. Various cynics say that it has run out of money but this is a company that has just rolled out in Benin and plans to do the same again in Ghana. More credible rumours reaching us are that the countries where it was to have landed are asking too higher licence price, hence the delay.

- Mainstreet's Main One: Previously aired versions of this show a routing that pretty much matches SAT3. You would expect this company to focus its efforts on the growing Nigerian market. If Nitel is anything like sorted by then, a great deal of expansion may come from that direction. Last week CEO Opeke was sounding very bullish about the prospects of completing.

- IWTGC's Infinity cable: Again routing along the same course as the SAT3 cable, IWTGC looks close to signing its financing deal with European investors and a West African financial institution. The latter will put up US$300 million and the former will offer together with that amount a package that will be able to go up to US$1.5 billion. Last week it signed a protocol with Gran Canaria to put "back office" functions there.

Infraco/DTI's Africa West Coast Cable: This South African Government project  signed a contract with the company that is going to build it two weeks ago but has not yet completely finalised its financing. Its final list of shareholders will reportedly include both telecoms companies, such as Telkom, Neotel, Equator Telecom Nigeria, and British Telecom, as well as Tenet, Tata Communications, Multichoice, Vox Telecom, Internet Solutions and Gateway Communications. It was touted as being ready for the World Cup in 2010 but looks unlikely to make that deadline.

At least two of these cables look set to be built and a third is more than likely. This will push prices for international bandwidth down to the levels likely to be achieved on the East coast: somewhere between US$500-1,000.

But it is clear that unlike on the East coast and in South Africa, there is not the same focused attention on getting the cables done at the political level. The situation is made more complicated by the cultural differences at many levels between Anglophones, Francophones and Lusophones. No-one seems to be prepared to crack heads at a political level to get regulators to line up (metaphorically speaking) on the beaches of their respective countries as welcoming committees. Without this kind of political determination, the cables will take much longer to be built. Forget the high licence fees and lie back and think about what cheap bandwidth will do for the economy.

Also at present only 4 countries (Benin, Burkina Faso, Mali and Senegal) have connections to 2 or more or their neighbours and only 4 (Cape Verde, Cote d'Ivoire, Nigeria and Togo) have a connection to one neighbour. And unlike South Africa, Nigeria as powerhouse economy of the sub-region is not connected to all of its neighbours.

Inevitably cheaper international bandwidth will begin to push down the price of national bandwidth. If it is cheaper to go from the capital city of a country to Europe than from the capital city to another city in the same country, something is badly out of shape. And when the new cables arrive, then that will be as true for West Africa as it will be for East Africa.

At the same event in Accra last week, somebody asked who were the most expensive countries on the SAT3 route at present in terms of international bandwidth . The answer? Gabon (Gabon Telecom), Cameroon (Camtel) and Angola (Angola Telecom).

 

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PUNCH

 

Glo’s 9,500km submarine cable project ready next year – Jameel

By Jonah Iboma

 

Published: Wednesday, 23 Jul 2008

The 9,500-kilometre submarine telecommunications cable being laid by Globacom to connect Africa with Europe and the United States is nearing completion.

A statement on Tuesday by the company said the Group Chief Operating Officer of Globacom, Mr. Mohammed Jameel, made this disclosure in Accra, Ghana at a press conference where the GSM licence won by the company was formally presented by the country’s National Communications Authority.

The submarine cable project, which is costing about $250m, will run from London to 14 West African countries, with a dedicated link to the United States. It is expected to reach Ghana by May 2009, and shortly after, Nigeria .

The completion of the project, according to Jameel, will revolutionise telecoms services on the continent, and make them truly affordable to individuals and corporate bodies.

It will also enable more services and products to be introduced by Globacom.

Jameel promised that Glo would not disappoint the people of Ghana as it would replicate its success story in Nigeria and Benin Republic by giving the people value for money.

He said Glo would start operations in Ghana by the end of the year, and hoped to hit a subscriber base of two million in two years.

According to him, in Ghana, Glo has already gone to work to make this dream a reality. This, he said, would enable many Ghanaian businesses and individuals derive maximum satisfaction from Glo’s services.

