Backbone telecommunications infrastructure development initiatives in Southern and East Africa

Transcription

1 NEPAD e-africa Commission Backbone telecommunications infrastructure development initiatives in Southern and East Africa Final Report

2 Contents Introduction Background Recommendations and Conclusions Part 1: A review of existing and planned regional broadband networks and infrastructure 1.1 The key building-blocks of regional infrastructure 1.2 Key sub-regional routes analysed 1.3 Regional infrastructure projects 1.4 Cellular operators 1.5 Alternative infrastructure providers 1.6 The drivers of African traffic demand Part 2: An overview of gaps in current plans Part 3: Creating an integrated regional network Part 4: Implementing regional infrastructure ambitions the implications for obtaining finance Appendices A1. Summary of International Projec ts A2. National profiles A3. Details of Connectivity mapping process A4. International carrier licences

3 Introduction This study was commissioned by the NEPAD e-africa Commission in June 2004 with funding from the World Bank, to promote the integration and rationalization of Africa s terrestrial telecommunications infrastructure development, which is seen as vital to achieving cost-effective and reliable broadband networks across the continent. Using the results of this study, the e-africa Commission aims to establish a multistakeholder dialogue involving all relevant parties to discuss a joint plan for the necessary information and communications infrastructure. The e-africa Commission convened a conference at the end of July 2004 to review the status of all current telecommunications infrastructure initiatives within the Southern and East African sub-regions, and to plot the way forward with stakeholders. The study provided the background information for the meeting and was subsequently updated to take into account the discussions held and observations made during the meeting. Based on the overall objective, the brief for the study outlined six areas of interest: Existing and planned regional/sub-regional broadband backbone networks and infrastructure. Areas of duplication or the overlapping of plans for this type of infrastructure Areas where essential international links are missing. Alternative telecommunication infrastructure options. Options for a rationalised regional network grand plan. The funding required to achieving an integrated and rationalised regional network. Based on the outline above, the report has the following structure. Part 1: A review of existing and planned regional broadband networks and infrastructure This looks at the existing networks and the different plans to expand these networks. It examines the likely drivers of demand and looks at how these will affect the plans. Part 2: An overview of duplications and gaps in current plans This part brings together the range of different plans currently on the table and seeks to identify where there are gaps and duplications. It looks at the implications of these duplications and gaps for the larger projects being planned.

4 Part 3: Creating a regional network that refle cts the e-africa Commission s objective This part looks at how different plans might be amended to create a rationalised road-map for future development with clearly expressed priorities. Part 4: Implementing African infrastructure ambitions the implications of finding funding This part lays out the different types of funding available and the ways in which they are used and seeks to identify the implications of funding the sums required. There are a number of appendices at the back of this report w hich contain a considerable amount of supporting information for the conclusions reached. These include: a summary of international projects (A1.); a set of ICT country profiles (A2.); details of the processes used to produce the Connectivity maps used (A3.); and a table showing international carrier licences (A4.). Part of the data required for this study has already been gathered in the course of other projects, including the recent ITU NEPAD survey and the forthcoming DFID African infrastructure demand study. This information has been assembled and synthesised as part of the work of this study. It also incorporates and updates previous work on the African Connectivity model that was originally developed with support from UNECA. An important feature of this study is the data presented in a dynamic map software application. Much of the planning for networks can best be presented visually in GISbased map form. It is far easier to see gaps and duplications using network maps that also build in other key pieces of data. New underlying data can also be added or existing data changed, enabling a rich visual presentation of network options, which are the basis for the selection of maps included in this report. This system could also be hosted on the Internet via a Web site that could provide the same functionality as the PC-based application, allowing regular updates, which can also be downloaded. We would like to thank all those who gave freely of their time and ideas and hope that in the short time available justice has been done to them. Corrections additions and suggestions will be incorporated into the next version of the report. Please send these to the NEPAD e-commission project manager Brian Cheeseman - [email protected]

5 Background As part of its broader ICT development objectives for Africa, the e-africa Commission has identified the integration and rationalisation of terrestrial telecommunications infrastructure development projects as vital to achieving costeffective and reliable broadband ne tworks to interlink the continent. A variety of telecommunication development initiatives are now being planned in the Southern and East Africa sub-regions, which presents an ideal moment to examine how they might be refined and rationalized in order to maximize their potential to serve the region. Among the most important of these are: The initiative to establish a submarine optical fibre cable system along the East coast of Africa (EASSy). To build sufficient demand, EASSy will need to be accessible to inland land-locked countries via broadband links from the submarine landing points. The COMTEL Company comprising national telecom operators of the COMESA region and other investors, which envisages providing advanced voice and data services over regional telecommunications infrastructure and linking to upstream intercontinental bandwidth via South Africa and Egypt or Djibouti, and through the EASSY system when it is built. The SADC Regional Information Infrastructure (SRII), which a process undertaken by the NTOs in the SADC countries to build and upgrade their national infrastructure and cross-border telecommunication to ensure a robust, meshed broadband network linking the countries in the region. The East African Digital Transmission Project (EADTP), a similar project to SRII, aiming to connect Tanzania, Kenya and Uganda. The COM-7 project, which in its first phase aims to provide a link from Livingstone (Zambia) to Dar es Salaam (Tanzania), with a branch to Lubumbashi, using railway and power lines. A further link from Lusaka to Harare is still under evaluation. The Madagascar to SAT-3 submarine cable All of these projects are in different stages of development some are still in the conceptual stage, others are well advanced. At the same time, increasing numbers of non-telecommunications service infrastructure providers, such as electricity supply transmission grids, roads, pipeline and railroad operators, possess facilities which can be used to carry telecommunications infrastructure (in particular opt ical fibre cables). These have the potential be integrated into or complement those of the telecommunications service providers to reduce the investment costs required in setting up new infrastructure and to hasten the establishment of the regional network.

6 Recommendations & Conclusions The main sub-regional projects, namely, EASSy, Comtel, SRII and Com-7 have emerged from very different roots and clearly benefit from a co-ordination process to maximise their potential and reduce the cost of the overall ne twork implementation. For some of the international connectivity provided by EASSy and SRII means that similar Comtel links are no longer necessary, freeing up resources for other parts of the network upgrade. Similarly, many of the Comtel links envisaged will ensure the availability of backhaul routes for the landlocked countries to the EASSy network. At the same time, new alternative infrastructure options are emerging that will make the establishment of these intra and inter-continental networks less costly and more viable. However, while there is clearly a need for a regional approach to building the required network infrastructure, it is important to recognize that these large regional projects involve many different players with varying levels of development of their infrastructure and with widely varying national regulatory regimes this approach is of its nature a long-term strategy, as evidenced by the extended gestation times of these initiatives. While this process continues, and to lay the groundwork for their success, a near -term approach is also needed which focuses on financing the key fibre links as a series of individual cross-border connectivity projects to connect neighbouring countries. These projects would have the direct involvement of the stakeholders on each side of the border and thus could be developed and implemented quickly, allowing the larger regional projects to then knit together this infrastructure. This model is already being used by Sudatel in its joint company with Saudi Telecom on the SAS-1 intercontinental link, and is the model proposed by Kenya Telecom with the two operators in Uganda MTN and UTL. It is also the structure proposed in the case of the planned Madagascar submarine link to SAFE. In all these cases, a cross-border telecom infrastructure company, owned by the national operators and other investors, is established to build and operate the particular link. Through the coordination and information exchange role of the NEPAD e-africa Commission, projects such as these can now be planned with full knowledge of other initiatives and options for international/ intercontinental connectivity, and involve the regional network operators such as Comtel, EASSy or COM-7, which can ensure that appropriate capacity requirements are taken into consideration by participating in the investment. By priorising these projects according to the framework described below, the growth of international network connectivity could be achieved, which maximises the impact of each link in the mesh. Of necessity it will be necessary to focus on the links which provide the most immediate possibility of connection to the intercontinental backbones, and then later to add additional links to provide diversity where necessary. In parallel to the Comtel and EASSy detailed feasibility studies now being planned, a meeting of operators, donors and other potential investors will be convened by e- Africa Commission to discuss the list of cross-border connectivit y projects proposed, as outlined below.

7 Clearly this process, and the emergence of the regional operators, is defined by the telecommunication policy and regulatory environments adopted to foster these initiatives. These related policy and regulatory aspects are being addressed separately by the e-africa Commission. Priority cross-border projects Noting the availability of intercontinental gateways in the region (Angola, Djibouti, Egypt, South Africa and Sudan), projects can be prioritized to build outwards from these hubs. If these projects can be launched quickly, the initial investment requirements of the large regional projects will be significantly reduced. As will be noted, the scenario takes the view that if certa in key projects such as the Madagascar and Sudan/Ethiopia/Kenya links go ahead shortly, it may be possible to substantially reduce the scope of the other projects. In the same fashion, the level of infrastructure investment needed by Comtel will be able to be reduced or redeployed. If a more pessimistic view is taken on the time-scale and viability of some of the terrestrial projects, then it may be necessary to fall back to extend the projects needed and the number of links that Comtel and others need to finance will be increased.

