Uhurunet good to go

Johannesburg, 01 Apr 2008

The New Partnership for Africa's Development's (Nepad's) 45 000km Uhurunet undersea cable is officially under way.

The initiative had its first official inter-governmental assembly meeting in Sandton last week.

This inaugural meeting was held up as Nepad waited for seven of the 12 countries that signed the Kigali Protocol to ratify that commitment in their local jurisdictions. A quorum has now been reached and the protocol is in force.

The meeting saw outlines of Uhurunet's envisioned timeline and costs up to the 2010 proposed operational launch presented to government representatives, as well as companies invited to participate in the special purpose vehicle (SPV).

Baharicom arrives

Specialist consultant for Nepad Ed McKormack revealed a private company would be established to own, operate and manage the Uhurunet cable.

The company, which is to be named Baharicom, will have its shareholding made up of the Nepad SPV (30%), African ICT companies and investors (45%), and international operators (25%).

"Baharicom will be a neutral carriers' carrier, which is more efficient than the traditional consortium approach. For instance, we are aware that the Eassy and Seacom cables will serve parts of East Africa and SA, but we believe they will not be able to offer the reach or flexibility of Uhurunet. Pricing on an end-to-end basis on these cables may still be high for smaller units of capacity."

McKormack adds: "Uhurunet will be a loop encircling Africa that affords users a level of network resiliency unmatched by any competing system. The system will provide open access, competitively priced, wholesale international telecommunication services."

Budget issues

He also disclosed the proposed costs of the system up to the 2010 launch.

"Baharicom will need $1.4 billion (about R11.4 billion) to get the cable up and running. $787 million will be used on East and North Africa capital expenditure, $504 million on West Africa expenditure and $109 million for operating expenses. This budget still gives us some flexibility to redirect cash flows to new projects."

As for the timeline of the project, McKormack says an aggressive strategy has been created to meet the continent's high access needs.

This will see the common equity portion of Baharicom investment close on 18 April and the supply contract for the cable awarded later the same month. In June, Baharicom will issue preference shares and the "full supply contract" will be in force, says McKormack.

In the second quarter of 2010, the initial system will be ready for sale with the full system in operation by the end of that year. Baharicom has already started customer pre-sales activity.

"Now is the time for us to take this forward," says McKormack. "There is great need on this continent. In my mind, this can be the project of the decade."