Ramaphosa backs Seacom

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 07 Sept 2007

Cyril Ramaphosa`s Shanduka Group is one of the leading investors in the Seacom private venture that seeks to lay an undersea cable along the east African coast, sources say.

A Seacom spokesperson refuses to confirm or deny Ramaphosa`s involvement, but says: "Negotiations between us and various African governments are at an advanced stage and we will be making announcements in the near future."

"Part of the reason for the secrecy has to do with the commercial model, but also the fact there is continuing talk that Ramaphosa could be a presidential candidate, even though he has denied it," says a senior source closely involved in the Seacom and government debate.

The source also states that adding to the complication is the creation of government`s new state-owned enterprise Infraco, which plans to lay its own cables, one to Brazil and another to Europe, by 2010.

"There is some undersea cable race going on and it seems that it will not necessarily be won by the first to land, or the first to market, but, sadly, by the one with the most political clout," the source says.

Sort it out

The ownership of Seacom has been an issue for some time between it and government. Department of Communications director-general Lyndall Shope-Mafole insists ownership ultimately rests in the hands of "American" investors.

However, Seacom has stated the cable is 52% African owned, with the full split standing at 25% South African ownership, 27% by East African companies, and the final portion by US development group Herakles Telecoms.

Herakles Telecoms has the same management team employed by specialist private equity firm Sithe Capital that develops power-generation projects within the developing world. Sithe, in turn, is 80% owned by The Blackstone Group, the world`s largest private equity firm. However, Seacom denies The Blackstone Group has any direct interest in Seacom.

"Seacom is the only cable that is under construction and it is of national importance that the issue of its landing is sorted out sooner rather than later," says the source.

Big plans

Seacom proposes to build a 13 000km cable, stopping at all sea border countries and then continuing to Europe and possibly the Middle East. The cable will have a capacity of 1 280Gb, four times that being proposed for a rival project called Eassy (East African Submarine Cable System).

Primary contractor Tyco is currently surveying the Seacom route, and construction of the landing sites and cable is due to begin this month. Seacom plans to have its cable operational by the first quarter of 2009.

The communications department is championing the Nepad ICT Broadband Infrastructure Network, which will consist of sea and terrestrial networks. However, only 11 out of 23 countries have signed the governing protocol and four have had it ratified by their parliaments.

Seacom has signed a landing agreement with second national operator Neotel. They are offering academic network organisation, the Tertiary Education Network, tariffs that are 80% lower than Telkom`s current rates.