News Analysis: Africa's telecom operators, investors face dilemma

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News Analysis: Africa's telecom operators, investors face dilemma News Analysis: Africa's telecom operators, investors face dilemmaNews Analysis: Africa's telecom operators, investors face dilemma


3 September 2009

CAPE TOWN, South Africa, Sep 03, 2009 (Xinhua via COMTEX) -- By Rex Annan Telecom operators and investors in Africa face a dilemma, as to whether the expected level of demand is worth the huge capital investment into the submarine fibre optic cable currently available to the continent.

A total of seven undersea fibre optic cables, with an aggregate capacity of 10.94 terabytes (10,940 gigabytes), have landing stations along the entire coast line around Africa.

A panel of five telecom experts at the ongoing Telecom World Africa 2009 in Cape Town, South Africa, noted on Wednesday that even though the submarine fibre optic technology promised faster speed communication at affordable rates for Africans, there is a danger most of it will remain redundant due to low demand.

They each pointed out that the consumption of fibre optics technology was more in data and internet communication than in voice, saying that the high level of illiteracy, low access to computers, power supply bottlenecks and the inability of carriers to pay for fibre optics raised concerns about how much of fibre optics would be consumed on the continent.

Submarine fibre optic cables landing in Africa include SAT-3, 120 gigabytes, Main-one, 1.92 terabytes, Glo-one, 640 gigabytes, East African Submarine Cable System (EASSY), 1.3 terabytes, South Asia Telecom Cable (SEACOM), 1.2 terabytes, The Eastern African Marine Systems (TEAMS), 640 gigabytes, and the largest of them all, West Africa Cable System (WACS), 5.12 terabytes.

TEAMS, for instance, is being constructed at 82 million U.S.

dollars; EASSY, 235 million dollars; Main One, 240 million dollars, SEACOM, 600 million dollars, whiles WACS, SAT-3 and GLO1 are equally multi-million dollar projects.

On the West Coast of Africa, SAT-3 (14,000 km), WACS (14,000 km) and Main one (14,000 km) connect Europe to South Africa, stretching from Portugal, with several landing stations along the western coast of Africa down to the south; Glo1 (9,500 km) connects Britain to Nigeria, landing in Spain, Portugal, Morocco, Mauritania, Senegal and Ghana.

To the East of Africa there is EASSY, which connects South Africa to Sudan, with several landing stations along the eastern coast; SEACOM (15,000 km) connects France to India, with at least seven landing stations in Africa, from South Africa through the eastern coast to Egypt in the north.

TEAMS is 4,500 km long and links Kenya with the United Arab Emirates, with possible landing stations in Rwanda, southern Sudan, Ethiopia, Uganda, Tanzania and Burundi.

Price per megabyte per month of bandwidth (capacity) differs from one cable to the other; on SAT-3, for instance, a megabyte of capacity costs between 4,500 dollars and 12,000 dollars per month, 50 times higher than similar fibre optics capacity in the United States of America.

Meanwhile it is projected, for instance, that data costs, which now averaged between 5,000 dollars and 7,000 dollars per megabit of bandwidth on satellite, would be reduced drastically to 500 dollars per megabit on fibre optics, which would be more affordable in Africa.

Lucy Quist, Head of Operations of Millicom International Cellular, operators of Tigo, said there was need for operators to create demand for the use of fibre optics, saying that convergence technologies such voice over internet protocol (VOIP) and Value Added Service (VAS) on handsets were some of the ways demand could be created.

She also urged operators to collaborate with African governments to raise the level of literacy on the continent to empower a greater proportion of the African population to be able to use modern technology extensively.

Angus Hay, Chief Technical Officer (CTO) of Neotel, said even though convergence was a step in the right direction, consumption on mobile handsets would not make much impact, adding that the supply of affordable computers to a greater number of Africans was the way forward.

"African governments also have to consider licensing more carriers to buy more of the fibre optic and spread the technology further inland," he said.

Panellist also called for broadband internet connectivity across the length and breadth of African states to create the interest of African peoples in the internet.

Sarat Dutt Lallah, Chief Executive Officer of Mauritius Telecoms, urged African telecom operators to continue to focus on the basics; providing voice and SMS services to the majority of their customers, saying that there was no need for Africans to be carried away by modern telecommunications technology at this time.

"African telecom operators must continue to focus on the basics whiles we all make a gradual effort to bring along the 300 million illiterate people on the continent with the rest of us," he said.

Ernest Ndukwe, Director General of the Nigerian Communications Commission (NCC), said security was another challenge facing African countries with regard to the submarine fibre optic cables, adding that protection of the cable path from saboteurs needed to be given much consideration.

He said he was, however, confident that by the time all the submarine cables would go live in Africa, there would be use for them on the continent.

Currently, 50 percent of SAT-3, 40 gigabytes of TEAMS and only four percent of SEACOM have gone live; Glo-1 will go live later this year; Main-one is due in May 2010 and WACS is due in 2011.

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