As businesses thirst for broadened communications technology, the battle for broadband as opposed to satellite technology writes Humphrey Odhiambo is gaining momentum in Eastern African coast, the world’s fiber optic cable virgin market.Three projects in the works to link 22 eastern, central and southern African countries to the world’s network of submarine cables and 21st century communications are challenging satellite services. Their successful deployment promises to enhance cheaper international calls and fast Internet access with no static charges.

Racing under the sea to the region from different directions are The East Africa Marine System (TEAMS), Sea Cable Communications (SEACOM) and Eastern Africa Submarine Cable Systems (EASSy) and the question is if they’ll ever right-off satellite.

THE DASH TO BROADEN PIPE OF COMMUNICATIONS linking an estimated 400 million people in 22 Eastern African countries is on. The laying of fiber optic cables along the region’s virgin broadband market signals a head-on business challenge to the alternative satellite communications.

Even the telecommunication operators that had initially invested heavily in satellite communications aren’t playing a second fiddle in owning and hastening rollout of both the undersea and landline national fibre cables that will lead to lower connectivity pricing, high-demand market and indeed changing of the pricing paradigm.

The quest to render valuable services with the optional fiber cable showcases the region abounding to business opportunities. Links which would drive down communication costs for businesses and consumers could as well be a big bet for entrepreneurs.

Generally satellite communications, which has over the years prompted high-pricing and ultimately creating an artificially low demand investor-market, is having a prescription that most businesses aren’t waiting to budget for. Ahead of even commissioning the fibre optic cable initiatives, a pent-up demand for the technology is in the offing. Considering that 90 percent of calls between African countries are routed by satellite through Europe or North America at a cost of US$ 400 million a year, it proves to be a viable option.

Embedded into the deep Indian ocean waters to connect the region to the world are the 5,000 kilometer The East Africa Marine System (TEAMS), 8,000 kilometer Sea Cable System (SEACOM) and Eastern Africa Submarine Cable Systems (EASSy)conceived by a group of East African businessmen in November 2002.

Although it is now evident that both TEAMS and SEACOM have made significant interconnectivity in-roads following their investments in the Indian Ocean, EASSy is heightening competition in the broadband market. The West Indian Ocean Cable Company (WIOCC) recently announced that the first section of the EASSy cable has been loaded on a ship for transport and is on course to Mozambique.

With the expectation of having the first fully operational fibre optic cable by the end of July, the marking of a new beginning of the end of crackling long-distance calls, slow dial-up Internet connections, institutions of learning without e-mails will history.

Complimenting projects deployed at the Indian Ocean beds are national fiber optic investments rolled-out in Eastern Africa countries by private sector players and governments in those states.

For Kenya, the fiber couldn’t come fast enough

Kenya, one of the most dynamic economies in the East African region wants to drive down telecommunications costs to tap into the multi-billion dollar outsourcing industry and make the country an information technology hub, said Dr. Bitange Ndemo, the country’s information and communications permanent secretary.

Despite relying on expensive satellite based communications, the country’s nascent business call centers has grown from employing 200 people in 2006 to approximately 8,000 this year.

To get more companies to give their business to Kenyan call centers, the country needs to increase its bandwidth up to 500megabits per second and subsidize the communication cost until a submarine fiber-optic cable is fully operational.

With the view that EASSy project was holed in protracted negotiations over its ownership, funding, and debate about whether it will be for profit, the government following the strong advisory of Dr. Ndemo teamed up with the United Arab Emirates telecommunications company Etisalat, and set up the TEAMS, project in November 2006.

Kenya will finance 40 percent of the project, Etisalat 20 percent and the country’s private sector investors’ are sharing the remaining 40 percent.

Is the market ready for broadband communications?

According to Dr. Ndemo, the country would be any ready as it is now. After a year of hype about the cables and threats by the notorious Somali pirates in the Indian Ocean, the ship laying the cable docked at a landing station in Mombasa, flanked by a French navy ship.