8 Summary of Priority Links Needed Project LINKS LINK PLAN (S) OPTIONS / ACTIONS ROUTING 1 Ethiopia - Sudan 2 Ethiopia - Kenya 3 Sudan - Uganda 4 Djibouti - Eritrea 5 Nairobi - Mombasa 6 Kenya - Uganda 7 Tanzania - Zambia 8 Tanzania - Malawi 9 Tanzania - Rwanda - Burundi 10 Zambia - Namibia / Botswana 11 Zimbabwe - Zambia 12 Zimbabwe - Mozambique 13 Zimbabwe - Botswana Comtel Comtel e-africa Commission Backhaul - needed if Eritrea does not join EASSy cable project EASSy/Comtel link. a) Kenya Telecom, b) Kenya Pipeline Company EASSy/Comtel link, a) Kenya Telecom/MTN/UTL, b) Kenya Pipeline Company EASSy/Comtel link a) Com-7, b) SRII Comtel/EASSy link. a) SRII, b) Com-7 EASSy link Comtel link. a) Com -7, b) SRII Comtel link. SRII. a) Powertel, b) Tel*One end Sudatel has fibre close to border. MTN Uganda implementing fibre to border. Main need is to close gap across border. Fibre route needed from end to end Fibre route needed from end to end MTN Uganda has fibre to border. Need to establish fibre route from Nairobi to Kenya border Fibre route from end to end needed. Options are fibre along railway servitude, electricity power grid, oil pipeline Marsabit-Nairobi Juba - Kampala Djibouti -Aseb - Asmara Nairobi-Mombasa Sudatel has fibre close to Addis-Gondar -Al border. Main need is to establish Qadarif-Khartoum fibre route from Addis to Ethiopian border Fibre route needed from end to Addis-Moyale- Nairobi-Kisumu- Tororo-Kampala Lusaka-Kabwe- Kasama-Mbeya- Dodoma-Dar es Salaam Only fibre from the borders to Lusaka needed. Options are fibre along railway servitude & electricity power grid End to end fibre route needed. Option is power grid or railway servitude EASSy/Comtel link. SRII Fibre route needed from end to end. Options are fibre along power grid SRII Existing fibre routes up to both borders (BTC and Powertel). Small fibre interlink needed. Bujumbura-Kigali Namibia & Botswana borders to Livingstone - Lusaka Livingstone - Victoria Falls - Harare SRII fibre over power grid Mbeya-Mzuzu - Lilongwe Implement fibre part way Dodoma-Mwanzapossible along railway servitude Kibungo- Harare-Mutare- Chimoio-Beir a Gaberone- Francistown- Plumtree -Harare Lilongwe-Blantyre- Tete-Beira Lumumbashi-Inga 14 Mozambique EASSy link. SRII Fibre route needed from end to - Malawi end 15 DRC - Comtel link. Options are fibre along railway Angola Eskom/SAPP servitude, power grid 16 Uganda - Comtel link. Short fibre route across border Kampala - Kigali Rwanda 17 DRC - Comtel link. a) Eskom/ Fibre route from end to end Lumumbashi - Zambia SAPP/Zesco b) COM-7 needed. Options are fibre along Lusaka power grid or rail 18 Ethiopia - Ethiopia Telecom & Existing fibre route (complete) Addis Ababa - Djibouti Djibouti Telecom Djibouti

9 19 Namibia - South Africa 20 Namibia - Zambia 21 Botswana - Zambia Telecom Namibia & Telkom SA Telecom Namibia Botswana Telecom Existing fibre route (complete) Existing fibre route to Namibian border. see project 10 for Zambian side Fibre route to Botswana border being implemented. Windhoek - Cape Town Windhoek - Zambia border Francistown- Kasane- Livingstone 22 South Africa Lesotho Telkom SA/ LTC Short fibre route needed. Johannesburg- Maseru 23 South Africa Swaziland / a) Motraco, b) local operators Existing fibre link on Motraco. Johannesburg/ Mbabane/Maputo Mozambique 24 DRC - Angola a) Comtel b) Eskom Options are fibre along railway servitude, power grid Lubumbashi-Inga- Luanda Green = Complete Map of Priority Cross-border Links

10 To help develop a strategy for the roll-out of broadband backbones for the region, the following observations can be made: 1. Terrestrial infrastructure gaps between neighbouring countries or legacy analogue international links are still common in the region. The national microwave and fibre transmission networks of many operators are sub-optimally interconnected internationally. Many of the links built during the 1970s and 1980s under the Panaftel programme which form the primary link between the countries are still analogue and do not have sufficient capa city. In a number of cases the Panaftel links were never completed, have since fallen into disrepair or have been damaged or destroyed during conflicts. Panaftel was also affected by the twin trends of (i) the falling cost of satellite, with most countries building their own earth stations and establishing international links with Intelsat, and (ii) by the greater demand for transmission capacity (driven by increasing levels of voice traffic and new applications such as the Internet) than could be provided by the analogue links. 2. Upgrading to digital microwave and fibre links is starting to have an impact. A growing number of operators are deploying higher capacity digital microwave or fibre links with neighbours, either on a bilateral basis or through multilateral projects. International links are often an extension of national backbones when the infrastructure reaches the border (see National Backbone map below). South Africa, for example, now has a minimum of STM-4 (622 Mbps) links with Botswana, Lesotho, Namibia, Mozambique and Swaziland. Kenya is implementing a digital microwave link with Tanzania, and has proposed regional transmission projects in co-operation with Uganda and Rwanda. Sub-regional programmes within East Africa (EARPTO) and Southern Africa (SRII) are seeing the upgrading of these analogue links to digital ones and progress is advancing with most of the short and medium term projects having been completed. A few key gaps exist however, most notably in Zambia, Tanzania, Kenya, and of course the DRC. 3. There is still continued reliance on satellite connectivity. International voice and data traffic between neighbouring countries, and within or outside the region, which is not carried over these bilateral analogue or digital links, continues to be routed by satellite either directly, or transited via Europe or North America. In many cases, when capacity on the bilateral terrestrial links is saturated, or if those links fail, international traffic overflows onto satellite circuits. When these circuits or international switches reach capacity, and there are no licensed alternative international gateway operators onto which the traffic can overflow, these calls are not completed. This represents a loss of revenue for the operator, and could encourage that traffic to leak into the country by other means. Nevertheless, satellite will continue to be important for the medium-term in providing diversity through backup links for countries with initially only one fibre route to the intercontinental gateways. 4. Low intra-regional traffic. Until the Panaftel network was built, there was virtually no intra-african telecommunications capacity. Today, one result of low capacity analogue international links is a relatively low level of intra-regional

11 traffic, despite the high social and economic interdependencies between countries for trade, investment and flows of people. Compared against some 6.3bn minutes of total international traffic in 2001, intra-regional voice traffic accounted for 500m minutes in 2002 (although not directly comparable, this is in the order of some 7.5% - 10% of the total traffic levels). In addition, a total of some 79.4m minutes were transited through the US in Although it is not clear what proportion of this transit was for intra-african traffic, the level of transit charges paid to US carriers (US$20.4m) was greater than the level paid to terminate traffic on US networks (US$14.6m). Meanwhile, TeleGeography estimates that of 3,517.2 Mbps of total international Internet bandwidth in 2003, only some 1.2% (42 Mbps) was intra-regional. Given the now much greater numbers of mobile subscribers in the region, limited roaming facilities and high costs for international mobile calls are also having an increasingly negative impact on regional traffic. 5. Looming supply shortage of satellite bandwidth. With the entry into commercial service of Sat-3/WASC/SAFE in 2002, East and Central Africa is the only sub-region which does not have access to submarine fibre. All international capacity must therefore travel by terrestrial circuits or satellite. At the end of 2003 there were 28 C-band and 36 Ku-band satellites with coverage over Africa. Two further satellites were launched in 2004 (Eutelsat W3A and Intelsat 10-02), but except for RASCOM, there are no known plans to launch any more satellites. There is growing evidence that spare satellite capacity available over Africa is increasingly limited within the short to medium term. Unless new terrestrial projects are implemented, or new satellites are launched, a shortage of supply will become quickly become apparent within the next two to three years. 6. Increased alternative infrastructure providers. In addition to the terrestrial transmission networks of incumbent fixed-line operators, a number of other providers also own and operate telecom transmission networks for their own purposes. These include cellular operators, electricity operators, pipeline operators, road and railway operators. In one or two cases these organisations have obtained licences to provide wholesale services to other licensed operators, and in a few others they are leasing long-haul transmission capacity to telecom operators. In several key places where gaps exist in the regional network, this alternative infrastructure offers substantial capacity which is currently being unused. 7. Cellular operators are in a strong position. Cellular operators lease capacity on the backbone of incumbent operators where it is cost-effective but in many cases have had to construct their own transmission networks in order to backhaul traffic between base stations and switches. These networks use a combination of both microwave and satellite to reach more remote locations. In total cellular operators such as Celtel, MTN and Vodacom have invested in the region of over US$500m on the construction of these networks within the last five years. Cellular operators in most countries now have more extensive coverage than fixed-line incumbents, and a transmission network to reach these locations. Furthermore, a number of regional cellular operators are active in a number of countries with contiguous borders and are in a good position to provide international backbones across these countries.

12 8. Many electricity, railway and pipeline operators in the wings. By their nature, the networks of electricity, railway and pipeline operators pass through areas of highest residential and corporate demand. The infrastructure of these operators is often well established, and already has rights of way. In several cases, electricity transmission infrastructure can be more extensive than the transmission infrastructure of telecom operators. Furthermore, in each of these industries regional co-operation has facilitated the interconnection of networks and in the case of the Southern African Power Pool (SAPP) electricity generated in one country is sold to consumers in another and delivered over the power line network. For many such operators, telecommunications is not a core business function and leasing capacity to telecom operators allow s them to derive some additional revenue without the responsibility for delivery of services along the infrastructure, however, in most cases bandwidth, rather than dark fibre is supplied. 9. Many projects are aimed at enhancing regional connectivity. A number of national and regional fibre connectivity projects have been developed or are being proposed which aim to increase capacity between African networks in the south and east and to connect them to the global backbones. While some of these are only national projects, they could have regional impact if allowed to interconnect across borders. The most important of these are: 1. COM-7 (Tanzania, Zambia with connections to Namibia, Botswana, and Zimbabwe) 2. COMTEL (COMESA Countries) 3. EASSY (Kenya, Tanzania, Somalia, Madagascar, and possibly South Africa, Djibouti and Eritrea) 4. Kenya Pipeline Corporation (KPC) Mombasa/EASSY to Nairobi and possibly Uganda. 5. Madagascar submarine fibre link to SAT-3/SAFE and Mozambique 6. Motraco (South Africa, Swaziland to Mozambique) 7. Powertel (Zimbabwe, with potential links to South Africa, Botswana, Zambia) 8. SAS-1 (Sudan to Saudi Arabia and onto SEA-ME-WEA/FLAG) 9. SAT-3/SAFE (South Africa, Angola, Mauritius) 10. SRII (SADC Countries) 11. WAFS (West African Festoon System Namibia, Angola, Gabon, Congo, DRC) 12. ZESCO (Zambia) Of particular note is that there are now five intercontinental fibre gateways available to operators in the region via Angola and South Africa for SAT- 3/WASC SAT-2, via Djibouti for SEA-ME-WEA, and via Egypt and Sudan for SEA-ME-WE/FLAG/Falcon. Although both South Africa and Sudan have fibre to their borders, none of their neighboring operators have availed themselves of these options to move away from satellite for their international traffic. Competition in inter-continental fibr e will help to reduce prices, and it is important that the infrastructure issues south of the Sudan border and around Djibouti, which have so far limited access to SEA-ME-WEA/FLAG are addressed, as detailed below. For consolidating traffic across the south-east region, Djibouti, Sudan and Egypt are already fully connected to the

