Broadband Infraco, the new, state-owned communications infrastructure company, is making significant headway in plans to build a high-capacity submarine cable along the west coast of Africa. The cable, which will be the world\u2019s longest such system, will cost US$510m and is expected to be switched on in time for the 2010 World Cup.<\/p>\n
Known as the Africa West Coast Cable (AWCC), the 13 000km system will follow roughly the same route as the Telkom-controlled Sat-3 cable and also provide competition to the cable that is being built along Africa\u2019s east coast by the Seacom consortium.<\/p>\n
AWCC will terminate at Telehouse in London, a vast data centre facility where telecom operators co-locate their switching equipment.<\/p>\n
Infraco holds 26% of AWCC\u2019s equity. Telecom operators hold the rest and there is no controlling shareholder. Infraco acting CEO Dave Smith insists government is not trying to crowd out the private sector but is rather trying to ensure an efficient market is created.<\/p>\n
With a design capacity of 3,8Tbit\/s, the system will provide 32 times the bandwidth of Sat-3 and three times that of the Seacom cable. At first, 320Gbit\/s of the cable\u2019s fibre will be lit up; the remainder will come on stream later.<\/p>\n
Smith says funding for the system is being provided by a range of local telecom players and will be operated \u201con open access principles\u201d, meaning no one operator can control access to it.<\/p>\n
Infraco has invited telecom infrastructure and value-added network service licensees \u2014 typically Internet service providers \u2014 to participate in the project. Thirteen companies, most of them South African, have signed the AWCC\u2019s memorandum of understanding.<\/p>\n
All SA infrastructure licensees are on board, with the exception of MTN, which is seeking further clarity on a rival project, the controversial Uhurunet system.<\/p>\n
Uhurunet, which is backed by the New Partnership for Africa\u2019s Development and SA\u2019s department of communications, wants to build a cable encircling the continent. But some industry executives privately express doubt that Uhurunet will be green-lighted.<\/p>\n
AWCC looks set to undermine Uhurunet\u2019s business case. Also, it will be first in the water, as the project\u2019s backers are moving quickly to get going. The investors will be announced within a fortnight, Smith says, and construction should start by September. Manufacturing slots have been reserved, as have cable-laying ships, and the contract to construct the cable will be awarded next month. Two (unnamed) suppliers have been shortlisted.<\/p>\n
The cable will have 10 \u201cbranching units\u201d alongside the larger countries so that these can join the system at a later date, if they choose to. \u201cWe want to ensure the trunk project is not delayed,\u201d Smith says.<\/p>\n
Namibia, which does not have direct access to Sat-3, will be one of the first countries to build a landing station for the cable. The cable, which has a design life of 25-30 years, will also come ashore in the fast-growing West African markets of Nigeria and Ghana.<\/p>\n
Initial plans to extend a branch of the cable to Brazil have been shelved, says Infraco director Cornelis Groesbeek.<\/p>\n
Infraco will invest $130m in AWCC (proportional to its shareholding) using a mixture of equity and debt funding. \u201cInfraco is a commercial state-owned enterprise with strategic intent,\u201d Groesbeek says. \u201cThat means it has to pay its own way and has to borrow money from the commercial market like any other operator. Unlike other operators, though, it doesn\u2019t have a licence to rip people off.\u201d<\/p>\n
Unlike in Sat-3, AWCC consortium members will not collectively set prices for bandwidth. Rather, each participant will be able to take its product to market with its own tariffs. This, Groesbeek says, will help ensure a competitive market in international bandwidth and drive down prices.<\/p>\n