More cable slack
Government appears to be softening its stance over who can and who can’t land submarine telecommunications cables in SA. It previously indicated cable systems landing here would have to be majority SA-owned, but communications director general Lyndall Shope-Mafole now says shareholding by African investors will count towards ownership requirements.
This is good news for Seacom’s Sea cable, a private sector-led project to build a cable along Africa’s eastern shoreline that connects SA with India and Europe. But the rival East Africa Submarine System (Eassy) is still to get the green light. Though Eassy appears to comply with the proposed ownership requirements, Shope-Mafole warns that its “structure” would still preclude it from landing in SA.
Eassy enjoys the financial backing of the World Bank, which has criticised government’s threats to block the cable from landing here. Both Eassy and Seacom’s Sea cable, if built, will run along Africa’s east coast and provide connectivity to countries which still rely on expensive satellite capacity for international communications. Eassy is 27%-held by Telkom, MTN and Neotel The shareholders in Seacom have not yet been named but the company is 25% SA-held.
Shope-Mafole and communications minister Ivy Matsepe-Casaburri have come under fire over government’s proposed policy, which will set out the conditions for building submarine cables that land in SA. Critics say the document, which is expected to be released in draft form by the end of November, will chase away foreign investment in an area of the economy where it is critically needed.
Shope-Mafole says local ownership is necessary to ensure “national security” and to foster African development. The policy document will be written to ensure SA telecom companies do not exploit other African countries. She says government is keen to avoid a situation elsewhere on the continent similar to the one in which Telkom was able to use its monopoly to hike prices and maximise profits.
The softening of the proposed policy comes in the same week that 12 African states announced plans, under the auspices of the New Partnership for Africa’s Development (Nepad), to build a submarine cable system encircling the continent, at a cost of US2bn (see map).
The proposed cable, which will be 30%-held by a Nepad-led special purpose vehicle and 70%-held by private investors, will encircle the continent and connect SA and other African countries with Europe, India and the Americas. The proposed system, the first phase of which is due to go live in 2009, will have a design capacity of 3800Gbit/s. That’s 32 times the capacity of the Telkom-controlled Sat 3/Safe cable, which now serves SA’s international bandwidth needs.
Nepad has not yet said which companies are investing in the system, but Nepad e-Africa Commission director Henry Chasia says there has been keen interest from the private sector.
Matsepe-Casaburri hopes other cable projects, such as government’s InfraCo cable, which is meant to connect SA with Europe and Latin America, as well as the Seacom system, will be incorporated into the Nepad mega project.
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