13 intercontinental grids, immediately able to offer shorter routes with more competitive pricing to the global backbones and more bandwidth than the 4-strand 120Gbps (Maximum) SAT-3/WASC fibre cable which runs along the west coast. 10. International voice traffic alone may not justify the cost of some of the new infrastructure. Cross-border international projects will need to consolidate and capture the national traffic along the route to maximize the economic viability of the project. This will also need to include promoting competitive markets in data traffic and the use of the network by ISPs for their own interconnects and the establishment of regional internet exchange points (IXs). 11. Universal service objectives can influence the design of backbone projects. Related to point 10 above, microwave and mobile towers or masts provide ready access for operators to local communities along trunk routes while fibre-only routes require more cost ly add-drop units to reach local communities. Aside from influencing the short term strategy for upgrading some of the existing microwave backbones, which may continue to be cost effective for many of the land locked countries until improved access to regional and submarine fibre becomes available, the additional costs of add-drop units need to be covered by government and the development community when fibre backbone projects are designed. Similarly, a festoon-based submarine cable system (in which landing sites are less than 200km apart) may be more appropriate for reaching the more population dense areas along the coast. As festoon systems are considerably less costly to install and maintain than marine amplified systems, this is also an advantage. 12. Strife can be a barrier to infrastructure roll-out in some parts of the region. Establishing certain key links such as through northern Uganda and Southern Sudan, or across the DRC, can be problematic due to the violence or political unrest taking place in these areas. 13. Significant levels of capital will be required to finance these plans. The integrated network map and outline provided below could make use of the eight proposed projects: EASSy, COMTEL, SRII, Com -7, Zesco, Motraco, Kenya Pipeline Company, Zesc o, Powertel, WAFS and the Madagascar link. Various other cross-border links would also need to be upgraded or established to maximise the resiliency and capacity of the network. A phased approach priorising some key links will have a significant impact on connectivity in many countries before the regional projects are finalised. Although the final estimates of costs for the projects will require further study, the projects identified below are likely to represent between US$ million in required project financing. Whilst the building of different sections of the network can be phased over a number of years, there is a clear need to immediately build or upgrade substantial elements of the network to kick-start the process. The project financing required is considerable and attracting private finance can be difficult because of current market conditions and sensitivity to political risk, but both of these can be affected by the behavior of Governments and the structure of the projects. Part of the solution may be to create special financing mechanisms through which the soft funds from donors and Governments of the participating countries

14 can help reduce the risk of the market opportunity and provide the political guarantees and transparent regulatory process environment to encourage the investment. Country By Country Analysis a) Ethiopia Ethiopia is a key gateway country for regional connectivity projects, as it provides the most viable route from Northern Africa and the Mediterranean to Eastern and Southern Africa, avoiding the turbulent areas of southern Sudan and northern Uganda. Ethiopia has two neighbours (Djibouti and Sudan) who have access to intercontinental fibre, and a good connection to Kenya would allow traffic from East Africa to use these links as well as to use Sudan s broadband link to Egypt that is now in place following resumption of diplomatic ties. The fibre link between Addis Ababa and Djibouti is under contract and will be in opera tion next year. Thus there are two key projects for Ethiopia to Sudan and to Kenya. Ethiopia -Sudan. Sudan has fibre from Khartoum to close to the Ethiopian border, a high capacity fibre link could be built by Sudatel and Ethiopia Telecommunication Corporation (ETC) on the existing Panaftel 34Mbps SDH microwave route Addis Abeba-Gonder- -Al Qadarif. Ethiopia -Kenya. This analogue Panaftel microwave link between ETC and Kenya Telecom still operates, but should be upgraded by fibre in order to carry the expected upstream traffic from the region and to allow Ethiopia an alternate intercontinental route via the planned EASSy landing point in Kenya. (Comtel link). Ethiopia -Djibouti. Djibouti is providing fibre to the border, ETC currently has Panaftel and higher capacity microwave connectivity into Djibouti. It is increasing capacity on this route through the implementation of an 800-km OC-48 terrestrial fiber link to Djibouti via Dire Dawa, which is designed for international interconnectivity into SEA-ME-WE3 and the planned EASSy cables. (Comtel link). Ethiopia -Somalia. ETC is implementing a 2 Mbps PDH microwave link between Jijiga and Hargeisa in Somalia, it is possible in the future that this could become a link project to provide redundancy to Mogadishu. Ethiopia -Eritrea. The upgrading of this link would allow Eritrea to gain access to Sudan s SAS-1 as an alternative route to SEA-ME-WEA in Djibouti, with which it already has a 155Mbps link, although not yet to the capital. As a result of this and the diplomatic difficulties between the two countries, this link is not in the list of top priorities. b) Sudan Sudan has a large well-developed fibre backbone to its borders, as well as upstream connectivity to the SEA-ME-WEA and FLAG/Falcon landing points in Jeddah, Saudi Arabia via its SAS-1 cable from Port Sudan and via its new link to Egypt and to these backbones in Alexandria. The SAS-1 link from Port Sudan to Jeddah has a substantial capacity of 1.28Terrabits per second, of which very little is currently used. Sudatel have a 50% ownership in the joint fibre cable operating company (with Saudi

15 Telecom), and are keen to provide bandwidth at competitive prices. Sudan is also now a planned EASSy landing country. Sudan-Ethiopia. See above. Sudatel could very quickly extend its existing fibre network to the border with Ethiopia and possibly it could undertake a joint venture with an Ethiopian consortium to extend fibre on the Ethiopian side to Addis Ababa. Sudan-Uganda. This is an important alternative route for east-central Africa, as well as for the traffic along the borders of these two countries, however, while the region s political status is unclear, MTN s national backbone in Uganda runs close to the Sudanese border and Sudatel continues to provide infrastructure in the South Sudan area which could quickly be upgraded to fibre. Eritrea-Sudan. Provides direct access to SAS-1 as an alternative to SEA-ME-WEA in Djibouti, as well as for traffic to Egypt. See Eritrea below for more details. (Comtel Link. ) Sudan-Egypt. Broadband connections on this route have now been established following improved relations with Egypt and the signing of the Four Seasons agreement. Sudan-Chad. A possible future route for cross-connect to the Sahel and the Chad oil pipeline fibre running to Douala. c) Djibouti Two intercontinental submarine links land in Djibouti - SEAMEWE II and SEAMEWE III. The proposed EASSy cable would also land at Djibouti. Djibouti has three neighbours: Eritrea, Ethiopia and Somaliland. Djibouti Eritrea. The two countries are already linked via Changa to Aseb in Eritrea through a 155 Mbps microwave link. A route still needs to be installed from Aseb to the capital Asmara, although this could also be a festoon system running up the coast from Masawa to Port Sudan. Djibouti-Ethiopia. See above, Djibouti Telecom and ETC will interlink their fibre networks next year. (Comtel Link.) Djibouti-Somalia. See Somalia below. d) Eritrea Eritrea has a small microwave network and needs to extend its infrastructure to each of its neighbours Sudan, Ethiopia and Djibouti. Eritrea Telecom expressed early interest in establishing a submarine cable landing station at Massawa, and was a strong supporter of the AfricaONE system. The operator is now working to join the EASSy system. An alternative fibre route could also be established via Sudan and Djibouti. Eritrea-Djibouti. See above. Eritrea Telecom wishes to install a minimum STM-1 (155 Mbps) domestic microwave backhaul link from Aseb towards Asmara (the capital), but currently does not have terrestrial infrastructure along this leg. This

16 project could be upgraded to a fibre backbone along with a link to the port of Masawa and in future a festoon system could link to Djibouti. Eritrea-Sudan. This link provides direct access to SAS-1 as an alternative to SEA- ME-WEA in Djibouti, as well as for traffic to Egypt. (Comtel link). Eritrea could obtain a secondary link to the intercontinental backbones via a festoon system running up the coast to Port Sudan. Alternatively this could be extended in project 4 above to also provide an improved link down the coast to Djibouti. Eritrea-Ethiopia. See above under Ethiopia. As a major route for Eritrean traffic to the rest of Africa it will become more important to secure this link instead of routing traffic back through Ethiopia via the Sudan or Djibouti links listed above. e) Kenya Kenya currently relies almost entirely on microwave for its long-distance transmission and a variety of routes require upgrades for the country to play its important role in acting as a hub for transit traffic in the region. Kenya-EASSy/Intercontinental. This route from Nairobi to Mombasa will require fibre to carry traffic from the EASSy landing point inland and to surrounding countries. The Kenya Pipeline Company wishes to provide its pipeline and right of way along this route as an option for fibre-based telecommunication operators. The existing rail link provides another option. Kenya-Uganda. There are currently two separate cross-border microwave links. The first is a 34 Mbps PDH microwave link via Kitale (Kenya) a nd Mbale (Uganda). The second is a cable link via Bungoma (Kenya) to Tororo (Uganda). This route is already being envisaged for upgrading to fibre via a joint operating company of the telecom providers in each country. Kenya Pipeline Company or the rail operator could also provide rights of way and a route for a fibre system. (Comtel link). Kenya-Ethiopia. See Ethiopia above. This analogue microwave route needs upgrading by a fibre route to provide diversity for each country on their international routes. (Comtel link). Kenya-Tanzania. There are two terrestrial microwave links between Kenya and Tanzania, both analogue Panaftel links. The first runs from Arusha to Nairobi and the second from Tanga to Mombasa. Importantly, because of problems on the links from Uganda to Tanzania, some Ugandan traffic to Tanzania is carried via Kenya and through the second of these two links. TTCL and Telkom Kenya have collaborated to upgrade to a new SDH digital microwave link on the first route in late This could be further upgraded to fibre. It is also possible that a festoon system running along the coast linking Dar es Salaam, Tanga, and the Pemba/Za nzibar Islands to Mombasa could be a feasible alternative to establishing a fibre route along the microwave links. However a new route could also be established that either makes use of the SAPP power grid pylons or the rail links running from Dar up to Arusha. Comtel proposes a alternative, linking directly from Nairobi to Dodoma and on to Mbeya, relying on Tanzania -Zambia link to provide onward connectivity to Dar es Salaam (also proposed by Com -7)