He added that Glo had applied to the NCA for a 3G licence, which he was optimistic it would get soon to improve its services together with the cable connection to make bandwidth available for businesses that required it.

These, he noted, would help Glo to provide high-speed Internet connectivity, data and voice transmission.

He commended NCA for making the licence bidding process “extremely transparent” as the authority kept to the timeline for issuing the licence as advertised.

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http://www.mainstreettechnologies.net/services.html

The objective of the MaIN OnE project is to deploy a new broadband submarine fiber optic cable system along the west coast of Africa to increase capacity and lower costs for international and intra-Africa voice, data and internet communications.

Traditionally, international communications for countries on the West Coast of Africa have been met by satellite communications services providers from outside the continent and recently by an existing cable system from Portugal to South Africa that was launched in 2002.  These solutions have not adequately meet the needs.

The submerged cable will have a capacity of 1.28 terrabits and will connect the following 10 countries: Portugal.Morocco, Senegal, Cote d’Ivoire, Ghana, Nigeria (Lagos and Port Harcourt), Gabon, the DRC, Angola and South Africa. MST anticipates that parts of the cable will be in place by 2009 and the full system will be ready for service mid 2010..

The MaIN OnE project is a private sector-led initiative to complement and hopefully reduce the costs of internation communication services by providing open access to the cable. Open Access will be ensured by maintaining open and transparent pricing tariffs for the cable that will be uniform, non-discriminatory and denominated in an international currency. Pricing on the cable will be independent of distance.

 

http://www.mainstreettechnologies.net/news_release.html

TYCO TELECOMMUNICATIONS AWARDED MAIN STREET TECHNOLOGIES TURNKEY SUPPLY CONTRACT

LAGOS, NIGERIA and MORRISTOWN, NJ – April 28, 2008

Main Street Technologies announced today the award of the turnkey supply contract for its Main One Cable System to Tyco Telecommunications.

The cable system will span 14,000 kilometers and provide the much-needed high capacity for international and Internet connectivity to countries between Portugal and South Africa on the West coast of Africa.

The submarine cable project is designed in two phases, both of which are scheduled for completion in May 2010. The dual fiber pair, 1.28 Terabits per second, Dense Wave Division Multiplex project will connect Nigeria, Ghana and Portugal in Phase 1 with onward connectivity through Portugal to Europe, Asia and the Americas; and connectivity extending to Angola and South Africa in the second Phase of the project.

Main One will provide international capacity into a region that has experienced explosive growth in tele-density in recent years, but which remains constrained with respect to access to international cable capacity for global connectivity.

The Main One Cable system will provide open access to regional telecom operators and Internet Service Providers at competitive rates that are less than 50% of current international bandwidth prices in the region available via SAT 3 or satellite service providers. As a business championed by local entrepreneurs, the company will encourage local content development via skills transfer of critical networking technologies and job creation with the location of the Network Operational Centre (NOC) for the entire system in Nigeria. The system will ease the difficulties and reduce the costs of switching traffic between African countries without the need to go through Europe, as well as provide broadband capacity to expand Internet access in the sub-Saharan region, which currently stands at less than five percent.

Main Street Technologies Chief Executive Officer (CEO) Funke Opeke stated, “The execution of this contract for us with Tyco Telecommunications is quite timely given the difficulties faced by telecom operators and businesses in Nigeria due to the recently ended strike at incumbent operator NITEL, which shut down SAT 3, the country’s only existing cable access. It demonstrates clearly that African countries such as Nigeria require additional cable capacity and diversity other than SAT3 in order to sustain the growth of their economies and effectively participate in global commerce.”

Quoting Mike Rieger Vice President of Sales, Marketing and Project Management for Tyco Telecommunications, “We are pleased to have won the supply contract for Main One and look forward to delivering the first private, open access cable system in West Africa.”

About Main Street Technologies

Main Street Technologies intends to develop, construct, own and operate the privately funded Main One Submarine Cable System to be commissioned in the first half of 2010. The system will complement the business of Regional operators and Internet Service Providers by providing a wholesale solution for international bandwidth on a shared infrastructure basis. The system is designed to deliver more capacity into the region than any of the other existing or proposed solutions using Dense Wave Division Multiplexing technology of 1.28 Terabytes per second with two fiber pairs.

