East Africa upbeat as first submarine cable goes live

The landing in Mombasa last week by the first undersea cable in the region, Seacom, has excited the local telecom industry.

But no user agreement has so far been concluded between any Uganda operator and the cable owner, The EastAfrican has learnt.

The $700 million Seacom venture landed last month and started a testing phase.

The East African Marine System (Teams), another cable, could land by October this year.

The industry in East Africa bleeds billions in expensive satellite connectivity, estimated at $0.7 to $0.8 million per month for 300 megabits, says Uganda Telecom chief technical officer Gadhfi Mohamed.

As a result of relying on satellite, the end user absorbs this spike in form of high tariff rates.

Connecting to undersea cables will lead to significant reduction in the cost of bandwidth by 60 per cent, industry experts say.

It is understood that owners of the two submarine cables have approached telecom companies in Uganda to sign up players in order for them to buy capacity.

But no agreement on pricing and other user terms have been reached.

MTN’s chief executive officer Themba Khumalo said in a recent interview that discussions with cable owners were at advanced stages.

“We are discussing with a number of parties to ensure that we can also be part of the process of bringing cost effective bandwidth to Uganda. We shall be an active player and are ready to take advantage of this sudden explosion of bandwidth,” he said.

Details of the negotiations are a closely guarded secret. No company is willing to give an indication of the pricing suggested by Seacom or Teams.

“I won’t say too much in that respect. It is a highly competitive area and whatever I say can be overtaken by events,” Mr Khumalo said.

“It comes with a lot of challenges: we have to relocate our pricing, total solutions and quality aspects so that people can see the change such capacity can bring and the overall impact of connectivity on a landlocked country like Uganda,” he added.

Due to the high cost of satellite connection, the industry in Uganda and cable owners “agree in principle to connect” but user agreements present a number of complex issues.