African cable project leaves some stranded - Company Business and Marketing

CommunicationsWeek International, April 16, 2001 by Reuben Muoka

Land-locked African nations have expressed concerns that they may not benefit from Africa ONE, the project to provide a 32,000 kilometer submarine fiber optic cable around the African continent. More than 36 African countries have indicated interest to participate as users in the $1.9-billion project being implemented by Africa ONE Ltd., now owned by Columbia Technologies of New Jersey, but analysts said the prospects of connecting the African hinterland and landlocked cities may be the greatest challenge to the company. "If Africa ONE can succeed in connecting [all of] Africa...Africa would have solved its bandwidth problems," said Jan Mutai, Secretary General of the African Telecommunications Union (ATU).

"The emphasis must shift from coastal cities to connecting the entire African continent in a seamless. bandwidth, landlocked cities inclusive", said Mutai. "Decades of routing traffic between African countries through America and Europe has led to a loss of huge revenues to African administrations," he said.

The countries that have shown key interest in Africa ONE are predominantly in coastal areas; for others, Africa ONE's usefulness remains unclear. "The picture still looks hazy at the moment," said an official of Zamtel, the Zambian telecommunications administration, who asked for anonymity. "There is still no tangible plan for the landlocked countries and we may well wait to see how the project progresses before thinking how to benefit," he said.

Africa ONE's management plays down these concerns. "Africa ONE...will, for the first time, link African nations to each other and to the global telecommunications infrastructure," said Glenda Jones, managing director, Africa ONE, East and Southern Africa. "Independent terrestrial cables, microwave and satellite facilities will provide direct links between coastal landing points and interior African countries," she said.

Nevertheless, the project has been dogged by delay. After a number of false starts--the seven year-old concept was originally proposed by AT&T--Africa ONE will begin installation by mid year.

Still hard to gauge the market

Promoters of Africa ONE blame delays on regulatory impediments, and they have been campaigning in several regions of the continent to solicit support for the project. "Five years ago, [the African telecoms market] did not look promising, and restrictive government regulations combined with state monopolies and high costs in the telecommunications sector served as barriers to investment," said Jones. She added that the African market was ripe for growth. "The International Telecommunication Union conservatively estimates that this sector will grow by 40 per cent over the next ten years," she said.

But others are not so sure. "Africa ONE has the advantage of connecting the entire Africa, but it may have the disadvantage of overrating the traffic that will emerge form the continent," said Titi OmoEttu of Lagos-based consultancy firm, Telecoms Answers Associates. "Forecasts alone cannot make reasonable business plans...in the face of competitive services like SAT3/WASC [Southern Africa/Western Africa Submarine Cable, the 15,000-km fiber optic cable linking Europe with Southern Africa and a number of countries on the Western Africa coastline]; and the slow rate of voice networks and Internet services," he said.

Africa ONE is one of the major projects being studied by some organs of ATU with a view to creating awareness of its potentials to the continent. "Africa needs to drive the efforts of these initiatives to see how they benefit continental objectives," said Mavis Ampali Sintim-Misa, chief executive of African Connection, a project coordinating arm of Am.

Africa ONE is being designed to have 26 landing points in coastal cities in Africa, the Middle East and Europe, from where it will join the worldwide network developed by Global Crossing Ltd., of Hamilton, Bermuda. With an initial capacity of 60 gigabits per second, the cable is being installed, managed and maintained by an African subsidiary of Global Crossing, while Lucent Technologies is supplying the equipment to build the network. After twelve years, ownership of the cable network will be transferred to purchasers of the capacity.