India Wires Africa to Beat China

The government of India is awarding millions of dollars in grants to African countries for a cross-continental communications network, in the hopes of selling some telecom gear -- and sticking it to China in the process.

The Indian government is investing $1 billion on a massive joint initiative with the African Union to build a Pan-African e-Network (PAN), which will hook up 53 countries with integrated satellite, fiber, and wireless connectivity.

The project, first outlined in a memorandum of understanding between the two parties in October 2005, is moving ahead with Ethiopia, South Africa, Ghana, and Mauritius as the first beneficiaries and Senegal hosting the network hub.

State-owned Telecommunications Consultants India Ltd. (TCIL) has been selected to implement the network, which India will manage for five years before turning it over to the African Union. An invitation for expressions of interest (EOI) to provide satellite capacity for the network closed yesterday.

According to the tender document on TCIL's Website, "The proposed network is a satellite-based star/mesh network in C-band designed initially to support about 169 VSAT terminals with a hub station in Senegal." TCIL is looking for an initial leasing agreement of one year, to be reviewed at a later date.

The network, which will feature video conferencing and VOIP connectivity, will connect the offices of the heads of state in each country, and also provide a range of applications, including online education, telemedicine, e-commerce, e-governance, and "infotainment."

“The Network will consist of 5 regional universities, 53 learning centers, 5 regional Super Speciality Hospitals and 53 remote hospitals in all countries of Africa," according to a press release from India's Ministry of External Affairs. There will be 6 universities and 5 Super Speciality Hospitals from India linked into the Network,” so that the participating organizations can use “Indian expertise in information technology to bring benefits of healthcare and higher education to all countries of Africa, including in remote areas.”

But the move isn't entirely altruistic -- the Indian government is using it as an opportunity to drum up business for the country's telecom companies, including state-owned equipment vendor ITI Ltd. and TCIL, as well as boost demand for IT services. It also wants to thumb its nose at China.

Government officials have made no bones about the fact they want to plant a flag in Africa's nascent ICT markets before China -- and its goverment-backed telecom vendors -- steps up its investments in the region. For example, at a recent workshop on India-Africa trade relations, R.P. Sehgal, regional chairman of India's Engineering Export Promotion Council (EEPC), referred to the project as part of India's strategy to strengthen "our economic ties with Africa before we lose out to China," according to media reports.

The project is just the latest example of rivalry between the two nations in the telecom space, where the Indian government is trying to restrict the growth of Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) in its domestic market. (See India Blocks Foreign Telecom Gear and India Leery of Foreigners, ZTE.)

The Chinese vendors are already making inroads into the African markets though. (See WorldCall Picks Huawei, Huawei Wins Moroccan IPTV Deal, ZTE Supplies ATM Mobilis, ZTE Supplies African ISP, Huawei Touts Brazil, Africa Wins, and Huawei Lands Nigeria Deal.)

And last Friday, a spokesman for Ethiopia Telecommunications Corp. told Reuters the carrier has awarded a three-year, $2.4 billion network expansion contract to ZTE, Huawei, and Chinese International Telecommunication Construction Corp. to increase the capacity of its fixed and mobile networks and extend its fiber network from 4,000 to 10,000 kilometers.

— Nicole Willing, Reporter, Light Reading