Seacom cable construction begins

13 December 2007

Tyco Telecommunications has announced that it has started construction on the US$650-million Seacom undersea fibre-optic cable, which will link southern and eastern Africa with India and Europe by 2009, bringing down connectivity costs on the continent.

“Seacom’s offerings will complement communication carriers of south and east africa through the sale of wholesale international capacity to global networks eastward through India and westward through Europe,” Tyco said in a statement on Wednesday.

“The system will provide African retail carriers with equal and open access to inexpensive bandwidth, removing the international infrastructure bottleneck and supporting east and south African economic growth.”

According to Tyco, the increased capacity of the cable as compared to existing infrastructure will enable the greater availability and lower cost of high-demand services such as high definition television (HDTV), peer to peer networks and internet protocol television (IPTV).

Majority African owned
South African companies will own half of the private equity funded Seacom undersea fibre-optic cable, with total African ownership of the cable to reach 75%.

The future of the 15 000km SEA Cable System (Seacom) was previously in doubt when Communications Minister Ivy Matsepe-Casaburri announced that any cable landing in the country would have to be majority South African owned.

Business Day reported in November that local investment company VenFin was putting in $75-million for a 25% stake in the project, while black economic empowerment companies Shanduka and Convergence Partners were each taking a 12.5% stake worth $37.5-million.

The paper added that Industrial Promotion Services, a unit of Kenya-based development agency the Aga Khan Fund for Economic Development, had also taken a 25% stake in the cable, making it majority-owned by African investors.

The group had already awarded a $10-million marine survey and engineering contract to American-based Tyco Telecommunications.

“East and South African user demand for international bandwidth, whether for business, institution or individual use, has greatly surpassed the existing supply,” Herakles Telecom vice president Brian Herlihy said in the statement by Tyco. “Seacom, as an international submarine cable system, will provide significant supply at affordable prices.”

According to Business Day, New York-based Herakles Telecom is a development group that has invested some $4-billion in Africa, and owns 25% of the cable.

South Africa’s second national operator, Neotel, is not part of the cable-building consortium, but owns the landing rights as part of its licence and will contribute R20-million toward the project, with funds going toward the cable landing station and all related facilities within South African territory.

‘Cable a success story’
“We are particularly excited that the South African investors in Seacom have a 50% stake, making this [cable] one of the country’s success stories”, Neotel managing director Ajay Pandey said in a company statement.

Seacom will have a capacity of 1.28 terabits per second, which is approximately 10 times the current capacity of the SAT-3 cable which runs along Africa’s west coast and connects South Africa to Europe.

According to Neotel, the cable should be ready for service during 2009, placing South Africa in a much stronger position to support the 2010 Fifa World Cup, whose demand for international bandwidth, and in particular high definition television broadcasting, will be unprecedented.

In addition, Neotel states it will operate the local landing station and facilities on an open access basis, thus stimulating the country’s international bandwidth market.

“Neotel remains committed to a new era in the telecoms industry of South Africa where access to international bandwidth will not be as constrained.” Pandey said.

SAinfo reporter

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