17 Kenya-Somalia. This route carries a substantial amount of traffic (about 2 million minutes a month). Ultimately it may become cost effective for Kenya and Somalia to establish a terrestrial fibre link or a festoon system running along the coast from Mombassa to service the local traffic and to gather additional international traffic that cannot be as efficiently serviced from the EASSy landing point in Mogadishu. f) Uganda MTN has deployed an SDH microwave radio link to the Kenyan border. It is also building out a fibre transmission backbone from Kampala (the capital) that passes through Jinja and short of Tororo. It is planned that this fibre will be extended to the border during In the opposite direction, past Kampala, there is fibre to Mbarara via Masaka, forming an East-West axis across the most densely populated part of Uganda. From Masaka there is an SDH microwave link to Tanzania, and an SDH microwave link from Mbarara to Kabale, and from there a second microwave link to Rwanda. Uganda-Sudan. See Sudan above. Assuming the conditions in the north of the country permit, this fibre project will be important to ensure diversity in Uganda s international connections, as well as those of Rwanda and Burundi. Uganda-Kenya. See Kenya above. This will likely be Uganda s main international route once EASSy has been established. In the interim it will be a vital route for its traffic with east Africa. Uganda-Rwanda. The two countries are already doubly interlinked with microwave. Once Uganda has fibre to EASSy it will likely be necessary to upgr ade this route to fibre as well, depending on the development of the links from Tanzania, see below. (Comtel link). Uganda-DRC. This route may become more important in the future once northeast DRC has established more terrestrial infrastructure. g) Tanzania Tanzania has a relatively extensive microwave network but little fibre. As a likely landing point for EASSy, Tanzania could be an important transit country for Rwanda, Burundi, DRC, Zambia and Malawi, and also provide restoration for northern Mozambique. The incumbent fixed operator TTCL is now part owned by mobile operator Celtel, which also has licenses in neighbouring Malawi, Zambia and Kenya, which will ultimately allow it to fuse its networks across the region and build on its national backbone links to the borders. Tanzania-Kenya. Important route with a number of alternate options (Comtel Link, see Kenya above). Tanzania-Zambia. This is a key route for the sub-region and currently there is only an analogue Panaftel microwave link operating. Zamtel does not have an adequate national backbone to the northeastern extreme of Zambia, nor does TTCL running

18 into the south western region of Tanzania. There are many options for this route, and aside from TTCL s microwave route, there are at least three different alternative infrastructure routes (the TAZARA railway line, electricity transmission lines and the oil pipeline between Zambia and Tanzania). This would be part of the Comtel route running down from Kenya to Mbeya and then s plitting across the borders into Malawi and Zambia, also proposed by Com-7, which adds a branch up to Lubumbashi. Tanzania-Rwanda -Burundi. As an alternate route out to EASSy for Rwanda and Burundi, as well as for some parts of east DRC, this link could make use of the railway network to Lake Victoria and to Lake Tanganyika. In the interim, TTCL could relatively easily interconnect its microwave network with Rwanda and Burundi. Tanzania-Malawi. For Malawian operator(s) to access the upstream cable this is likely to be best achieved either through Tanzania to Dar es Salaam or through Mozambique to the proposed EASSy landing point at Maputo. As-the-crow-flies, the distance from Blantyre to Dar es Salaam is some 1,000-km, whereas that from Blantyre to Maputo is some 1,400-km. A Panaftel 34 Mbps PDH link runs between Tukuyu (Tanzania) Mzuzu (Malawi), which then connects using digital microwave to Lilongwe and Blantyre. One of the SRII short-term projects proposes to link over power lines, there are a number of other proposed fibre transmission links running through Mbeya (Tanzania) en route to Zambia, see 8 above. Com-7/Comtel link (also see below under Malawi). Tanzania-Mozambique. There is a gap on the coastline between Lindi (Tanzania) and Mocimboa da Praia (Mozambique) that could be quickly filled via the close microwave links on either side of the border. Later TTCL could upgrade its microwave infrastructure to roll out fibre from Dar es Salaam to Lindi, whilst TdM is extending fibre from Beira to Pemba and Mocimboa. Given that TdM currently has submarine cable running from Maputo to Beira, completing the link between Lindi and Mocimboa would provide restoration for EASSy should the cable be damaged on the leg between Maputo and Dar es Salaam. Alternatively, a festoon system could be run along the coast from Pemba to Dar es Salaam. h) Zambia Zambia also occupies a pivotal position in the sub-region, and will need to provide important transit facilities for DRC and restoration for other neighbouring countries. The fixed line operator has no national fibre infrastructure, however, the power company Zesco has developed a detailed plan for the establishment of a fibre backbone. In addition, the railway network provides another alternative route. Zambia-Tanzania/Malawi. Com-7 proposes this link, running along the railway reserve, implemented in two phases. Phase -1 would link Livingstone with Lusaka, then to Ndola, Luano and Lubumbashi a total of 1047km of fibre, using CEC s existing fibre from Ndola to Luano. Phase two links Kapiri Mposhi, Serenje and Chipata using Zesco s infrastructure (see below). Serenje to Dar es Salaam would use either the rail or the power line networks. Zesco has electricity transmission infrastructure running from Lusaka to the Tanzanian border at Nakonde. These currently comprise 330 kv lines from Kusaka Kabwe - Pensulo, and 66 kv lines north of Pensulo. ZESCO plans to extend 330 kv lines from Pensulo to Nakonde via Mpika and Kasama. As a second phase to its

19 planned optical fibre network, ZESCO could lay fibre from Lusaka Kabwe Serenje Mpika Kasama Mbala as far as the Tanzanian border. Zambia Malawi. This is a proposed SRII/Comtel route. New infrastructure would be required. Zambia-Namibia-Botswana/Zimbabwe. Zesco has fibre running from Katima Mulilo on the Namibian border to Livingstone on the Zimbabwean border. The Livingstone Lusaka route is also served by the rail line as in the Com-7 project above. Namibia has fibre to Katima Mulilo, so this interconnect should be relatively easy. Botswana is in the process of extending its fibre from Francistown to Kasane, so this interconnect would also be achieved without much intervention. Comtel has initially proposed that the main link for the subregion travels from Livingstone Zambia to Zimbabwe via Victoria Falls, which could be achieved along the power grid. This would need to be examined as an alternative to using Botswana s planned fibre infrastructure from Kasane to Francistown and then from there across the border to Zimbabwe via Bulawayo or onwards to Gabarone. Zambia-DRC/Angola. These are two alternate routes proposed for leading to the west coast. See under DRC below. i) Zimbabwe Zimbabwe provides an important gateway from the south to many of the neighbouring countries to the north. However, there is little fibre infrastructure in place as yet and there are still analogue links to some countries. However, the energy operator Powertel has capacity on some routes and is already leasing some of this to the PTO, Tel*One. South-Africa-Zimbabwe Lusaka. This important route is in the process of being upgraded to microwave STM-1 capacity in a joint venture with Telkom South Africa and there are two routes to Zambia from Zimbabwe. In the future this will likely need to be upgraded to fibre. Powertel has plans to provide fibre on its grid to the South African border from Harare and the SAPP has power infrastructure from Harare to Lusaka. The rail grid is another option. Zimbabwe-Mozambique. This is an existing SRII project that has been delayed due to lack of resources on the Zimbabwean side. Mozambique has upgraded its infrastructure to the border and this route will also be important for onward routing of traffic to Malawi via the potential link from Tete to Blantyre and to intercontinental access via the EASSy connection from Mozambique. Power grid infrastructure could be used from Beira to Mutara in Zimbabwe to upgrade the link to fibre. (Comtel link). Zimbabwe-Botswana. There is fibre on Zimbabwe Powertel s infrastructure to the border with Botswana in Plumtree and Botswana Telecom has fibre to the border via Francistown. This link is mostly an administrative matter between Powertel, Tel*One and BTC. Zimbabwe-Malawi. (Comtel link.)

