SAEx cable system advancing despite funding problems

Plans for the South Atlantic Express (SAEx) undersea cable system are advancing despite funding difficulties, as eFive Telecoms announces the grant of a supply contract to TE SubCom.

The cable system – which was first proposed by eFive in early 2011 – will link South Africa to Brazil, with the possibility of further extension to the United States, and will comprise two-fibre pairs amounting to a 16 Tb per second capacity.

The 9,990 kilometres of cable will stretch as far as Mtunzini, and will link East London, Port Elizabeth and Cape Town on its route to Fortaleza in Brazil. The system will also feature a spur to St Helena Island, and is likely to provide a link to Angola as well.

Today’s announcement that a supply contract has been awarded is the first sign of life from the project since funding issues were disclosed in January. The company added today that while funders could not yet be revealed, it expects the “financial close” to be announced in the first half of 2013.

Following the announcement of the project in 2011, things went quiet for the SAEx project, and in January of this year eFive’s new Chief Executive Officer Rosalind Thomas revealed that no financial backing had yet been secured for the project – estimated at a cost of R3 billion (US$346 million) to complete. Thomas disclosed that the company hoped “soon to make progress on that front”, adding that “finance discussions are well advanced”.

The company initially promised that the cable would be commissioned in early to mid-2013, however, with revelations as to delays in financing, it became clear that this original date was wildly optimistic. Thomas revealed: “The project is not going to be ready in 2013 due to delays experienced last year. Our target date is Q4 2014.”

Meanwhile, as plans have been delayed for the SAEx, a consortium of 14 telecoms operators, including Telkom, MTN, Vodacom, Neotel and Broadband Infraco, succeeded in launching a $650 million cable system in May of this year.

Known as the West Africa Cable System (WACS), the 17,200 kilometre cable system runs from Yzerfontain near Cape Town all the way along the west coast of Africa and terminates in the UK. The WACS became South Africa’s fourth fibre-optic submarine cable (the others being SAT-3/SAFE, SEACOM and EASSy).

The system raised South Africa’s international bandwidth capacity by 5.12 Tb per second and prompted involved parties to claim that no new cables needed to be laid as sufficient capacity had been achieved for South Africa with the launch of the WACS system in addition to the existing cables.

Speaking at the time, Telkom executive for global capacity Johan Meyer told BusinessTech: “From a Telkom perspective, I would say that our opinion is no [to a new cable]. We believe that WACS is exactly what we intended it to be and that is to future-proof the capacity requirements for at least the next decade.”

Executive manager for special projects at Broadband Infraco Vishen Maharaj added that the network capacity in South Africa had now been made “adequate”.

As such, speculation has been rife as to whether a fifth cable system is even necessary, given the delays and outlandish costs of the proposed SAEx system.

However, Vodacom’s executive for global capacity Kobus Stoeder was less inclined to extol the adequacy of WACS for the next decade, suggesting that a new cable system would do no harm. He noted: “The more diversity the better.”

There have been increasing criticisms of the broadband system in the country; the most recent of which being a report by Akamai entitled State of the Internet. The report provides global internet statistics, and this year highlighted a declining trend in South Africa’s broadband speeds, which saw a drop to 1.81 Mbps – a decline as compared to the country’s own previous speeds, but also significantly behind global average speeds of 2.6 Mbps.

Posted in: Telecoms

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