Given the combination of government and private sector ownership, TEAMS whose time seemed to have been long over due is billed as the most affordable telecommunications option.

One major expectation is that the cost of connectivity in East Africa will tumble says Peter Reinartz, the Telkom Kenya deputy chief executive office. “It is evident that businesses should expect a drop from US$ 2,500 per megabyte to US$ 400 per megabyte.”

Asked how the cost will come down when the market is dominated by the private sector, which wants to maximize on profit margins, Reinartz couldn’t hesitate to note that competition will dictate the market pricing levels.

Telkom Kenya which has already a national communications backbone and has invested heavily in satellite communications has no option but to offer highly competitive cost to the end user.
“The company has an investment bias on fibre optic much as it will maintain satellite link as a back-up going foward,”said Reinartz.

Bundled fiber cable megabyte sale packages will mainly target businesses. Reinartz said the testing phase will not guarantee 100 percent optimum service. “Operationalization of the TEAMS cable is however expected to be uptime by around September this year,” he added.

Private initiative with the mission to develop Africa’s ICT and to transfer knowledge through research and development, Kenya Data Networks, a private company has taken a social responsibility to build a national fibre optic cable ring for the high-end rural and urban delivery in efforts to provide universal access.

According to Kai Wulff, KDN’s managing director; the company is investing over US$ 200 million to put fibre to cover the country. “The company has planned to spread its network to touch the lives of over 80 percent of the Kenyan population using the Digital Village Network. This will enable the government and other service providers to bring their services closer to the people.

The fibre networks that KDN and other players are deploying across the country are squarely meant for interconnection to the undersea cable.

Reinartz notes that the fibre are strands of glass formed into cables and will therefore greatly save costs of rolling out copper cables that are prone to vandalism.

Signals are transferred over the cable as beams of light. The advantages of fibre optic cable are the virtually unlimited capacity, low maintenance and long life expectancy.

Looking into the future, the need for capacity within any network is a priority. Any network should not only carry data communications but also voice and video. Although applicable in satellite communications, the speeds are lesser when compared to transmission on the fibre cable network says Wulff noting that thecurrent trend has been the unending need for more network capacity.

At the moment, KDN has one of the largest fibre optic network in the country considering that it has rolled out the technology from Mombasa to Kampala - a stretch of about 1,500 km. The company is still digging trenches to lay the cable. While it is a capital intensive project, the technology meets the needs of communications that would handle advanced capacity for future needs besides having longer usable network life.

Wulff notes that availability of capacity as is the case in satellite communications is not subject to licensing. “The available capacity is therefore sufficient to interconnect units of government and has further potential to lease capacity to businesses that would provide additional services to communities such as cell-phone and internet services,” he explains.

Reinartz affirms that owing to the technical advantage of having low latency, Telkom Kenya will not invest more on satellite communication as it will on fibre optic cable.

According to John Conlan, among the biggest beneficiaries of the cable will include the banking industry, Business Process Outsourcing and multinational companies planning to invest more in the country.

Companies opting to have virtual private networks will also greatly benefit from the innovation, added Conlan as he noted that it was quite visionary for the government to invest on the National Fibre Optic Initiative (NOFBI).

At the moment most of the regional telecom infrastructure initiatives are dictated by commercial agreements between private telecom suppliers.

The governments are always caught in the middle between the private sector intentions of increasing shareholder value and reducing price for user[s] said JohnWalubengo, acting dean of ICT at the Kenya Multimedia University.

The most complicated part is that thebig telcos such as KDN, Access Kenya, Jamii Telecom, Safaricom Essar Telecom Kenya and Telkom Kenya are also the major owners of TEAMS, while the rival SEACOM cable project is wholly private.

No company has come up with ways to bring prices down, or said what will happen to those with business contracts for the older technology.

Paul Kokubo, the Kenya ICT Board chief executive officer is affirmative that cables alone will not bring prices down.

“Competition brought about the cable will bring the communication prices down,” he says citing that although in instances where the cables are controlled by incumbent operators, prices might slowly come down; the end-users will sooner go with the best offers.