20 j) Mozambique A submarine fibre optic cable connects the main economic centres of Maputo and Beira via Xai-Xai, Inhambane and Vilanculos. This 1,000-km submarine cable uses dense wavelength division multiplexing (DWDM) and has a capacity of 2.5 Gbps. In the next five years a terrestrial backbone project will reach Quelimane, Angoche, Nacala and Pemba, and include links to the hinterland cities of Chimoio, Tete, Nampula, Lichinga and Cuamba, via three inland links, the first between Manica, Tete and Songo; the second between Quelimane, Cuamba and Lichinga; and the last between Cuamba, Nampula and Pemba. Mozambique -Malawi. This link could be quickly established from Tete to Blantyre using one of the two international licensed operators (Malawi Telecoms or Celtel) connecting to TDM, and ultimately upgraded to fibre using the SAPP power grid infrastructure. (Comtel link). Mozambique -Zimbabwe. See Zimbabwe above. This link can make use of power infrastructure for a fibre route. Mozambique -Madagascar/Intercontinental. See Madagascar below. Under the planned link by Madagascar for a submarine fibre link to SAFE, Mozambique would join with Madagascar and South Africa in establishing a link between the three countries to SAFE. Mozambique -Swaziland/South Africa. Aside from the existing digital microwave links, the Motraco fibre cable already provides a 622Mbps connection between the three countries. k) Botswana Botswana has a fibre backbone from Gabarone to Francistown and is in the process of extending this to Maun and Kasane in the north which junctions with the borders of Namibia, Zimbabwe and Zambia. It has a fibre link to South Africa and broadband microwave links with Namibia. Botswana-Zambia -Namibia. See above under Zambia Botswana-Zimbabwe. See above under Zimbabwe. Botswana-Namibia. This is currently an STM-1 link that would may to be upgraded to fibre in the future to provide alternate links to east and west coast fibre. l) Namibia Namibia has fibre to its borders and is largely dependent on neighbouring country infrastructure upgrades for the full potential use of these links, it is however operating STM-1 or more on its links to Botswana and South Africa already. As a shareholder in SAFE and a consortium member in the South African Second Network Operator (SNO), Namibia could gain access to EASSy via the SNO and the Motraco link to Maputo and thus have a choice of intercontinental cables. Namibia-Zambia -Botswana. See Zambia Above. This will provide Namibia s main route to East and Central Africa.

21 Namibia-Angola/Intercontinental. The proposed West African Festoon System (WAFS) could start in Swakopmund Namibia and follow the coast to link up with Luanda, Angola and then on to the SAFE backbone. An alternative would be to follow the terrestrial power grid link being planned to Angola. m) DRC The DRC has little fixed backbone infrastructure and will need to use power and rail lines to connect to Zambia and also to Burundi/Rwanda or Uganda to obtain access to the intercontinental backbones. At the same time the link to Congo-Brazzaville will need to be upgraded to provide the redundant link to other backbone infrastructure in Central or West Africa. Rail links exist from Kinshasa to the coast at Matadi, and from Lubumbashi to Ilebo, and recently from Lubumbashi to Kindu, west of Burundi. DRC-Tanzania/Burundi. This link could take the Com-7 branch ending in Lubumbashi and extend it north passing Kamina and Kalemie on the way to Bujumbura or continue on the rail link to Kindu before heading east to Kalima, Shabunda, Bukavu and Goma. This part of the link would need to be established over a new route where there is no current infrastructure. DRC (Lubumbashi)-Congo-Brazzaville. This route could follow the old Panaftel microwave route, the rail link from Lubumbashi to Ilebo, or the planned SAPP power grid infrastructure. Alternatively, as proposed by Comtel, the link could connect DRC-Angola (Luanda) via Luau and Huambo to Benguela instead, using the old Benguela rail route, although this could be a difficult area to traverse due to land mines. n) Angola With little national infrastructure, much of the required infrastructure would likely best be built along planned power-grid routes, as a festoon system along the coast, and perhaps along some of the old rail lines. Angola-Congo-Brazzaville-DRC. Much of this route could be established along the planned power infrastructure or as a festoon system along the coast (WAFS). Comtel proposes a link running north along the coast from Namib in southern Angola, up through Benguela, Luanda, Soyo, Matadi and on to Brazzaville, with a main branch back to Lubumbashi along the old Benguela Rail route. o) Swaziland Swaziland has two international links, an SDH microwave link from Mbabane (the capital) to Johannesburg, and a fibre link that was installed about two years ago. Mozambique has a microwave link from Maputo to Johannesburg via Thornhill and Komatipoort. This link has now been upgraded to STM-1 (155 Mbps). On the South African side of the border, Telkom s backhaul network to Johannesburg is at least STM-4 (622 Mbps). However, there is currently no diversity to this link. For access to international fibre, Swaziland Post and Telecommunications Corporation (SPTC) therefore has two options either via South Africa or Mozambique. Motraco, a joint venture company comprising all three power utilities for their respective countries is owned by Eskom (South Africa), SEB (Swaziland) and EDM (Mozambique), already has capacity on these routes which could be used following the issuance of appropriate licenses.

22 p) Lesotho Lesotho has broadband microwave links to the border with South Africa. When capacity requirements increase this could easily be upgraded to fibre. q) Madagascar Madagascar has little national infrastructure and no submarine links at present, however a national backbone is being planned, as well as participation in EASSy. Madagascar-Mozambique/South Africa/ SAFE/EASSy. See Mozambique above. Madagascar has an immediate te rm strategy to establish a fibre link from the south of the country to link in with SAFE with a possible bridge to link Maputo with SAFE and its festoon system running up the coast. This will need to be reconciled with the EASSy route from Madagascar to SAFE. r) Somalia. Somalia is not currently linked to any of its other neighbours directly, although there is a large amount of international and interregional traffic to its neighbours. The analogue Panaftel network linkin g Hargeisa, Burao and Berbera is not operational and all that remains is a few masts. The telecom companies operating in Somalia have built some connections between them, generally as PDH 4x2 Mbps links, but these are non-redundant. The Somali Telecom Group is planning to install a link from Borama to Djibouti in the next year. Somalia -Djibouti. It may be feasible to establish a terrestrial fibre system or even a festoon system along the coast to link these two countries. Somalia -Kenya, Somalia- Ethiopia (See Kenya, Ethiopia above). s) Rwanda Rwanda has various microwave links to its neighbours Uganda and Burundi, but not to Tanzania, or the DRC. These links would all need to be upgraded to provide broadband connections. Rwanda -Uganda. See above under Uganda. (Comtel link). Rwanda -Burundi-Tanzania. See 10 above under Tanzania. (Comtel link). t) Malawi Significant national infrastructure upgrades are required in Malawi, although there are some important infrastructure routes for international connections, both to the north and the south of the country. For these to have maximum potential the north-south backbone for the country will need to be established. Malawi-Tanzania. See under Tanzania above. (Com-7/Comtel Link) Malawi-Mozambique. See under Mozambique above. Malawi-Zambia. Proposed SRII, Comtel link.

23 u) Comoros Comoros is a member of Comtel, but has not yet participated in any broadband link plans. Given the routing of EASSy it should be encouraged to become involved in this projec t. Summary of Country Regional Project Participation Country EASSy Comtel SRII OTHER Angola AT AT SAFE/WASC Botswana BTC BTC COM -7 Burundi ONATEL Comoros ComoreTel DRC OCPT Celtel/Vodacom, Com-7, CEC Djibouti DT DT SEA -ME-WEA Egypt ET SEA -ME- WEA/FLAG Eritrea Eritel Ethiopia ETC Kenya TKL TKL KPC, Celtel, KDN Lesotho LTC LTC Vodacom Madagascar TELMA Madagascar Link Malawi MTL MTL Celtel Mauritius MT SAFE/ Mozambique TDM TDM Vodacom Namibia TN TN SAFE member, COM -7 Seychelles X Rwanda RwandaTel MTN South Africa Telkom SA TelkomSA Motraco, Sasol, Sentech Sudan STCL SAS-1 Swaziland SPTC SPTC Motraco Tanzania TTCL, Zantel TTCL TTCL/Celtel Tanesco, Tazara, TRC, Vodacom, Com-7 Uganda MTN UPTC Celtel, URC, MTN Zambia ZamTel ZamTel ZESCO, CEC, Com-7 Zimbabwe Tel*One Tel*One Powertel

24

25

26 Existing Infrastructure cross-border projects summary Greyed out cells indicates national backbones being built From Sudan (Gadarif) Ethiopia (Addis Ababa) Kenya (Nairobi) Kenya (Nairobi) Kenya (Nairobi) Tanzania (Mbeya) Tanzania (Mbeya) Tanzania (Mbeya) Mozambique (Nacala) Zambia (Livingstone) To Ethiopia (Gondar) Djibouti Tanzania (Dodoma) Kenya (Mombasa) Uganda (Kampala) Malawi (Lilongwe) Zambia (Lusaka) Zambia (Lusaka) Status of current infrastructure Bandwidth Microwave SDH STM Mbps Planned link (in next year) Current microwave link Nairobi Namanga - Arusha Analogue network Analogue network Analogue Panaftel Analogue Panaftel Analogue Panaftel Madagascar None - Satellite Zimbabwe Analogue UHF radio link OC-48/ 192 Planned infrastructure COMTEL indicates Kassala (Sudan) Addis Ababa (Ethiopia) ETC plan to upgrade existing microwave link to fibre link to Djibouti via Dire Dawa (800-km). East African Digital Transmission Project plans microwave from Nairobi Dodoma via Oldinka (Tanzania) 1) EADTP proposes fibre on this route, TKL reiterates plans in June 04 to lay fibre on this route. 2) Kenya Pipeline Company tendered for fibre from Mombasa to Nairobi, Kisumu and Eldoret MTN Uganda has fibre close to Tororo to Kampala to Mbarara. Kenya Pipeline Company could extend its network to Kampala. SRII short term project to link Lilongwe Blantyre Mbeya Dodoma Dar es Salaam) COMTEL propose fibre route from Mbeya to Lilongwe. Com -7, see below via Tanzania. COMTEL needs fibre from Mbeya to Lusaka. COM-7 proposes fibre along TAZARA railway line via Tunduma Mpika SRII Long term project 2.5 Gbps SDH fibre. ZESCO plans fibre as far north as Mbala in second stage, indicates potential link to Tanzania TANESCO plans to string fibre along its national power grid. EASSy Maputo (Mozambique) to Mahajanga (Madagascar) COMTEL propose fibre from Nacala (Mozambique) to Antananarivo (Madagascar) via Comoros SRII Short term plan to upgrade 2.5 Gbps SDH fibre SRII Long Notes New link in operation Planned for backhaul from Ethiopia to SEAMEWE3 and planned EASSy COMTEL would deploy fibre Three planned/ proposed fibre projects. Kenya Data Networks (licensed data operator) interested in rolling out its own fibre along this route. Fibre link required on Kenyan side. Note, UTL the member from Uganda in COMTEL project. Project involving electricity companies of Tanzania & Malawi ZESCO & TANESCO could either apply for telecom and int l gateway licences, or lease dark fibre to licensed operators. A spur from New Madagascar link to Mozambique and SA, plus EASSy to Comoros would be most likely route. Tel*One to install 140 Mbps PDH link radio link from

27 Zimbabwe Mozambique 34 Mbps PDH link Zimbabwe Malawi Existing 34 Mbps PDH radio link; only 12 circuits terminated term plan 2.5 Gbps fibre route from Livingstone to Gweru COMTEL needs fibre route Lusaka Livingstone-Bulawayo. SRII Long term plan to upgrade to 2.5 Gbps and then 622 Mbps fibre link from Beira to Harare via Mutare. COMTEL needs fibre from Harare to Beira (Mozambique not member of COMESA) SRII short term plans to build 155 Mbps SDH microwave link; medium term plan to 622 Mbps SDH fibre system. COMTEL suggests fibre route from Harare to Blantyre Victoria Falls to Livingstone when Zamtel is ready.

