Navy story.indd - Mars Group Kenya Publications

economy
east africa
No Eassy rider
Kenya and South Africa are
in heated dispute over the
control and cost of a crucial African
development project – a fibre-optic
cable to surround the continent and
link it to the world by 2008.
One of its main components,
the East African Submarine System
(EASSy), would place 9,900
kilometres of fibre beneath the sea,
between Port Sudan in the north and
Mtunzini in South Africa; it would
link up with the SAT3 cable which
starts in Portugal and connects West,
Central and Southern Africa with
Madagascar, India and Malaysia.
The EASSy row embarrasses South
Africa, which is promoting the
project within the New Partnership
for Africa’s Economic Development
(NePAD), whose secretariat it hosts.
Other member states and investors
are frustrated by the resulting delay.
EASSy would reduce the price of access
to international broadband by 65 per
cent. The average price in Africa for 1
gigabyte per second (gbps) of data per
month is US$1,800, 90 times the price
in the United States.
‘The cost of routing traffic
internationally costs the continent
$400 million annually,
representing major capital flight
out of Africa’, says Eric Osiakwan,
Executive Secretary of the African
Internet Service Providers (ISPs)
Association. The main sticking
points are ‘open access’ and the
regulatory role of a government
structure that would own the
network. A protocol defining these
matters was agreed upon in Kigali
on 29 August, but of the 23 states
involved only Tanzania, Uganda,
Rwanda, Lesotho, Malawi,
Madagascar and South Africa
attended the signing.
Both the African Development
Bank and the World Bank want
the EASSy project to use the ‘open
access’ model which means that
service providers could get access
to the cable at cost – and sell its
services on to customers in the region.
The big foreign telecom companies
and their state counterparts in Africa
object because they would have to
surrender a substantial chunk of their
profitable business to much smaller
companies and civic organisations.
On 18 September, 31 telecom
companies threatened to pull out of
the project, saying the Kigali protocol
was unworkable and would ‘delay the
implementation of the EASSy cable
to the extent of it being abandoned’.
The Kenyan government had already
said it might quit the project in favour
of its own proposed undersea cable
link The East African Marine Systems
(TEAMS) between Mombasa and
Fujairah, United Arab Emirates.
The Permanent Secretary of
Kenya’s Ministry of Communications,
Bitange Ndemo, said Kenya would
not sign the protocol unless the
regulation issue is resolved. TEAMS
could be cheaper and faster than the
EASSy cable and start up next year.
Moreover, says Ndemo, ‘NePAD is
controlled via South Africa…first we
want the EASSy project to be out of
any governmental control and later
on we can talk about the open access
model.’
The head of NePAD’s East Africa
commission, Dr. Henry Chasia, is
Kenyan but questions his government’s
position: ‘It would be regrettable if
Kenya opted to go it alone and built
its own under-sea fibre optic cable
as this would weaken the EASSy
initiative’. Telkom SA, South Africa’s
main telecom company and one of the
project’s main backers, has also said
it may pull out because it might not
be able to make enough return on its
$10mn. investment. The government
in Pretoria, keen to avoid losing face
and needing plenty of bandwidth for
the 2010 World Cup, may have other
ideas. Industry sources say Telkom
may simply be trying to strong-arm
the government.
Others say the project’s flaws
include a lack of competition in who
can bid, the unclear extent to which the
project is controlled by governments
and layers of bureaucracy where
‘friends’ of member governments
might be placed. Another signing
ceremony is scheduled for 16
November in South Africa, but Kenya
will not attend unless its concerns
about over-regulation and Pretoria’s
monopolisation of the process are
addressed.
Its own undersea link would be an
insurance policy. Uganda will host
next year’s Commonwealth Heads
of Government Meeting; its private
telecom companies might jump ship
and join Kenya if TEAMS, built by
Kenya Data Networks, subcontracted
to Flag Telecom, arrives first with its
promised very low tariffs, at $150
per megabyte per second (mbps) per
month. EASSy’s backers are confident
that their scheme will be realised by
the end of 2008. But are the investors
still interested and will they remain
so when TEAMS comes on stream l
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