Rascom Telecommunication Satellite


Overview

  • Reference: P-Z1-GC0-001
  • Approval date: 24/07/2007
  • Start date: 16/06/2009
  • Appraisal Date: 01/06/2007
  • Status: OngoingOnGo
  • Implementing Agency: RASCOMSTAR - QAF (RSQ)
  • Location: 50 African countries

Description

The RASCOM project will construct and operate an earth-orbiting satellite system to provide point to multi-point telecommunications services throughout Africa. The satellite system is designed to offer three primary service types. The Integrated Communications Service (ICS) provides two of these services: the Rural Telephony Service (TES) and the Thin Route Trunking Service (TRS). The third Service is the Bandwidth Lease Service (BLS).

The Rascom project was approved by the Board in July 2007 and the loan agreement was signed on December 17, 2007.


Objectives

The Rascom project aims to provide the following 3 main products to the African continent:

(1) Rural TElephony Services(TES):this product will provide Rural telephony by allowing African telecom operators to expand their coverage over hard-to-reach rural areas;

(2)Thin Route connectivity-on-demand Services(TRS):this product will provide inter-connectivity between one African country and the other;

(3)Bandwidth Lease Services(BLS):This service aims to provide television, radio and broadcasting services to the entire continent.


Rationale

Africa remains the world's least developed continent in telecommunications. Although Africa represents 13% of the world's population, it accounts for only 2.2% of the world's phone lines - 80% of which are in 7 countries (Algeria, Morocco, Tunisia, Lybia, Egypt, Sudan, and the Republic of South Africa). 45% sub-Saharan countries account for the remaining 20% with an average main lines tele-density of about 0.08 compared with more than 5.0 in OECD countries. Moreover, rural telephony is on average 12 times lower than urban tele-density and the satellite and microwave links that are used to connect to overseas destinations are much better than connections between African countries. About 90% of intra-African traffic is routed through Europe and North america at an estimated cost to African consumers of about $400 million per year.

The fact that close to 80% of the african population live in rural areas where only 20% of lines are installed illustrates the poor condition of communication services for the majority of Africans.

In this context, the project will

(i) provide full range of telecommunications services to end users,

(ii) complete coverage of Africa (urban and rural)including remote and isolate locations

(iii) enable international long distance telephone calls and internet connections at low cost,

(iv) create direct links among all African countries,

(v) allow interurban communications within each country

(vi) permit radio, television, and multimedia broadcast reception in each country as well as exchange of TV and radio programs betweeen African countries, and (vii) support limited intercontinental connectivity.


Benefits

As a Pan-African project, RASCOM will provide numerous benefits to the continent. The project will radically improve intra-African connectivity with significant reduction in costs for both public and private operators, lower tariffs for end-users, and lower outflow of hard currency from the continent. Rural end-users are expected to benefit from an estimated consumer surplus of US$ 1,203.6 million in present value terms, equivalent to an average of about US$ 210 million per annum. Present value of reduction in telecommunication cost for PSTN end-users is estimated to be US$ 440.6 million, equivalent to an average of about US$ 75 million per annum. BLS service subscribers are expected to benefit from an estimated consumer surplus of US$ 46.9 million in present value terms, equivalent to an average of about US$ 6 million per annum. RASCOM is also expected to result in a net fiscal impact on member countries of about US$ 2 million per annum. According to the project's detailed economic analysis, the base case scenario shows that the project will yield a huge economic benefit estimated at a net present value of US$ 1.9 billion.


Key contacts

TRAORE Adama - OPSD4


Costs

Finance source Amount
ADBUSD 32,990,888
Co-financierUSD 217,739,860
DeltaUSD 852
TotalUSD 250,731,600