28 Part 1: A review of existing and planned regional broadband networks and infrastructure Section 1.1 describes the different building-blocks of regional infrastructure and the limitations and opportunities they offer. Section 1.2 then focuses on ten key subregional routes to look at existing infrastructure and the impact of planned projects. Section 1.3 summarises existing regional infrastructure projects and a detailed list of all projects appears in the appendices. Sections 1.4 and 1.5 look at the potential contributions of cellular operators and alternative providers. This concludes with section 1.6 that identif ies the drivers that are creating traffic demand in Africa. 1.1 The key building blocks of regional infrastructure Existing regional infrastructure is made up of a series of inter-locking building blocks National transmission backbone infrastructure The national transmission infrastructure is the lynch pin of the national telecommunication operator and reinforces the incumbent's central position in the market. Extending the backbone to secondary towns and cities enables carriers to add new switches and points of presence (PoPs) at these locations, allowing them to connect new customers and thereby increase the penetration of fixed lines outside the capital cities. An accessible national backbone will also earn interconnection revenues from mobile operators, ISPs and other service providers, which would otherwise be forced to build out their own networks. The next tranche of liberalisation will be in the fixed-line sector. PTOs already face competition in the mobile and internet sectors, but they will now face a competitive threat from alternative backbone providers of long-distance and international traffic. Newly licensed alternative fixed-line carriers will have a choice of offering facilitiesbased or service-based competition. If the incumbent already has an extensive, highcapacity backbone in place, it makes commercial sense to lease and re-sell capacity on this rather than construct new infrastructure or use satellite-based connectivity Bilateral international links: Microwave and Fibre Terrestrial infrastructure gaps between neighbouring countries or legacy analogue international links are still common in the region. The national microwave and fibre transmission networks of many operators in the region are sub-optimally interconnecte d internationally. Many of the links built during the 1970s and 1980s under the Panaftel programme which form the primary link between the countries are still analogue and do not have sufficient capacity. Panaftel was eventually superseded by the twin trends of (i) the falling cost of satellite, with most countries building their own earth stations and establishing international links with Intelsat, and (ii) by the greater demand for transmission capacity (driven by increasing levels of voice traffic and new applications such as the Internet) than could be provided by the analogue links. In a number of cases the Panaftel links were never completed, have since fallen

29 into disrepair or have been damaged or destroyed during conflicts. However, upgrading to digital microwave and fibre links is starting to have an impact. A growing number of operators are deploying higher capacity digital microwave or fibre links with neighbours, either on a bilateral basis or through multilateral projects. International links are often an extension of national backbones when the infrastructure reaches the border (see National Backbone map). South Africa, for example, now has a minimum of STM-4 (622 Mbps) links with Botswana, Lesotho, Namibia, Mozambique and Swaziland. Kenya is implementing a digital microwave link with Tanzania, and has proposed regional transmission project in co-operation with Uganda and Rwanda, although for the time being it has low capacity links with Tanzania, Uganda and Ethiopia. Sub-regional programmes within East Africa (EARPTO) and Southern Africa (SRII) are seeing the upgrading of these analogue links to digital ones and progress is advancing with most of the short and medium term projects having been completed. One example of co-operation to upgrade to higher capacity links in order to meet high traffic volumes is South Africa s bilateral link, with Zimbabwe. A fibre link has been installed to Zimbabwe from South Africa, although the leg from the South African border to Gweru (Zimbabwe) comprises digital microwave transmission. This arrangement differs slightly from the conventional bilateral model: Telkom has installed the infrastructure at both ends, and is recovering the investment from Net*One (the Zimbabwean carrier) through an accounting rate arrangement which takes a cut out of revenues from both incoming and outgoing traffic until the cost is covered. Such an arrangement could serve as a model for other bilateral projects, although its particular attraction lies in the high volumes of international traffic that flow between Zimbabwe and South Africa Intercontinental international links: Submarine Cables and Satellites Upstream international bandwidth for voice or data traffic (including internet) in the region is provided by a mixture of fibre and satellite infrastructure. The major development during 2002 was the entry into commercial service of the Sat-3/West African Submarine Cable (WASC), and the South Africa-Far East (SAFE) cable. Because the consortium comprises international operators and African public telecommunications operators (PTOs), the African PTO members have the right of first refusal on all traffic onto the cable for a period of five years. The other major development that was due to take place during but did not, in fact, occur - was the deployment and entry into service of the Africa Optical Network (AfricaONE) submarine cable. This would have encircled the continent and was to have been built in three phases: the first running along the West African coast from South Africa to Europe; the second across the top of North Africa through the Mediterranean; and the third completing the ring by joining up with South Africa along the eastern seaboard of Africa. This was owned by private investors, but as sufficient investment was not secured, the project was abandoned. Furthermore, it faced strong competition in the first phase from Sat-3/WASC, and in the second phase

30 from the fact that there are at least four cables along the North African coast, suggesting that the most sensible option would have been to have implemented the third and final phase along the East African coastline. In its place, a new East African submarine cable (EASSy) has been considered. As initially proposed, this could broadly follow the same route, running from Mtunzini (South Africa) to Djibouti (and possibly Eritrea), via Maputo (Mozambique), Dar es Salaam (Tanzania), Toliara or Mahajanga (Madagascar), Mombasa (Kenya), Mogadishu (Somalia). In South Africa it would interconnect with Telkom's network and, in turn, to the Sat-3/WASC system. In Djibouti, it could interconnect with both the SEA-ME-WE II and III cables and the FLAG Europe-Asia cable. Due to the expected completion of the Madagascar link to Mozambique and SAT-3 in 2005/6, it and the availability of the SAS-1 link in Sudan, it may be possible to shorten the length of the EASSY system considerably, as described above Domestic Backhaul Capacity Any long-haul bandwidth that becomes available domestically will ultimately need upstream interc ontinental connectivity to a submarine cable landing station. For example, the Sat-3/WASC cable may well land in Lagos (Nigeria), but until the Nigerian PTO, NITEL, has upgraded its national transmission backbone it will continue to be unable to serve its own requirements to link secondary cities, let alone provide wholesale services for other licensed national and international providers. This is rather like having a motorway pass near-by, but with insufficient junctions for access. In the Nigerian case, the newly licensed second national operator (SNO), Globacom, has now leased wholesale capcity on Sat-3/WASC and is deploying its own backbone. MTS First Wireless is also licensed as a long distance operator, and mobile operators have built their own backbones but are not permitted to re-sell capacity on their networks. Thus until the national carriers have an accessible national backbone, they cannot distribute the long-haul bandwidth derived from the submarine cable to customers around the country. Furthermore, without a national transmission backbone to aggregate national and sub-regional traffic, the addressable demand for international bandwidth (and the case for new infrastructure projects) is severely suppressed. For prospective private-sector investors wary of over-capacity and a bandwidth glut in the developed world, the risk of being able to realise the latent demand for bandwidth hinges on the extent of national backbones collecting customers and traffic. For the proposed East African submarine cable, at least four regional fibre projects could provide such a 'watershed', collecting and filtering traffic from the interior to the coastal landing points: COMTEL, the East African Digital Transmission Project (EADTP) or its successor, the Central African Backbone, and COM-7. In addition, alternative infrastructure companies could provide backhaul routes. In the first two cases the projects rely upon national incumbent carriers to build out their own domestic networks. In the first case, COMTEL envisages a network connecting the whole COMESA region, premised on leasing capacity from national carriers where it already exists and only building new fibre where it does not (mainly for some

31 international links). In the second case, Telkom Kenya is keen to push ahead with the construction of its section of the EADTP as a national backbone, which could then interconnect with the backbones of neighbouring UTL and MTN in Uganda and TTCL in Tanzania. In addition, plans have been revitalised to link Rwanda to Mombasa through Uganda and Kenya. Alternatively the planned fibre cable running on the Kenya Pipeline Company s infrastructure could be used. COM-7 would use railway rights of way for fibre in the region, and a Central African Backbone could combine a variety of public and private operator networks to bring traffic from as far inland as the Sahel. At the same time, the competitive threat from satellite carriers continues to hover in the background. It is to some extent not in the interest of satellite carriers for submarine cable projects to come through to fruition, as this fibre would provide an alternative, high-capacity route. Certainly, it would tend to subordinate the role of satellite to either a secondary, back-up international link, however its role is grow ing for linking remote interior locations by very small aperture terminal (VSAT) to the submarine landing stations, and sites off-continent, so traffic is likely to shift in this direction. 1.2Key sub-regional routes analysed A number of key sub-regional routes have been identified that are essential if there is to be an integrated continental network. This detailed work informs the conclusion of the gap analysis in part Backhaul from Djibouti Two submarine cables land at Djibouti: SEAMEWE II and SEAMEWE III. The proposed EASSy cable would also land at Djibouti, and Djibouti Telecom is a signatory to the MoU. At Djibouti, traffic from the EASSy cable would then be carried to Europe and Asia. The status of sub-regional backhaul links from Djibouti are therefore a useful indication for other proposed landing stations on the system. Djibouti Telecom is installing a fibre link to Ethiopia and may also participate in the planned SEA- ME-WEA 4 cable. Expected to cost between $500 and $700 million, this cable is to be built by Fujitsu and Alcatel, and will provide Terrabit capacity using DWDM. Djibouti has three neighbours: Eritrea, Ethiopia and Somaliland. Eritrea Telecom is

