The South African government plans to build a new $700-million submarine cable around the west of Africa to boost broadband capacity and cut internet tariffs in the continent, it said on Tuesday.
South Africa’s state-owned telecom infrastructure company Infraco said it would split the cable into two parts with one linking South Africa to Brazil and one to London. It hoped the Brazil leg of the project would be ready by the end of 2009.
South Africa has only one cable linking it to the rest of the world and this has been controlled by former monopoly Telkom, whose exclusivity is due to run out in September.
Lack of capacity and competition means broadband costs around 10 times as much in South Africa as in Europe, so that few ordinary people can afford it.
The government, which controls Telkom, has repeatedly said high costs for phone calls and internet access are inflating the cost of doing business, deterring investors and impeding the roll-out of basic communications to the poor.
Infraco will also lease its network of cables between the country’s main cities to Neotel, a new fixed-line operator which is competing with Telkom. Neotel will only have to pay 35% of Telkom’s 2006 leasing fees to use the network.
”As Africans it is important to invest in a submarine cable to lower the cost of communications,” director general of the Department of Communications, Lyndall Shope-Mafole, told a news briefing.
The government said it was still investigating funding for the cable, which will cost about $700-million to build and will compete with the existing SAT-3 cable. It will be run at cost ”plus a little bit” to help lower the price of broadband access.
Private firms will probably help fund the cable and Telkom and other large telecom companies are thinking about buying a chunk of it, Department of Public Enterprises director general Portia Molefe said, adding the state would fund the rest.
All telecom operators will be able to use the cable, which would link up with a planned cable around the east of Africa being built by Africa’s homegrown economic recovery programme, Nepad.
That cable has been delayed for years by wrangling over shareholdings and access terms. Shope-Mafole threw fresh doubt on the project by saying on Tuesday private companies like Telkom, which initially backed the Nepad plan, were planning their own cable around East Africa.
Frustrated with the slow progress on a new submarine cable for Africa, Kenya said in May it would join a new project linking that country to Europe via Asia and has plans to lay a different cable to the United Arab Emirates. – Reuters