East African submarine cable system (EASSY) special purpose vehicle (SPV) project
- Reference: P-Z1-GB0-008
- Approval date: 12/09/2007
- Start date: 09/06/2008
- Appraisal Date: 01/04/2007
- Status: OngoingOnGo
- Implementing Agency: WEST INDIAN OCEAN CABLE COMPANY WIOCC
- Location: MAURITIUS (EASTERN & SOUTHERN AFRICA)
The EASSy project is an initiative to construct and operate a submarine fibre-optic cable along the east coast of Africa to connect 20 coastal and land-locked countries to each other and to the rest of the world. The project, with an estimated cost of USD 235 million, will run cable from Port Sudan, Sudan, to Mtunzini, South Africa, covering about 9,000 km.
The EASSy project will provide the last link to completely encircle Africa with high-capacity optical fibre telecommunications networks . Currently the North African countries - Egypt, Tunisia, Algeria, and Morocco - are connected by one of the longest undersea fibre-optic cables: SEA-ME-WE-3 (South East Asia/Middle East/Western Europe-3). The SEA-ME-WE-3 includes 39 landing points in 33 countries and 4 continents from Western Europe (including Germany, UK, and France) to the Far East (including China, Japan, and Singapore) and to Australia. The SAT-3/WASC (South Africa Transatlantic/West Africa Submarine Cable) submarine cables includes 36 countries spanning a total of 28,000 km and connects countries such as Portugal, Spain (Canary Islands), Senegal, Ghana, Benin, C
The ultimate aim of the EASSy project is to reduce the cost of transporting telecommunications (voice and data) inside and outside the continent through terrestrial networks as opposed to satellite networks. At present, about 90% of intra-African voice and data traffic is routed through Europe and North America at a cost of about USD 600 million per year. If these savings were passed on, then the price of telephone and Internet access would drop significantly for both the telecom operators and for domestic and commercial end-users in the region. The EASSy project will provide direct links between all the involved African countries and will bring immense economic and social development benefits to the continent.. All high-capacity traffic that originates or terminates from the Eastern or Southern African region to other Global networks will be carried through EASSy. EASSy will act as a medium of internet connectivity carrying telecom traffic for all African operators from the Eastern and Southern African markets to onward connecting Cable networks in Europe, Asia and the Americas. It would also ensure that the entire East coast of Africa has the necessary fibre-optic infrastructure in place to meet the ever increasing Telecom traffic demands of these EASSy countries.
Although Africa represents 14% of the world's population, it currently has less than 3% of the world's telephone lines. Africa remains the world's least developed continent in telecommunications. The International Telecommunications Union (ITU) telecommunications indicators of 2005 show that while Africa recorded 3.2 main telephone lines per 100 inhabitants, the Americas recorded 33.9, Asia 15.8, Europe 40.9, and Oceania 42.4. The Eastern and Southern African sub regions, where EASSy aims to provide high-bandwidth connectivity, has a teledensity of around 3.1 main telephone lines per 100 people.
Mobile phones outnumber fixed lines in most African countries and constitute more than 80% of all African telephone subscribers. Demand for mobile lines is so high that in some countries the existing networks are struggling to cope. By 2010, Africa is expected to notch up some 200 million mobile subscribers. However, Internet usage in Africa is very low at 1.4 % when compared to usage rates for the World at 11.6%. It should be noted that Internet usage in most of Africa is currently concentrated in the bigger cities.
Overall estimated Internet market penetration in Africa is still very low due to limited fixed-line infrastructures and the high cost of Internet service. Nevertheless, several African countries experienced triple-digit growth rates in Internet usage in 2003 and 2004. It should also be pointed out that regulations in most African countries do not allow Internet Service Providers (ISPs) to obtain their own international bandwidth.
Countries in Eastern and Southern Africa currently rely almost exclusively on satellite based telecommunications capacity to manage their long distance and regional telecommunications. While countries on Africa's Southern, Western and Northern coastlines are linked to existing fibre-optic cables, countries on Africa's Eastern seaboard and its hinterland are not able to connect directly to international fibre-optical cable networks. This poses serious challenges to the flow of information to, from and between affected countries, and the global market at large, with attendant economic, developmental and social challenges. The low rates of IT investments witnessed in Africa are recognized as a serious impediment to the expansion of telecommunications and to bridging the digital divide.
Various broadband initiatives have been launched and the number of African countries offering commercial ADSL services is continuing to rise. The proliferation of new wireless technologies, including 3G and 2.5 G mobile technologies, is expected to bring the Internet to broad masses in Africa for the first time. The first 3G mobile systems were launched in Africa as early as March 2003, and several mobile operators have already established themselves as ISPs.
The liberalization of Voice over Internet Protocol (VoIP) telephony in several African countries has had a significant impact on their markets and is resulting in a ripple effect across the continent. This is triggering a much needed reduction of the traditionally high telecommunication costs in Africa. (See Annex 3 for a breakdown of fixed, mobile, Internet and ADSL usage in EASSy countries.)
The DFS and Market and Traffic Study undertaken by both AXIOM, EGS, and Terabit has concluded that demand for bandwidth in the Eastern and Southern African region will grow dramatically over the next decade. This will be driven principally by the increase in Internet traffic, e-business services and applications, broadband-reliant access technologies, globalization, and aggressive government telecommunications policies aimed at increasing teledensity levels..
It has long been recognised that ICTs and telecommunication backbone structures play a pivotal role in accelerating regional and national socioeconomic development, regional integration and trade, wealth creation, employment generation, and poverty reduction. This has spawned the development of various national and regional ICT infrastructure initiatives, such as the EASSy project.
EASSy has similar attributes to the Rascom project, which was recently approved by the Board in the sense that it is a critical ICT infrastructure project that aims to foster regional integration in Africa. Both NEPAD projects are complementary and have the merits to fill the ICT infrastructure gap in Africa and while Rascom as a satellite is more focused on rural areas the EASSy project is most suited for high-bandwidth transmission necessary for Eastern countries to catch up the development of information technology with internet and mobile telephony. This project also brings together the public and private sectors, thereby providing a model for the future generation of PPPs that will be necessary to create the needed infrastructure for private sector development in Africa.
EASSy will provide major benefits to the following areas: - Create high-capacity, fibre-optic connectivity within Africa and to the rest of the world, thereby helping to reduce the digital divide. In addition, EASSy will spur terrestrial backbone links and improve cross-border connectivity. - Reduced unit costs (capital and operational) for global connectivity, leading to increased profits for operators and lower transaction costs for end-users. - Enhanced services for businesses - High-speed and cheaper connectivity will allow more companies to engage in e-commerce and explore new markets. It should also generate sustainable employment and facilitate new opportunities for both African and international companies and entrepreneurs. - The improved business climate will encourage FDI flows in addition to domestic investment. The creation of new businesses and jobs will spur economic growth and increase GDP. - Increasing government revenue through substantial growth in telecom sector with potential for significant forward and backward linkages in enhanced tax revenues and the creation of jobs. - Governments will benefit from reduced costs to third-party foreign satellite providers, thereby saving foreign exchange. - Digital technology will boost socioeconomic development, in line with the MDGs, making it easier and cheaper for social services to be rolled out across the regions through the use of applications such as telemedicine, distance education, and access to the World Wide Web. - The EASSy project will foster regional integration, in line with NEPAD and the AfDB's strategic objectives. In addition, the EASSy project will help in breaking the barriers of social and geographical isolation and assist the population in its quest to access information and continued education.
JABBA Rafael Jose - OPSD4