32 linked into Djibouti via Changa and Aseb through a 155 Mbps microwave link. Eritrea Telecom is planning to install a minimum STM-1 (155 Mbps) domestic microwave backhaul link from Aseb towards Asmara (the capital), but in the meantime does not have terrestrial infrastructure along this leg. Eritrea Telecom has expressed interest in establishing a submarine cable landing station at Massawa, and was an ardent supporter of the AfricaONE system. The operator is now working to join the EASSy system. An alternative route could also be established via Sudan. Ethiopia Telecommunication Corporation (ETC) currently has Panaftel and higher capacity microwave connectivity into Djibouti. It is planning to increase capacity on this route through the implementation of an 800-km OC-48 terrestrial fiber link to Djibouti via Dire Dawa which is primarily designed for international interconnectivity into SEA-ME-WE3 and the planned EASSy cables. This project is under contract and is expected to be completed in In addition, ETC is also implementing a 2 Mbps PDH microwave link between Jijiga a nd Hargeisa in Somaliland. Somaliland is not currently linked to Djibouti or any of its other neighbours. The analogue Panaftel network linking Hargeisa, Burao and Berbera is not operational and all that remains is a few masts. The telecom companies operating in Somaliland have built some connections between them, generally as PDH 4x2 Mbps links, but these are non-redundant. The Somali Telecom Group is planning to install a link from Borama to Djibouti in the next year Ethiopia Ethiopia is a key gateway country for regional connectivity projects, as it provides the most viable route from Northern Africa and the Mediterranean to Eastern and Southern Africa, avoiding the turbulent areas of southern Sudan and northern Uganda. Ethiopia Telecommunications Corporation (ETC), the monopoly incumbent operator, has installed a high capacity microwave link with Sudan, and has microwave links to Djibouti. ETC is a part owner of capacity on the SEAMEWE II and SEAMEWE III submarine cables which land at Djibouti, and is therefore in a position to be able to supply upstream international connectivity to its southern neighbours either via Djibouti, or through Sudan and Sudatel s new link to Jeddah. ETC provides some limited connectivity to the SEAMEWE and FLAG submarine cables in Djibouti using the Panaftel link to Kenya via Moyale (see below). ETC s Backbone Transmission Development Plans

33 Route Distance Type Configuration Status Gonder Khartoum (Sudan) Microwave 34 Mbps SDH Existing and operational Jijiga Hargeisa (Somaliland) Microwave 2 Mbps PDH Under contract, est RFCS 2005 Addis Ababa-Dessie- 820Km FIbre OC48,SDH ADM Planned Mekele Addis Ababa-Awassa 280Km FIbre Planned Addis Ababa--Jimma 390Km FIbre OC-48,SDH ADM Planned Addis Ababa- Bahir Dar 580Km FIbre OC-48 ADM Planned Addis Ababa-- Nekempte 340Km FIbre OC-48 ADM Planned Addis Ababa-- Sululta Earth 35Km FIbre OC-48 Planned Station Addis Ababa- Dir Dawa- Djibouti 800Km FIbre OC192;SDH International Route to SMW3/EASSy Under contract, est RFCS Kenya - Ethiopia The Panaftel link from Kenya into Ethiopia via Moyale is the sole terrestrial link between the two countries. This link still carries traffic between the two countries and is one of the analogue 980 channel microwave backhaul links into Djibouti where a few circuits from Kenya are patched across Ethiopia to transit onto SEAMEWE II and SEAMEWE III cables in Djibouti. A high capacity terrestrial link from Kenya to Ethiopia would provide restoration for the proposed EASSy cable should that be damaged anywhere on the leg from Mombasa to Djibouti around the Horn Kenya to Uganda The international link(s) from Kenya to Uganda are of pivotal importance as they would provide backhaul, not just for traffic from Uganda, but also from Rwanda and potentially eastern DRC and Burundi. There are currently two separate cross-border links. The first is a 34 Mbps PDH microwave link via Kitale (Kenya) ad Mbale (Uganda). The second is a cable

34 link via Bungoma (Kenya) to Tororo (Uganda). On the Ugandan side of the border, MTN has deployed an SDH microwave radio link to the Kenyan border. It is also building out a fibre transmission backbone from Kampala (the capital) which passes through Jinja and short of Tororo. It is planned that this fibre will be extended to the border during In the opposite direction, past Kampala, there is fibre to Mbarara via Masaka, forming an East-West axis across the most densely populated part of Uganda. From Masaka there is an SDH microwave link to Tanzania, and an SDH microwave link from Mbarara to Kabale, and from there a second microwave link to Rwanda. On the Kenyan side of the border there are the following links: Route Distance Type Configuration Status Nairobi Eldoret Cable Operational Bungoma Mbinba Tororo Jinja - Kampala. Nairobi Kitale Mbale - Microwave PDH 34 Mbps. Kampala. Tororo Kenyan border Microwave SDH Operational Kampala Jinja Tororo Fibre Operational Tororo Kenyan border Fibre Planned, est RFCS Kenya Somalia Due to the large number of Somalis in Kenya, a route between these two countries is likely to carry significant amounts of voice traffic.

35 1.2.6 Kenya Tanzania (1 and 2) There are two terrestrial international links between Kenya and Tanzania, both analogue Panaftel links. The first runs from Arusha (Tanzania) - Nairobi (Kenya), and the second from Tanga (Tanzania) Mombasa (Kenya). Importantly, because of problems on the links from Uganda to Tanzania, some Ugandan traffic to Tanzania is carried via Kenya and through the second of these two links. TTCL and Telkom Kenya have collaborated to upgrade these international links and began to install a new digital microwave link on the first route in late This will replace the aging analogue interstate link with an SDH transmission system and will address the growing demand for interstate communication traffic from public switched telecoms networks, data and mobile operators. Route Type Configuration Status Arusha (Tanzania) - Nairobi Analogue Panaftel 960-channel (Kenya) link Nairobi (Kenya) - Namanga - Arusha (Tanzania) Digital microwave SDH 155 Mbps This link was not yet functional in mid-2003 because a 50 mile section on the Kenyan side past Namanga is not yet installed. Mobile operator Kencell offered to provide it (for the transmission Mombasa Tanga Analogue Panaftel microwave SDH 155 Mbps capacity) This is an old, ailing PANAFTEL link with limited capacity.

36 At least four alternative routes exist: 1. East Africa Digital Transmission Project (EADTP). Although this project has not been taken forward under its original form, the East African operators are building sections of it. During 2004, Telkom Kenya is pushing ahead with the construction of a fibre link from Nairobi to Mombasa, and operators from Rwanda, Uganda and Kenya have announced a plan to upgrade the international links between the three countries. Under the EADTP, these two international links from Nairobi through to Dodoma and Mombasa to Tanga would use digital microwave. 2. Celtel/TTCL. Celtel holds a stake in Tanzanian incumbent TTCL after it was privatized, and during 2004 Celtel also bought a stake in the Kenyan mobile operator Kencell. For the time being, Kencell does not have an international gateway licence but it is expected that it will be granted one in the future, and as part of a Central African Ring, would be able to provide cross-border links. Celtel is already doing so between Uganda and Tanzania via Bukoba. 3. COMTEL. The COMTEL project proposes to lay fibre from Nairobi to Dodoma, basically along the same (or similar) route to the SDH microwave route. This fibre would have a maximum capacity of 120 Gbps. In addition, COMTEL would lay fibre from Nairobi to Mombasa, and from Dodoma to Dar es Salaam, in both cases this could access potential landing points to the proposed EASSy submarine cable. 4. EASSy. The proposed East African submarine cable would also provide a high capacity international link between Kenya and Tanzania. Vice versa, should the proposed EASSy be damaged on the stretch between Mombasa and Dar es Salaam for any reason, the two international links via Tanga and Namanga could provide restoration Chad Chad falls outside of the direct focus of this study. However, analysis of the regional transmission map(s) show that the gap between Sudan s extensive fibre backbone and Sat-3/WASC submarine cable landing point at Douala (Cameroon) could be filled, thereby providing east-west redundant, rationalised regional network. The Chad Cameroon pipeline provides connectivity for Chad into Douala. A trans-sahel backbone would link Burkina Faso, Niger, Chad, Sudan, and Uganda (and thus to Kenya

