This document is a subsection of Platforms
The EASSy Project: East African Submarine Cable System
The East African Submarine Cable System (EASSy)
project consists of the construction of approximately 10,000 km of fiber optic submarine cable along the East African coast, linking Sudan to South Africa, with additional landing points in Djibouti, Somalia, Kenya, Tanzania, Madagascar and Mozambique. The following is an analysis of the strengths, weaknesses, opportunities and threats inherent to the project.
- General Information
The EASSy Project responds to a need
The EASSy project offers a solution to infrastructural Internet access problems in Eastern Africa. It responds to a critical need for an effective and affordable Internet connection in a large region of Africa. The EASSy project intervenes in a sub-developed market. There are few direct high-capacity Internet links between and within African countries, and high-capacity transmission lines are mainly concentrated in the US, Europe and Asia. As a result, about 75% of Internet traffic in Africa first goes through Europe or the US, and is then routed back, a very costly process. For example, while Benin and Burkina Faso are neighbors, Internet traffic between them passes through France or Canada.
The International Development Research Centre (IDRC)
in Canada estimates that Africa spends at least $400 million each year on the use of international bandwidth for national or regional data. In fact, in many cases, e-mails sent between two Internet service providers in the same country are sent abroad and then rerouted back because domestic Internet Exchange Points (IXP)
are lacking. Africa is currently dependent on the SAT-3 cable,
and on expensive satellite links, the only option in some Eastern African countries. These satellite connections have inherent delays and do not offer competitive pricing conditions. The slow pace of Internet development on the continent is reflected in low levels of use.
Low-speed transmission lines also mean that Internet users in Africa find it much faster and cheaper to download material rather than to post their own onto the Internet. These conditions consign Africans to serve primarily as consumers instead of producers of web content. (See Africa Overview: ICT Trends)
• Extra connectivity would reduce Africa’s dependence on the SAT-3 cable and on expensive satellite links.
• EASSY would provide reliable, fast, and widespread access to international communication (including Internet). It is expected to bring the costs of international telecommunications and Internet connectivity down to competitive levels, similar to those found in other developing countries, such as India.
A dispute between governments and operators has been stalling EASSY’s implementation. Some African governments, including South Africa, want the consortium to be owned by a majority of African companies and to respect regulated, i.e. low, prices. They threaten EASSy’s operators that they will block the project if those conditions are not respected. On the other side, the operators argue that this is an attempt to hijack an existing commercial project and make it a part of the NEPAD ICT broadband Infrastructure Network, a states- led project benefiting from the UN support.
While governments claim that only a state project would serve the common good and prevent the risk of a consortium monopoly, the operators assert that their project, although necessary to Eastern Africa’s development, has been halted by the public sector. According to them, governments want to claim paternity for a crucial development project, although the private sector has responded to pressures from the World Bank and seems to respect its development criteria.
Meanwhile, consumers on Africa’s East Cost still pay up to 300$ a month for Internet access. Moshen Khalil, Director for the ICT department of the World Bank Group emphasizes following facts:
- The EASSy is already a truly African initiative ( most operators are African) ;
- Regulated prices were already imposed on operators as a condition for $30 million in loans by the World Bank. This was the first time the IFC has asked private companies to adopt developmental principles for financial support.
Accordingly, critics charge that the governments' position has undermined the EASSy project without justification.
Steady funding structure:
The sponsors of the project will comprise up to 28 telecommunication companies. These are predominantly well-established African carriers. There is an approximately equal mix of government-owned and private institutions.
The total project cost of the EASSy cable, estimated at $235 million, is to be financed by the SPV (West Indian Ocean Cable Company Ltd) and Consortium Operators.
Support from the World Bank:
An investment from the International Finance Corporation (or IFC, one of the World Bank's branches) will take the form of a loan of up to US$30 million.
Respect of developmental principles for financial support:
By conditioning its loan on a regulated price for Internet connections, the World Bank modified the financial behaviors of giant companies that could have imposed a price based on their monopoly on the market. This development may have positive effects on both EASSy’s financial value and its public image.
• Stalled negotiations between States and operators would discourage investments.
• The postponement of the EASSy project entails the risk of fiber-optic cable technology becoming obsolete with the emergence of new technologies, such as WIMAX.
Video:Unleashing Africa's potential, a video on the EASSy project by the World Bank.
, up date : http://mybroadband.co.za/news/Telecoms/1586.html
European Investment Bank : http://www.bei.org/projects/pipeline/2006/20060270.htm
UN : http://www.un.org/french/ecosocdev/geninfo/afrec/vol20no2/202-internet.html
Press release from Alcatel-Lucent : Press Release
The Economist : http://www.economist.com/business/displaystory.cfm?story_id=9621946&CFID=27629752&CFTOKEN=97476636
Map : http://www.cybergeography.org/atlas/cables.html