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March 19, 2010
It hasn’t been easy, but reports today say another East African subsea cable is on the verge of reaching its final destination, bringing much-needed connectivity to the continent.
The 10,000-kilometer Eastern Africa Submarine Cable System (EASSy) is set to land in Mombasa, Kenya, on March 21, a few days ahead of schedule, and is on track to go into commercial service at the end of June.
"I am extremely happy with the progress being made on the vital construction phase of EASSy," says Chris Wood, CEO of the West Indian Ocean Cable Company (WIOCC), which owns a 30 percent stake in EASSy. "The project continues to run as planned, with nearly 70 percent of the cable now laying in the Red Sea and the Indian Ocean. We expect to start testing the system at the end of April 2010, in readiness for the System Ready for Service date on 30 June, 2010," he tells Light Reading by email.
EASSy will be the third subsea network to land in Kenya: Seacom Ltd. went into commercial service in July 2009, and The East African Marine System (TEAMS), which is mostly funded by Kenyan companies, the month prior. (See Seacom, Tyco Connect East Africa.)
Seacom also said today it has signed up another African incumbent, Ethiopia Telecommunications Corp. (ETC), to provide international broadband fiber connectivity to the landlocked country via a backhaul link through Djibouti. The Ethiopian government is currently rolling out a US$1.5 billion national initiative to improve that country’s telecommunications infrastructure.
The deal with ETC will no doubt be a welcome development for the Kenyan government, which has expressed concern about the slow uptake of capacity so far.
That there is unmet demand in Africa is clear: Just 3 percent of Africa’s population has access to broadband, and the continent's total Internet penetration is just 8 percent. But the continent is still governed by rigid regulatory regimes with dominant incumbent operators largely in charge.
"African operators [will be required] to adapt their strategies to a much more competitive environment," states Pyramid Research analyst Dearbhla McHenry in a report, "Undersea Cables to Drive an African Broadband Boom," published late last year. "The combination of lower bandwidth costs and greater competition means that almost all African broadband providers, whether fixed or mobile, will have to rethink their strategies."
McHenry added that former monopolists "will have to compensate for lower wholesale revenue by expanding their subscriber bases among both ISPs and end users, while new entrants will seek to gain market share without straying into dangerous hypercompetition."
McHenry noted that a total of 12 new cables were set to be launched between 2009 and 2011, increasing Africa’s total international bandwidth from around 6 Tbit/s to 34 Tbit/s (mostly unlit at first), and reducing the number of coastal countries without any cable access from 19 to one (Eritrea). As a result, Pyramid predicts that total broadband adoption in Africa will increase at a compound annual growth rate (CAGR) of 28 percent between 2009 and 2013.
The new subsea cables will not only increase capacity, but will also bring down the currently astronomical cost of international connectivity. Until now, operators and enterprises have been forced to rely on expensive satellite links, or cough up the prices charged by the monopolies that controlled local access to subsea cables. "Rates for SAT-3, for example, are about $4,500 to $12,000 per Mbit/s per month, which is more than 20 times more expensive than bandwidth prices in the U.S.,” commented McHenry in the report.
How low prices will fall is still open to question, following some rather optimistic predictions made early on by operator partners in some of the subsea projects. McHenry said the Pyramid outlook is that average wholesale broadband prices "will eventually fall from about $3,000-$4,500 per Mbit/s per month to about $500-$1000."
Of the new East African cable systems, EASSy has perhaps had one of the highest profiles, due to its early struggles in 2002 to get off the ground (so to speak). The project is now two years behind the original schedule, due to squabbles among the operators over funding and usage fees. It faced further setbacks recently because of Somali pirates, who, according to reports, forced a 400-kilometer reroute of the cable at a cost of $6 million.
— Anne Morris, freelance editor, special to Light Reading
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