Information and communication technology (ICT) group Altech and undersea fibre-optic cable operator Seacom have announced a strategic alliance whereby Altech acquires 5 Gb/s of bandwidth capacity from Seacom, and Seacom, in turn, buys bandwidth capacity on Altech subsidiary Kenya Data Network’s (KDN’s) terrestrial fibre backbone in East Africa.
Seacom CEO Brian Herlihy explains that Seacom brings the bandwidth to the beach, but needs a partner with significant inland fibre networks to take the bandwidth beyond the shoreline, where it is needed. “This partnership has given us a solution to get to the cities where the people are,” he adds.
“You can have the best undersea cable in the world, but if you don’t have an inland terrestrial fibre network, you don’t get the benefits and bandwidth speeds that you want,” emphasises Altech CEO Craig Venter.
Venter adds that East Africa has proven to be an exceptionally high growth area for the company, and, in the next two or three years, he expects the KDN footprint to contribute some 45% to the Altech group’s earnings.
KDN has laid over 6 000 km of terrestrial fibre in East Africa and is currently still laying fibre at a rate of about 10 km a day. It is the largest data network infrastructure player in the region, and the network will link Kenya, Uganda, Rwanda, Tanzania and the eastern Democratic Republic of Congo, where the company recently finalised its operating licence.
The Seacom switch-on has triggered exponential data growth in the East African region, and Herlihy says that a 200% increase in data use was experienced in the first week of the cable going live.
He adds that 3G users in Kenya are now experiencing download speeds fives times faster than when the region relied on expensive satellite technology to transfer information.
Venter highlights that it is eight to ten times cheaper for KDN to link to the undersea cable than to use satellite technology.
He adds that he expects KDN to save some $6-million this year, as a result of connecting to the undersea cable.
Herlihy notes that, since the switch-on date of the cable, Seacom has activated another 35 Gb/s of capacity in the East Africa region. In comparison, only about 20 Gb/s of capacity in total has been procured by companies in South Africa.
Herlihy further states that East Africa is using ICT “as a must for business productivity”, and it is key to everything that the government has been planning in the region. “Government has made it very easy for ICTs to do business,” he adds.
He says that uptake has been “slower than we would like” in South Africa. “I strongly feel that the footprint is in place technically,” he argues, and says that ICT companies should drive demand among consumers.
The agreement also gives Altech a future opportunity to exploit its electronic communications network service (I-ECNS) licence here in South Africa, which it “fought” to get from the government and the regulator – although no announcement has been made in this regard.
The awarding of the licences came after the company began a regulatory challenge in 2008, and in August of the same year, the Pretoria High Court ruled in the company’s favour to the entitlement of having its existing Value Added Network Service licence converted into an I-ECNS licence, enabling the group’s telecommunications subsidiary to develop and operate its own telecommunications network.
The then Minister of Communications, Ivy Matsepe-Casaburri, applied for leave to appeal the decision but, on October 31, the High Court refused the application with cost. The Minister then lodged an urgent court interdict to halt issuance of the licence by the regulator, which was also overturned by the High Court. At this time, the perpetual dispute was concluded, and companies with licences gained the right to self-provide networks.
Venter states that it is “refreshingly good” to do business in East Africa, as the market has liberalised a lot more quickly than in South Africa, owing to the different regulatory environment.
“We need to do whatever we can to speed up the processes and get things happening,” Venter says, noting that the regulator is yet to allocate spectrum to licensees, which is vital frequency space for wireless technologies.
“Yes, we are going to use our licence,” says Venter, but adds that, as the process is taking time, the company is losing out on opportunities, and will not look at building a national or a WiMax network.
He says the company sees potential opportunities in gated communities and corporate office parks in South Africa, which would likely be undertaken under the company’s newly acquired subsidiary, Technology Concepts.
Of the capacity that Altech has acquired from both of the undersea cables, Venter esti-mates about 80% to 90% of that will be used in East Africa, while only some 10% will be used in South Africa.
Through the agreement, Altech has procured two STM-16s from Seacom, which equates to 5 Gb/s, with the opportunity to upgrade, within three years, and double this capacity to an STM-64, or 10 Gb/s.
KDN will use a portion of the bandwidth for its own operations, and the remainder will be sold on to customers. Venter says that the company has had success in signing up some major companies in East Africa as clients.
Seacom has bought six STM-64s throughout the East Africa region on KDN’s networks.
“The African market for international bandwidth is expected to swell to 800 Gb/s, from today’s 10 Gb/s, with a significant portion of this new demand coming from East Africa,” explains Herlihy.
By: Leandi Cameron
