EASSy Cable costs more per Kilometer the SEACOM
Kenya: Eassy Investors to Pay More for Fibre Optic Cable
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Business Daily (Nairobi)
17 August 2007Posted to the web 16 August 2007
Okuttah Mark
Investors in the South Africa-fronted undersea fibre optic cable will pay the highest price for its construction, signalling the fact that accessing it may cost as much.
Telecommunications experts said construction of the East African Submarine System (EASSy) will cost investors Sh2,000 more per kilometre than the building of East African Marines System (TEAMS) and private sector-driven SEACOM.
People familiar with the matter told the Business Daily that while the laying of the EASSy undersea cable has been priced at $26,161 per kilometre, TEAMS and SEACOM will spend only $23,275 and $23, 076 per kilometre espectively.
The high cost of constructing EASSy is seen to be particularly burdensome to investors because the project managers recently declined a co-building offer from SEACOM- the South African firm that plans to build an undersea cable along the same route.
Such a partnership would have allowed each party to own individual fibre pairs on the desired route while making significant saving through sharing of key facilities such as repeaters, landing and power stations.
Senior telecoms industry officials have previously indicated that it would cost EASSy customers $500 mega bites a month in bandwidth- more than twice the cost of bandwidth in India where the cost stands at $200 mega bites a month.
Simon Olawo of the EASSy secretariat says the cost of laying out cables is mainly determined by the distance covered, equipment installed, the number of landing stations and tax payable to respective governments.
Plans by EASSy initiative to construct and operate a submarine fibre optic cable along the Eastern coast of Africa has faced a number of hurdles, including disagreement over the mode of access.
The cable, which will cover the longest distance, is expected to have an initial equipped capacity of 20 gegabits per second and an ultimate capacity of 320 gegabits/second. It will run from South Africa to Sudan through Mozambique, Madagascar, Tanzania, Kenya, Somali and Djibouti.
TEAMS, a partnership between the Kenya government and the United Arab Emirates telecom company Etisalat, will connect Mombasa to Fujairah in the Gulf of Oman. The total cost of the project that is expected to be complete by end of next year is $110 million.
The Government has 40 per cent stake in the project while Etisalat has 20, leaving the other 40 per cent to local private investors. During this year's budget, the Government allocated Sh1billion for the project and has been on an agressive hunt for private investors.
The International submarine cable industry has been growing at unprecedented pace. Several projects are under way, with two being undertaken between US and China while the other is between US and Australia- with three projects for Africa and two from the Caribbean to US.
With ongoing number of projects and taking into account that only three companies have the ability to manufacture and construct the cables, namely Alcatel, NEC and Tyco, meeting aggressive time line for some of the project such as Teams might be difficult.
Business Daily (Nairobi)