At the moment the investors have maintained that the prices will come down, but have not talked about how open their business models would be to people who have not invested but would like to lease the infrastructure.

While launching the arrival of TEAMS in Mombasa, President Mwai Kibaki says the TEAMS project, which is a public private partnership between the Kenyan government and private companies, is geared toward connecting the East African region with the rest of the world and harnessing the power of ICT.

The project, Kibaki said, would empower the East Africans to become digital citizens, adding that it was a big step in the delivery of quality services in the ICT sector in the region.

SEACOM CEO Brian Herlihy said the more players there are in the communication market, the greater the benefits the customer will have as a result of increased availability of bandwidth.“We welcome competition and look forward to seeing Africa become truly connected to the rest of the world,” Herlihy said.

SEACOM management said the cable will assist communication carriers in southern and East Africa in providing wholesale capacity for global network connectivity.

Readily accessible bandwidth, Kibaki said, will not only lower telecommunication costs in the region but also provide new opportunities in all sectors including e-health, scientific research and e-commerce.

TEAM’s project shareholders include mobile service provider Safaricom, Telkom Kenya, Kenya Data Network, Africa FibreNet of Uganda and Etisalat of the United Arab Emirates.

George Tapfumanei, communications officer for the African Agency for ICT development, said Africa’s reliance on satellite communication is slowly diminishing because of the fiber-optic cables being developed.

The country expects the arrival and full operations of TEAMS,SEACOM and EASSY submarine cables to reduce cost of communication and solve the problem of insufficient bandwidth, numerous companies as well as the government will adjust their budgetary components based on the projections and services that the fibre optic cables are lined to offer.

Government to expand broadband

Internet Access and the data market in Uganda are poised to expand vastly following government announcement that it would invest a staggering$61 Million to extend the reach of its broadband infrastructure network to far flung regions of the nation this Financial Year.

Uganda’s publicly owned national internet backbone currently covers only the capital, Kampala and a small radius of about 30kilometers around it, starving upcountry populations of access to fast internet and data services.

“The main priority In the FY 2009/10 will be the completion of the interconnectivity of the entire country,” said Uganda’s Finance Minister, Ms Syda Bbumba in her Budget Speech on June 11th. The Government, she said, will this financial year lay an additional 1500 KMs of optical fibre to link more than 16 towns in the country’s major regions of North, West and Central.

If successfully implemented, this public investment would be unprecedented in scale and promises not only to immensely uplift rural communications but also inject a measure of vibrancy into the nation’s data market that has hitherto remained staid, puny and marginally profitable.

According to the Ministry of ICT, the $61million will cover the laying of the fibre and installation of regional switch hubs and terminals. The money is part of a US $106 million loan the government secured from the Chinese government in 2006through that country’s Export Import, Exim bank. The loan has been disbursed in three installments with the first batch of$30 million, released in 2006.

So far, the government – through China’s ICT engineering beacon, Huawei Technologies - has laid 168 kilometers of the optic fibre in four districts and has linked all government ministries and departments.

According to the ICT Minister, Mr. Aggrey Awori, the cable is meant to “enhance connectivity and transmission of data, voice and video communication, as well as improving efficiency and transparency in service delivery by government to people.”

At its conception the project was principally meant to facilitate the running of an e-government, help drive up efficiency in public service and cut the exploding cost of public administration.
The cable though has huge bandwidth and the government is to offer extra capacity for purchase by the private sector.

“What we wanted to achieve first was getting all government units connected so we are able to share data and voice on our intra-networks but because the government can’t use all of the bandwidth on the cable, a lot of it will be made available to private sector, increasing the amount of bandwidth resources for the private sector,” Mr. Awori said.

The extension of the national backbone will also help break the monopoly of Warid Uganda, MTN and UTL –the three telecoms that are operating the two privately-owned terrestrial networks in Uganda.

And more remarkable while the telecom companies have limited the reach of their cables to big municipalities which guarantee a comparably high return on investment, the key principle driving government’s broadband infrastructure investment is universal access.

