Feb 4, 2006 (JOHANNESBURG) — A $200m undersea cable promising a massive improvement in the quality and cost of African telecommunications will go live only by the end of next year, or a year later than hoped.

According to the Johannesburg-based Business Day newspaper in its edition of 24 January, the Eastern Africa Submarine Cable System (EASSy) will run from Mtunzini in South Africa to Port Sudan, with landing points in six countries. It will connect to at least five landlocked countries, so they will no longer have to rely on expensive satellite systems to carry voice and data services.

The cable should lower the cost of international connectivity for many African operators and provide faster bandwidth than most African consumers can currently afford.

But the cable is already behind schedule, and will probably not be active until late 2007, a year later than hoped, project co-ordinator John Sihra said yesterday.

Delegates and operators including local backers Telkom and Sentech are in Johannesburg this week to discuss the 9900km-long fibre optic cable.

"Africa needs this baby to be born," said Sentech CEO Sebiletso Mokone-Matabane. The project could be a catalyst for development, as long as private-sector operators ensured that profits did not become an overriding goal, she said.

The project has been on the go since January 2003, when a handful of companies, including Telkom, funded by the World Bank and the Development Bank of Southern Africa, investigated its feasibility. The African Development Bank and various governments have pledged financial support.

Funding has yet to be fully thrashed out, and a financial institution should be hired next week to advise on ownership and funding structures. This adviser will also help determine usage fees, balancing affordability for operators that are not funding the project with a return on investment for those that are.

Last year, former CEO Sizwe Nxasana said Telkom would think twice about investing in EASSy if it was forced to reduce the fees it charged rival operators to use its bandwidth on Sat-3, a cable connecting Portugal to Johannesburg, in which Telkom owns a 13% stake.

The communications regulator is debating whether Sat-3 is an essential service, and whether it should force Telkom to cut its access fees.

If Telkom was forced to slash its fees and could not recoup its costs, it might withdraw from EASSy, Nxasana said. Yesterday Telkom said it was still considering the investment in the EASSy cable and had not made a final decision on the amount it planned to invest.

(Business Day)