IHS Global Insight Perspective | |
Significance | The alliance comes shortly after the SEACOM submarine cable, running from South Africa to Europe and India via Mozambique, Madagascar, Tanzania, Kenya and Djibouti, entered service on 23 July 2009. |
Implications | SEACOM's purchase of six STM-64 circuits (60 Gbps) on Altech's East African terrestrial backhaul network gives an indication of the size of the short-term demands that it expects from the region. |
Outlook | Even though KDN, a subsidiary of Altech, also owns capacity on the TEAMS submarine cable (due to enter service shortly), the acquisition of bulk capacity on the SEACOM cable will allow the operator to have a fully redundant international fibre network. |
Under the agreement, South African conglomerate Altech will procure two STM-16 circuits on the SEACOM submarine cable (equivalent to 5 Gbps), with the option to upgrade over time to double this capacity to an STM-64 circuit (10 Gbps). SEACOM will in turn purchase six STM-64 circuits (60 Gbps) on the terrestrial backbone network owned by Kenya Data Networks (KDN), a subsidiary of Altech. KDN is a "carrier of carriers" telecommunications operator with 6,000 kilometres of fibre and microwave infrastructure throughout East Africa, providing long-haul connectivity to Kenyan cities and into the neighbouring countries of Uganda and Rwanda.
Altech Stream East Africa—a unit of Altech comprising KDN, Infocom Uganda and Altech Stream Rwanda—announced in July 2009 that it had completed a 1,500-kilometre fibre-optic cable from Mombasa via Nairobi (Kenya) to Kampala (Uganda). In Kenya, KDN has built and owns a fibre network from Mombasa via Nairobi to the Ugandan border; in Uganda, Infocom Uganda leases capacity from the Uganda Electricity Transmission Company Ltd (UETCL) from the border to Kampala (see Uganda: 25 August 2009: UETCL Leases Fibre Capacity to Infocom Uganda). Altech Stream Rwanda completed a microwave link running from Kigali (the capital) to Uganda at the start of the month and has now started accessing international bandwidth from the SEACOM cable (see Rwanda: 1 September 2009: Altech Stream East Africa Completes Microwave Link from Rwanda to Uganda). Altech Stream Rwanda is currently deploying a 400-kilometre fibre-optic link from Kigali to Uganda via the border post at Gatuna, which will take three months to deploy, at which point the microwave link will serve as back-up. Altech also plans to expand this regional network into Tanzania and the Democratic Republic of Congo (DRCongo).
"The African market for international bandwidth is expected to swell to 800 Gbps from today's 10 Gbps, with a significant portion of this new demand coming from East Africa. Today, Altech and SEACOM have taken a giant step towards unlocking this enormous potential in East Africa. The success of SEACOM would not be possible without infrastructure which links our beach landing stations to metropolitan PoPs. KDN's extensive inland infrastructure in East Africa will link our landing station in Mombasa to Nairobi, on to Kampala and Kigali," said Brian Herlihy, SEACOM’s chief executive officer (CEO), in a company press release.
Outlook and Implications
This contract demonstrates that operators are buying capacity on more than one submarine cable. KDN also owns an 8.5% stake in the East Africa Marine System (TEAMS) submarine cable, which is now undergoing testing and is due to be ready for commercial service during the third quarter of 2009 (see Kenya: 24 August 2009: Kenya Data Networks Acquires 8.5% Stake in TEAMS for US$11 mil.). The initial acquisition of 5-Gbps capacity on the SEACOM cable will enable KDN to have a redundant international fibre network; if there is a cut on one submarine cable, then traffic can be re-routed onto the other. Two further cables will also land at Mombasa in the next nine months in which regional operators also own capacity: France Telecom's Lion cable in the fourth quarter of 2009 and the EASSy cable in June 2010.
Through concurrent deals, Uganda Telecom Ltd (UTL) and RwandaTel have also purchased a ''significant amount'' of international capacity from SEACOM, according to a company press release, while SEACOM has in turn secured a backhaul solution for Rwanda on the two operators’ terrestrial networks between Kampala and Kigali (see Sub-Saharan Africa: 26 August 2009: Uganda Telecom and RwandaTel Purchase Capacity on SEACOM Submarine Cable). Under the terms of the agreement, both UTL and RwandaTel will have immediate access to the SEACOM network. Uganda has physically had access to the SEACOM cable since it entered service on 23 July 2009; Rwanda will have access to the capacity from September once a cross-border network has been completed (see Uganda: 27 July 2009: Uganda Connected to 17,000-km Subsea Fibre Cable from SEACOM). According to the Daily Nation newspaper, UTL and RwandaTel have purchased 620 Mbps (equivalent to 1 x STM-4 circuit) of capacity on the SEACOM cable and have also secured a fibre link from Mombasa through Kenya to Kampala and Kigali. Both UTL and RwandaTel have fibre-optic backbones: UTL has a fibre-optic link from the border with Kenya to Kampala, and RwandaTel's CEO, Patrick Kariningufu, said that it plans to complete a connection to UTL by the end of August 2009.