IMPORTANCE OF FIBEROPTIC LINKS

1
IMPORTANCE OF FIBER-OPTIC LINKS

• Eric Osiakwan
• Executive Secretary
• African ISP Association
• http//www.afrispa.org

2
AfrISPA?

• African Internet Service Providers Association
  incorporated in Mauritius in 2001 with focus of
  building African Internet Infrastructure
  
• Executive Management William Stucke Chairman,
  Eric Osiakwan - Executive Secretary, Brian Longwe
  - GM, Viv Padayatchy Treasurer, Didier Kasole
  Francophone Rep. and Kamal Patel - Director
• Current members are
• ISPA South Africa
• TESPOK Kenya
• UISPA Uganda
• GISPA Ghana
• ISPAN Nigeria
• FAIR Mauritius
• TISPA Tanzania
• BISPA Botswana
• AFIM Mali
• MISPA Malawi
• AFAIB Benin
• ISPA-DRC Democratic Republic of
  the Congo
  

3
Bandwidth cost in Africa is prohibitive

• Bandwidth demand rose by 19 in the 2001, 28 in
  2002 and 37 in 2003
  
• In the case of one of the poorest countries in
  Africa, its incumbent telco spends US3.2 million
  on satellite transmission, of which US2.4
  million is spent on routing calls within the
  country and the balance is spent on international
  calls.
• Global bandwidth average is between 10 and 12
  but a recent report by Balancing Act Africa
  predicts a 24 growth for the next 3 years to
  2008
• Against the backdrop of routing local traffic
  internationally costing the continent about 400
  million a year - this represents capital flight
  out of Africa
• Sources Balancing Act Africa -
  www.balancingact-africa.com, ITU - www.itu.int
  and Fibre for Africa - www.fibreforafrica.net

Source ATICS, 2004, World Bank, www.atics.info
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Closed Access SAT3

• After 6 years of deployment, SAT 3 has less than
  5 usage because
  
• closed club deal approach to building -
  incumbent PPTs on Monopoly
  
• in Cameroon an e1 cost USD32,000 whiles same
  cost 3500 in Ghana and Nigeria
  
• political ownership and protectionism - no
  volume business

http//www.balancingact-africa.com/news/back/balan
cing-act_317.html
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GLO-1 for West Africa

• Project by Globalcom, Second National Operator in
  Nigeria, connecting to the United Kingdom
  
• Globalcom is leading Mobile Operator with
  15million subscribers and 2billion international
  voice minutes annually
  
• GLO-1 scaled down due to lack of political
  co-operation for landing rights
  
• Alcatel Lucent cable ship left Nigeria for
  Senegal in January to complete cable
  
• Would be priced below SAT3
• Start with Nigeria and expand

6
The MaIN OnE Fiber

• Main Street Technologies is the sponsor of the
  MaIN OnE cable system serving the West Coast of
  Africa. MaIN OnE will interconnect countries on
  the Atlantic Coast Coast from Morocco through to
  Angola with each other, and through Portugal to
  the rest of the world, pricing independent of
  distance.
• MaIN OnE is an open access system to provide
  international and internet communications
  capacity via direct subscription to all operators
  who have wholesale capacity requirements.The
  system is currently under development and is
  targeted for commissioning in 2009.
• The submerged cable will have a capacity of 1.28
  terrabits and will connect the following 10
  countries Portugal.Morocco, Senegal, Cote
  d?Ivoire, Ghana, Nigeria (Lagos and Port
  Harcourt), Gabon, the DRC, Angola and South
  Africa.

7
Infinity Telecoms still in the game

• Unveiled at NEPAD E-Africa conference, 2005
• Infinity Worldwide Telecommunications Group of
  Companies (IWTGC) led by Nigerian Adedoyin
  Ademilola and American Robert Woog
  
• Branched network connecting Portugal, Cameroon,
  Nigeria, Benin, Liberia, Senegal, Cote d'lvoire
  and Ghana
  
• Cost 865mil - 750mil
• MOU with VSNL in May, 2007

8
TEAMS LTD for East Africa

• Point-to-point system connecting Mombasa, Kenya
  and Fujairah, UAE
  
• Proposed by Government of Kenya (GoK) in 2006,
  now through existing vehicle called TEAMS
  
• Ownership Govt. of Kenya (20) and UAE
  incumbent Etisalat (15), The remaining 65 is
  distributed among other private investors.
  