About Tyco Telecommunications

Tyco Telecommunications, a business unit of Tyco Electronics and an industry pioneer in undersea communications technology and marine services, is a leading global supplier for today's undersea communications requirements.
Drawing on its heritage of technical innovation and industry-recognized performance, the company delivers the most reliable, high-quality solutions to organizations with undersea communications needs vital to their core mission. In more than five decades of operation, Tyco Telecommunications has designed, manufactured, and installed more than 80 undersea fiber optic systems around the world. Tyco Telecommunications’ global presence, backed by industry leading research and development laboratories, manufacturing facilities, installation and maintenance ships, depots, and management team work together to implement integrated solutions and network upgrades, with unsurpassed reliability, that support the needs of telecommunications, internet providers, offshore and science customers worldwide.

For more information, visit www.tycotelecom.com

 

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For more information, see:

 

http://www.iwtgc.com/

IWTGC's Infinity cable [Infinity Worldwide Telecom Group of Companies (IWTGC) ] 

 

http://www.iwtgc.com/images/VSNL_Press_Release.pdf

Memorandum of Understanding Signed Between IWTGC and VSNL

International

New agreement marks a significant step in the successful implementation of the Infinity

West Africa fiber optic submarine cable system

New York and Singapore, April 25, 2007 --

 

 

Infinity Worldwide Telecommunications Group of

About VSNL International:

VSNL International, the international arm of Videsh Sanchar Nigam Limited ("VSNL") (NYSE:

VSL), is a leading global communications service provider offering a comprehensive portfolio of

next-generation Carrier and Enterprise solutions, including Voice, Mobile, Data and Ethernet.

VSNL International owns and operates one of the world’s largest international mobile, voice and

data networks providing global reach to over 240 countries and territories. In addition, VSNL

International owns the world’s largest designed global backbone capacity network, spanning

across 4 continents and comprises of major ownership in 206,356km of terrestrial network fibreoptic

networks and sub-sea cables. It is also one of the largest carriers of wholesale voice

globally.

VSNL and VSNL International are a part of the Tata Group, a $22 billion global conglomerate

comprising 93 operating companies. VSNL International is headquartered in Singapore with

regional offices in the North America, Europe and Asia Pacific.

Visit us at www.vsnlinternational.com or our parent company, VSNL, at

www.vsnl.in

Contact:

Megan Cannell Carolyn M. Robertson

VSNL International STC Associates

+1 609 750 3262 +1 212 725 1900 ext. 204

Megan.cannell@vsnlinternational.com carolyn@stcassociates.com

About IWTGC:

IWTGC, headquartered in New York City, USA, was established in 2003 to bring high speed

connectivity and state-of-the-art IP applications to the West African region. IWTGC was founded

by West Africans who have migrated to the United States and now wish to bring the same

network capabilities to their homeland as are presently enjoyed in the US, Europe, and Asia.

IWTGC has formulated detailed implementation plans to convert the founders’ vision to reality.

(www.iwtgc.com).

Contact: Mr. James Roberts at

info@iwtgc.com

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http://mybroadband.co.za/news/Telecoms/3828.html

Broadband Infraco on track

Duncan McLeod, Financial Mail 16 May, 2008 01:13:00

Broadband Infraco is making headway to build a high-capacity submarine cable

Broadband Infraco, the new, state-owned communications infrastructure company, is making significant headway in plans to build a high-capacity submarine cable along the west coast of Africa. The cable, which will be the world’s longest such system, will cost US$510m and is expected to be switched on in time for the 2010 World Cup.

Known as the Africa West Coast Cable (AWCC), the 13 000km system will follow roughly the same route as the Telkom-controlled Sat-3 cable and also provide competition to the cable that is being built along Africa’s east coast by the Seacom consortium.

AWCC will terminate at Telehouse in London, a vast data centre facility where telecom operators co-locate their switching equipment.

Infraco holds 26% of AWCC’s equity. Telecom operators hold the rest and there is no controlling shareholder. Infraco acting CEO Dave Smith insists government is not trying to crowd out the private sector but is rather trying to ensure an efficient market is created.

