EASSy– THE “BEHIND-CLOSED-DOORS” DEBATE
Nepad’s e-Africa Commission and the World Bank would like to its built using a Special Purpose Vehicle (SPV) with open access principles and the EASSy consortium is also pledging open access but wants a “co-ownership” consortium.
But sides agree that they do not want to see a repeat of the SAT3 cable consortium: as KDN’s General Manager David Owino put it:”The SAT3 (structure) was a mistake and we are all trying to learn from it.” However all sides are still negotiating their positions and many things are being said verbally by that have not been committed to paper.
NEPAD’s e-Africa Commission has done the work on its SPV proposal (presented by Brian Cheesman) but the EASSy consortium have not produced a clear counter-proposal.
The whole issue is beset by “Chinese whispers” in which all involved have slightly different understandings of what is happening. A representative from CCK said that the e-Africa Commission had produced seven open access principles that the project must meet. E-Africa Commission’s Brian Cheesman read out five principles, some of which were not really principles.
EASSy Project Co-ordinator John Sirha told us in an interview two weeks ago that there were four principles and he could not remember what the fourth one was. This is not to belittle those involved but simply to point out that this discussion has taken place behind closed doors and that much of the substance is still in verbal understandings. Having to take someone’s word in a situation where EASSy’s position has so clearly shifted over time cannot breed trust.
Consortium member, Jama Mohamed from Dalkom of Somalia gave a solemn commitment to lowering prices:”This project will reduce prices by 65% in the short-term and by 85% in the long-term.” So if we take the US$6,000 mbps per month (duplex) that TESPOK Chair Joseph Mucheru says his company Wananchi pays, it will go down to US$2100 in the short-term and $900 in the long-term. The EASSy consortium’s business plan is based on a 20-25% profit margin and a payback over 5-10 years. The longer payback figure is for countries that have smaller bandwidth requirements.
The total capital cost of the coastal part of the project is now costed at US$280 million and Jama of Dalkom said that thus far it had US$110 million of signed commitments but that “the remaining commitments will be with us shortly.”
The EASSy consortium are still insisting that potential investors have an international gateway licence which has put the South African Government in the absurd position of saying it will grant the country’s three mobile operators gateways in order to invest. Jama of Dalkom said that Vodacom was buying its capacity from its Mozambican subsidiary.
Nevertheless the Consortium made a special case for the Lesotho regulator to become a consortium member because “it was going to was going to be a custodian (of the bandwidth) until Lesotho finished its liberalisation process.” This description of the rationale for the exception has neither logic nor sense on its side and smacks of “making it up as you go along”. If you make this one exception, why not several others?
Eme Ession, Senior Investment Officer, IFC said that the World Bank wanted to act as an “honest broker”. It had no power to force the EASSy consortium members to do anything. It was clear that EASSy was not proposing a SAT3 “repeat” but on open access that “there are many shades of grey that we need to look at.”
The World Bank would prefer to invest in the SPV but if that was rejected and individual governments (or their telcos) sought their help they would provide on the basis of adherence to some version of open access.
It was working closely with the Eastern African backhaul group to get national backbones and regional links built in order to pressure the consortium to reach a decision. It felt that a lot of progress had been made on pricing and other issues but that it would like to see more progress made. But as Ession said:”We have not seen the key agreements, particularly on governance.
African Ministers will be meeting at the end of April to make their positions clear on the issues raised.
Ensuring affordable and open access to EASSy: a consultation for key stakeholders on EASSy was an event organised by APC, Balancing Act and CIPESA.
Source: http://www.balancingact-africa.com
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