Profit-driven infrastructure ICT investments are exclusive in nature and often tend to leave huge patches of a country, particularly one still largely rural like Uganda, unconnected and information starved.

Uganda’s online community is still disproportionately concentrated in Kampala and a handful of other big municipalities and telecom companies’ have tilted most of their investments in internet connectivity toward these areas.

Ms Bumba asserted that public investment in expanding ICT infrastructure would “enhance efficiency in the transfer of information and consequently lower the cost of doing business.”

With the East and Southern Africa region about to be hooked onto to the undersea optic fibre cable, SEACOM, the Uganda government’s spending on broadband infrastructure couldn’t be timelier.

The construction of SEACOM (both sea and land-based civil works), the cable connect the region to the world’s broadband networks, is on the last stretch of its completion and testing is currently underway, according to the company headquarters in Mauritius. Commercial launching is lined for end July.

Currently, East and Southern African is the only region in the world without a marine optic fibre connection and still relies on satellites for relay of its digital traffic, an outmoded technology that has slowed the growth of the ICT sector.

SEACOM has been touted as capable of lowering bandwidth costs to less than half of their current levels and ICT experts expect the cable’s launching to ignite frenetic activity in the sector as ICT retailers and value-added start-ups scramble to innovate and piggyback on the abundant and cheap bandwidth to sell data services.

“Government’s allocation of money to expand broadband connectivity is prudent and it will act as some sort of stimulus to the sector at a time when business has slowed, sapped by the global financial crisis,” said James Wire, a software development expert and the managing director of Linux Solutions based in Kampala. “The only worry, of course, is whether the money will reach its proper destination or will be creamed off mid journey.”

SEACOM delays cable plans
By Rebecca Wanjiku,

SEACOM has delayed its switching-on date by a month, after threats by Somali pirates along the Indian Ocean route from India disrupted the cable installation plans.

SEACOM was expected to light up at a fancy hyped party in the coastal city of Mombasa on June 27, but the party has been pushed to July 23. Increased pirate activity in April and May, in terms of intensity and geographical coverage, necessitated changes in cable installation plans.

“The planned route required the ship to transit an area of increased pirate activity where other ships had been attacked or seized,” said Brian Herlihy, SEACOMCEO. “It was imperative that strong measures be put in place to guarantee the successful completion of the cable system and the safety of the ship and its crews.”

The Somali pirates have terrorized ships along the Gulf of Aden and have outmuscled combination of naval ships from NATO countries and the Kenyan navy, a weaker contingent compared to western forces.

The ship laying the cable from South Africa (Mtunzini landing station) to Kenya (Mombasa) docked at the port two months ago, and the cable has already undergone testing. SEACOM, which is hoping to be the first provider of fiber-optic connectivity in East Africa, pegged the lighting-up date as June 27, hoping to navigate the chaotic Somali waters in two months and test the whole cable system.

“This setback should, however, be seen against the Herculean efforts made by the team to see this project come to fruition over an incredibly tight schedule of only18 months. We remain extremely excited and look forward to witnessing the huge difference that affordable, high-quality and plentiful bandwidth will have throughout eastern and southern Africa,” Herlihy said.

In the meantime, SEACOM is working with its contractor, Tyco Telecommunications, to find ways to accelerate the work that remains to be done and push up the service date to before July23.

The East Africa Marine System ship laying cable from Fujairah in the Middle East to Mombasa docked two weeks ago, and the cable owners promised to fully deploy and test the cable and offer services by September.

While TEAMS is owned by a public private partnership, SEACOM is privately funded and over three-quarters African owned.

The two cables are competing in their launch dates and provision to African retail carriers for equal and open access to inexpensive bandwidth, removing the international infrastructure bottleneck and supporting east and southern African economic growth.

SEACOM’s two fiber pairs will have capacity of 1.28TB/s, to enable high definition TV, peer-to-peer networks, IPTV and surging Internet demand. Pricing will be significantly lower than current satellite.