• Supply contract awarded to Alcatel-Lucent in
  October, 2007 82 million
  
• Cable capacity increased to 1.28Tbps
• Manufacturing of the cable has started because
  GOK issued both guarantee and first payment to
  Alcatel and cable expected in Mombasa in the
  first quarter of 2009.

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SEACOM for E.A and S.A

• Investors Herakles (backed by Blackstone) Aga
  Khan Fund for Economic Development (founded by
  Prince Karim Aga Khan IV of Pakistan) through
  IPS Venfin (led by South African Johann Rupert)
  Convergence Partners (led by former South African
  DoC DG Andile Ngcaba) Shanduka (led by South
  African Cyril Ramaphosa) Neotel has pledged ZAR
  20 million for cable station
• Cost650 million
• RFS 2009
• Financing arranged by Nedbank and Investec
• Supply contract signed with Tyco and cable
  expected in 2009
  

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UNEASY for EASSy so FAR

• Consortium of regional incumbent telecom
  operators
  
• Cost265 million
• RFS 2009
• Financing from Development Financial Institutions
  (DFIs) including World Bank/IFC, EIB, ADB, AFD,
  KfW
  
• Supply contract signed with Alcatel-Lucent
• Buildout started by Alcatel-Lucent who said it
  would be ready in first quarter 2010
  

11
BAHARICOM and 5P Holdings

• Massive network connecting most of Africa to
  Europe, South America, and Asia
  
• Target RFS 2009 or 2010
• Confirmed and rumored investors
• 5P Holdings (US company led by Mool Singhi)
• International Development Office of the
  government of Ras Al Khaimah (an emirate in the
  UAE)
  
• Pan-African Infrastructure Development Fund
  (PAIDF)
  
• Phelps Stokes Fund, an American 501 (c)(3)
  nonprofit
  
• Sheikh Saoud of Qatar (rumored)
• Initial NEPAD involvement in EASSy, then NBIN,
  then BAHARICOM
  
• NEPAD has promoted Kigali Protocol ideals for all
  network infrastructure now has seven
  ratifications so comes into force

12
WHERE IS THE FLAG?

• Reliance Group (India) purchased
  FLAG Telecom for 207 million in 2004
  
• In December of 2006 FLAG announced a 1.6-billion
  global buildout known as the Next Generation
  Network
  
• System-2 would connect India and Kenya, with a
  potential extension to South Africa and Reunion,
  and later Mozambique, Tanzania, Madagascar,
  Mayotte, and Mauritius
• RFS 2009 or 2010

13
THERE COMES INFRACO

• Broadband Infraco Pty 100-owned by SA govt.
• Proposed two-cable system Phase I South
  Africa-Brazil (RFS August 2009) and Phase II
  South Africa-UK (RFS May 2010)
  
• Cost 650 million
• August, 2007 VSNL (26 shareholder in Neotel)
  pledged 200 million to project
  
• Supply tender issued June 30, 2007
• At issue Infracos five-year exclusivity with
  Neotel ( 2012)
  
• Infraco and Baharicom are consolidating

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The African Loop - Fiber links
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WHO WOULD HAPPEN FIRST

• Glo-1 would be up this year so West Africa would
  have two cable which should make bandwidth cost
  lowest in the region. Infinity Telecom may come
  through faster??
• TEAMS and SEACOM have awarded supply contracts so
  should come on stream in 2009 and 2009
  
• Almost a dozen credible systems have been
  announced for a total proposed investment of 6.4
  billion
  
• Demand is robust in South Africa, Nigeria, Ghana
  and Kenya
  
• However, there is likely to be consolidation
  among proposed systems, and some projects will
  not succeed
  
• Near-term demand justifies two full-length
  systems on each coast

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AT WHAT PRICE?

• FLAG first announce 1M for 500 in 2006
• TEAMS announce same in 2007
• TEAMS announced in 2008 that 1M would be 80 for
  year 1
  
• SEACOM announce 1M for 1500 in 2007

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WHAT WOULD HAPPEN THEN?

• We would have true broadband in Africa at
  affordable prices which would drive the growth of
  content
  
• Banks would have more reliable fiber optics links
  within and without Africa
  
• Online banking and applications would grow
  exponentially in correlation with affordability
  of broadband
  
• Virtually banking would emerge and sophistication
  of banking technology would be eminent
  
• Mobile banking would grow exponentially with
  backend broadband
  

18

• Thank You!
• eric_at_afrispa.org