Tuesday, January 19, 2010

Global firms vie to provide Ethiopia with Global fiber optic links

Ethiopia has become a market for owners of high bandwidth fibre optic cable systems; at least four foreign companies are aiming to get all or a slice of this vast potential market, reliable sources disclosed.

A team of three people from SEACOM, the latest visitors in town, arrived last week. They were here to persuade senior officials in the telecom sector that Ethiopia should connect its domestic networks of fibre optics (believed to have surpassed 10,000km) through Djibouti to an undersea cable system they have brought to the shores of the Red Sea, also known as a cable landing point.

Other western companies eyeing Ethiopia as a potential market are SEMEW 3, with cable from Southeast Asia to Europe; TEAM, from Kenya to Dubai; and the Eastern Africa Submarine Cable System (EASSy), with landing points in six countries, from Mtunzini in South Africa to Port Sudan, (9,900km), these sources disclosed.

If Ethiopia leases from EASSy, it will be one of the five landlocked countries in the Eastern and Southern Africa to be connected with marine fibre optic cable, which is cheaper and much faster than other options.

Landlocked countries such as Ethiopia, who have to depend on neighboring countries with an outlet to the sea, are called backhaul. They have to choose a landing point that offers the highest bandwidth and cheaper prices, according to experts in the area.

Ethiopia's lease of marine fibre optic cable from at least three neighbouring countries would dramatically change the way people communicate through data, audio and video. The state owned telecom monopoly, the Ethiopian Telecommunications Corporation (ETC), has been providing data and voice services largely connected via a very expensive and slow satellite connection, operated by Hughes International. There is also a low capacity bandwidth connected via Port Sudan.

Not only has this arrangement made the lease of bandwidth very expensive, but also limited the capacity at 895kB per second.

"This will be expounded by thousands of [units of] bandwidth at a cost that will be a thousand times cheaper," an industry analyst, with profound knowledge of the telecom sector, told Fortune.

Ethiopia has multiple choices, according to this analyst.

It could connect to any of the cables owned by the contending companies, either through Port Sudan, Djibouti, Somalia or Kenya. And it has a far larger population than any of these countries, thus offering ETC managers the leverage to negotiate better deals.

"Indeed, we are negotiating," Amare Amsalu, chief executive officer (CEO) of ETC, told Fortune. "But it is too early to comment on the direction of the negotiations."

However, the most potent contender so far is SEACOM, with its landing point already installed in Djibouti, reliable sources disclosed. SEACOM is a privately funded venture which sells international capacity to global networks via India and Europe after it launched operations in July 2009. It is the first company to offer broadband services to countries in East Africa.

South Africa, Madagascar, Mozambique, Tanzania, and Kenya are interconnected via a protected ring structure on the continent. A second express fibre optic cable pair connects South Africa to Kenya. These two pairs have a combined designed capacity of 1.28TB (terabytes) per second, of which 100GB per second is currently active, the company claims on its website.

Source: Addis Fortune, Tamrat G. Giorgis

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