Some much needed good news for ecommerce business owners and online consumers:

Organisers behind a submarine cable that could slash Africa's internet costs believe the project will be finished by the end of 2007 despite stakeholder squabbling and a threat by powerful Kenya to go it alone.
John Paul Bagiire, a member of the project management committee for the plan to link East Africa to the rest of the world, said tenders had been issued and construction would start in the third quarter of this year.

The Kenyan government, frustrated by delays and arguments over who would have access to the cable at what price, said this month it would build its own cable, sparking anger from private operators who say it could scupper existing plans.

Threat a "bargaining ploy"

Bagiire, who is head of strategy at MTN Uganda, said he believed the threat was a bargaining ploy and that Kenya would not press ahead with its own cable.

"We should be completed by the end of 2007 and operational in the first half of 2008," he told Reuters.

But a representative from the World Bank, which has agreed to help fund the project once operators and governments agree on an acceptable business model, said she believed the Kenyan plans were a "credible threat" to the project known as EASSy.

She said the bank would be willing to fund the East African nation's plans if it seemed more likely to succeed in cutting sky-high African internet costs.

"The World Bank wants to achieve international bandwidth in Africa at competitive prices. The EASSy project was the way to achieve that but yes we ... would support an alternative if that appeared more likely to succeed," Eme Essien, senior investment officer at the World Bank's International Finance Corporation, told Reuters.

Internet traffic in most African countries travels over slow and expensive satellite connections, and an undersea cable could cut costs from some $15 000 per megabyte to as little as $500 over 5 years, Essien said.

Impeding investment

Pricey and often poor internet connection is impeding investment in the world's poorest continent, particularly in countries like Kenya which are keen to expand their call centre industry.

Many cellphone operators worry EASSy will follow the model on which the SAT-3 cable around West Africa was built, whereby a small club of companies like South African fixed-line operator Telkom charge other operators high fees to use it.

Essien questioned whether members of the EASSy consortium would come up with enough cash and was sceptical over whether the EASSy cable would meet its deadlines.

"Commitments are very different from money," she said.

http://www.fin24.co.za/