With a design capacity of 3,8Tbit/s, the system will provide 32 times the bandwidth of Sat-3 and three times that of the Seacom cable. At first, 320Gbit/s of the cable’s fibre will be lit up; the remainder will come on stream later.

Smith says funding for the system is being provided by a range of local telecom players and will be operated “on open access principles”, meaning no one operator can control access to it.

Infraco has invited telecom infrastructure and value-added network service licensees — typically Internet service providers — to participate in the project. Thirteen companies, most of them South African, have signed the AWCC’s memorandum of understanding.

All SA infrastructure licensees are on board, with the exception of MTN, which is seeking further clarity on a rival project, the controversial Uhurunet system.

Uhurunet, which is backed by the New Partnership for Africa’s Development and SA’s department of communications, wants to build a cable encircling the continent. But some industry executives privately express doubt that Uhurunet will be green-lighted.

AWCC looks set to undermine Uhurunet’s business case. Also, it will be first in the water, as the project’s backers are moving quickly to get going. The investors will be announced within a fortnight, Smith says, and construction should start by September. Manufacturing slots have been reserved, as have cable-laying ships, and the contract to construct the cable will be awarded next month. Two (unnamed) suppliers have been shortlisted.

The cable will have 10 “branching units” alongside the larger countries so that these can join the system at a later date, if they choose to. “We want to ensure the trunk project is not delayed,” Smith says.

Namibia, which does not have direct access to Sat-3, will be one of the first countries to build a landing station for the cable. The cable, which has a design life of 25-30 years, will also come ashore in the fast-growing West African markets of Nigeria and Ghana.

Initial plans to extend a branch of the cable to Brazil have been shelved, says Infraco director Cornelis Groesbeek.

Infraco will invest $130m in AWCC (proportional to its shareholding) using a mixture of equity and debt funding. “Infraco is a commercial state-owned enterprise with strategic intent,” Groesbeek says. “That means it has to pay its own way and has to borrow money from the commercial market like any other operator. Unlike other operators, though, it doesn’t have a licence to rip people off.”

Unlike in Sat-3, AWCC consortium members will not collectively set prices for bandwidth. Rather, each participant will be able to take its product to market with its own tariffs. This, Groesbeek says, will help ensure a competitive market in international bandwidth and drive down prices.

Broadband Infraco Discussion

 

See also:  http://www.engineeringnews.co.za/article.php?a_id=134967

African West Coast Cable (AWCC) initiative, South Africa

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Companies (IWTGC) (Infinity) and VSNL International Pte Ltd. ("VSNL International"), the

international arm of Videsh Sanchar Nigam Limited (NYSE: VSL), have executed a Memorandum

of Understanding (MOU) as a first step towards VSNL International assisting IWTGC in its West

Africa fiber optic submarine cable project.

IWTGC plans to deploy telecommunications services in West Africa using an international and

regional integrated fiber optic system and wireless broadband network with an initial estimated

cost of over $750 M USD to be privately financed. The system will be operated under the

principals of Open Access and will offer its services to all licensed service providers as well as

enterprises and consumers on a non-discriminatory basis.

Vinod Kumar, Managing Director and President of VSNL International indicated, “Infinity’s stated

goal of constructing and operating a cable system along the west coast of Africa is important to

the region and I, personally, would like to see them succeed in this endeavor. VSNL International

is pleased to assist Infinity by leveraging its expertise in designing and operating large submarine

cable systems as well as providing seamless global connectivity using its extensive cable assets.”

The Infinity system will significantly increase broadband penetration among users and offer

service providers and enterprises total regional connectivity and an international gateway to the

World-Wide-Web and major cities around the world. The Infinity system will also greatly

contribute to reducing the digital divide currently prevailing in West Africa by bringing desperately

needed, increased and diversified capacity to supplement and provide more security to the West

African traffic carried on the existing cable system and satellites.

Bob Woog, Chief Operating Officer of Infinity added, “The relationship between Infinity and VSNL

International will allow us to offer our customers in West and Central Africa access to the world

using, where possible, the VSNL International global network. The world’s telecommunications

markets are now within our reach from day one.” He further added, “Our developing relationship

with VSNL International is likely to be fundamental in the rapid implementation of this critical

project for the African continent.”