37 and Tanzania). A redundant ring could also be created by linking with a Central African backbone by continuing South through Chad via Cameroon to Gabon, taking advantage of the Cameroun-Chad fibre backbone that has been laid along the oil pipeline. Sotelchad s domestic transmission infrastructure comprises of microwave and DOMSAT links. Outside of N'Djaména (the capital), the main towns which are served by the telephone network are: Moundou, Abéché, Sarh, Faya -Largeau, Bongor, Mongo, Ati,Doba, Am-Timan, Bol, Mao, Lai, Biltine. The towns of Sarh, Moundou, Abéché and Faya Largeau are connected to N'Djaména via a DOMSAT system. Eighteen provincial towns are linked by microwave radio links. A fibre optic cable installed in 1996 (SDH STM-1 at 155 Mbps) links the international satellite earth station at Goudji (N'Djaména) with the central switch. Sotelchad has four satellite earth stations at Goudji, one each for: international network, international network with DAMA, the national Domsat network, and a direct link with Sudan. All of Chad s international connectivity is currently achieved through satellite except for a radio relay link to Sudan and the radio relay system linking Chad to Cameroon. Chad s international routes Route Type Configuration Status N'Djaména - Kousseri (Cameroon) Analogue Panaftel radio relay link This is 4-km, and was brought into service in August It uses the radio CTR 124 type GTE in system 1+1 with a capacity of 600 telephone circuits (ie 64 X 600 = 38,400 Kbps) N'Djaména Douala (Cameroon) Maiduguri (Nigeria) Kausseri (Cameroon) -N djamena (Chad). N djamena Khartoum (Sudan) Fibre Satellite The Cameroon Chad Pipeline Project connects N'Djaména to the port of Douala in Cameroon, which will in turn provide onward international connectivity via the Sat-3/ WASC cable. Camtel, the Cameroonian carrier, will operate the fibre backbone. Central African digital Proposed transmission link

38 1.2.7 Dar es Salaam (Tanzania) Lusaka (Zambia) There is only an analogue Panaftel microwave link from Tanzania to Zambia. Zamtel does not have a national backbone to the north eastern extreme of Zambia, nor to TTCL running into the south western region of Tanzania (see E above). The availability of a transmission route across this stretch is important for Zambia to access the proposed submarine cable landing point at Dar es Salaam and to provide access for the DRC. There are five options for this route, using at least three different alternative infrastructure routes (the TAZARA railway line, electricity transmission lines and the oil pipeline between Zambia and Tanzania). There is some duplication in the proposed schemes, creating room for collaboration or the building of alternate networks for redundancy, but this is a key gap in rationalized regional network linking Southern Africa to Eastern and Central Africa. 1. Com-7. The TAZARA railway line runs from Dar es Salaam Iringa Mbeya - Kasama Mpika Lusaka. The Com -7 Regional Project proposes to lay fibre along the TAZARA railway line. 2. COMTEL. The COMTEL pr oject proposes to lay fibre from Lusaka Mbeya Dodoma Dar es Salaam with an ultimate capacity of 120 Gbps. Both ZAMTEL and TTCL are members of the COMTEL operating company. 3. A Central African Ring would cross from Zambia to Tanzania via Malawi. This is a particularly cost effective route to establish as it lies along the population dense strip running through southern DRC and the Copperbelt and eastwards along the railway line to Dar es Salaam. The GSM coverage map shows the particularly extensive coverage along this route in southern Tanzania. 4. ZESCO. The Zambian electricity company ZESCO has electricity transmission infrastructure running from Lusaka to the Tanzanian border at Nakonde. These currently comprise 330 kv lines from Kusaka Kabwe - Pensulo, and 66 kv lines north of Pensulo. ZESCO plans to extend 330 kv lines from Pensulo to Nakonde via Mpika and Kasama. As a second phase to its planned optical fibre network, ZESCO would fibre from Lusaka Kabwe Serenje Mpika Kasama Mbala as far as the Tanzanian border. 5. The Dar es Salaam Ndola pipeline. This route could also be used to link Zambia with Tanzania.

39 1.1.8 Tanzania - Malawi Similar to the gap between Tanzania and Zambia, the gap between Tanzania and Malawi dislocates the Southern and Eastern Africa regions. For Malawian operator(s) to access the upstream cable this is likely to be best achieved either through Tanzania to Dar es Salaam or through Mozambique to the proposed Eassy landing point at Maputo. The as-the-crow-flies, the distance from Blantyre to Dar es Salaam is some 1,000-km, whereas that from Blantyre to Maputo is some 1,400-km. A Panaftel 34 Mbps PDH link runs between Tukuyu (Tanzania) Mzuzu (Malawi), which then connects using digital microwave to Lilongwe and Blantyre. One of the SRII short term projects proposes to link over power lines (see below), and as the inset map above indicates there are a number of other proposed fibre transmission links running through Mbeya (Tanzania) en route to Zambia (see above). Interestingly, there is also a gap on the coastline between Lindi (Tanzania) and Mocimboa da Praia (Mozambique). TTCL plans to roll out fibre from Dar es Salaam to Lindi, whilst TdM plans to deploy fibre or digital microwave from Beira to Pemba and Mocimboa. Given that TdM currently has submarine cable running from Maputo to Beira, completing the link between Lindi and Mocimboa would provide restoration for EASSy should the cable be damaged on the leg between Maputo and Dar es Salaam. Route Distance Type Configuration Status Lilongwe - Mzuzu - Tukuyu - Microwave PDH 34 Mbps. Mbeya - Dodoma - Dar es Salaam Blantyre Lilongwe Mbeya Dodoma Dar es Salaam. 768-km Fibre 2.5 Gbps This proposed link is one of the SRII short term projects, and wo uld comprise optical fibre strung on electricity power lines. The project is being discussed with the Tanzanian and Malawian electricity companies (see Electricity Operators, below). In addition to the SRII link, two other options exist to complete this gap: 1. The Central African Ring would travel from Zambia to Tanzania via Malawi. GSM deployment has already resulted in extensive coverage in southern Tanzania from the Malawian border northwards. 2. COMTEL. The COMTEL project proposes the laying of fibre between Mbeya (Tanzania) to Lilongwe and Blantyre, and from there to Harare (Zimbabwe) and Nacala (Mozambique). This essentially would form a fibre national backbone for Malawi.

40 1.2.9 Zambia Botswana - Namibia For the time being, Zambia does not have access to submarine fibre (see above). Unless it could access Sat-3/WASC via Angola, or the proposed EASSy cable via Tanzania or Mozambique, it is doubly landlocked and must pass through at least two countries to access Sat-3/WASC from South Africa. For options through Namibia or Botswana, the bilateral links need to be upgraded. Alternative infrastructure providers could provide fibre backhaul routes to the Zambian border from ZAMTEL s core network. ZAMTEL has discussed options with ZESCO, but negotiations broke down because ZAMTEL preferred to own the fibre network rather than lease capacity from ZESCO. ZESCO has fibre running from Katima Mulilo on the Namibian border to Livingstone on the Zimbabwean border. Notably, the Com -7 project proposes fibre from Dar es Salaam to Livingstone, and onward access to submarine fibre from South Africa. Should this project come to fruition, this could be achieved through ZESCO s fibre network covering this gap Mozambique Swaziland South Africa Both landlocked Swaziland as well as Mozambique have high capacity bilateral links to South Africa. Swaziland has two links, an SDH microwave link from Mbabane (the capital) to Johannesburg, and a fibre link which was installed about two years ago. Mozambique has a microwave link from Maputo to Johannesburg via Thornhill and Komatipoort. This link was SDH but has now been upgraded to STM-1 (155 Mbps). On the South African side of the border, Telkom s backhaul network to Johannesburg is at least STM-4 (622 Mbps). However, there is currently no diversity to this link. For access to international fibre, Swaziland Post and Telecomunications Corporation (SPTC) would therefore have two options either via South Africa or Mozambique. However, in order to protect the link from South Africa to Mozambique, to increase SPTC s capacity to Mozambique and in order to provide restoration for EASSy should the cable become damaged offshore from Mtunzini (South Africa), it would be desirable to increase capacity between these three countries. Motraco, a joint venture company comprising all three power utilities for their respective countries is owned by Eskom (South Africa), SEB (Swaziland) and EDM (Mozambique), and has capacity on these routes (see below). Motraco was created in order to sell power from Eskom to the Mozal aluminium smelter in Maputo, Mozambique. Motraco has fibre optic cables over the power line infrastructure between South Africa, Swaziland and Mozambique.

41 Sudan-Ethiopia-Uganda Sudan has a large well developed f ibre backbone to its borders, as well as upstream connectivity to the SEA-ME-WEA and FLAG/Falcon landing points in Jeddah, Saudi Arabia via its SAS-1 cable from Port Sudan and via its new link to Egypt and to these backbones in Alexandria. The SAS-1 link from Port Sudan to Jeddah has a substantial capacity of 1.28Terrabits per second, of which very little is currently used. Sudatel have a 50% ownership in the joint fibre cable operating company (with Saudi Telecom), and are keen to provide bandwidth at competitive prices. Sudatel could very quickly extend its existing fibre network to the border with Ethiopia and possibly it could undertake a joint venture with an Ethiopian consortium to extend fibre on the Ethiopian side to Addis Ababa. Sudan-Uganda is an important alternative route for east-central africa, as well as for the traffic along the borders of these two countries, however while the region s political status is unclear, MTN s national backbone in Uganda runs close to the Sudanese border and Sudate l continues to provide infrastructure in the South Sudan area which could quickly be upgraded to fibre. 1.3 Regional Infrastructure Projects This section outlines the range of existing regional infrastructure projects and the links they are seeking to create Africa-wide Afritel is an ITU project which aims to promote the sub-regional connectivity projects and provide technical assistance to the sponsoring regional organisations. Managing Panaftel at the continental level was found to be unworkable, so the structure of sub-regions was adopted. In particular, Afritel aims to promote connectivity projects in four sub-regions, thus: Southern Africa SRII (SADC Regional Information Infrastructure). West Africa INTELCOM I and INTELCOM II. Central Africa Digital transmission link between Nigeria, Cameroon and Chad. Eastern and Southern Africa - COMTEL. AFRITEL has now finished its first phase, which saw the development of feasibility studies and in some cases the preparation of tender documents. One particular element to emerge from the first phase was the ownership and financing structures required for these large projects such as the Strategic Equity Partner structure in the COMTEL project and the bilateral/multilateral arrangement in SRII project (see below). The NEPAD programme is also bringing renewed momentum and financing to these regional infrastructure projects. The ITU Afritel project team assisted in the

42 preparation of feasibility studies for some of these links. NEPA D has identified SRII, COMTEL, the proposed East African submarine cable and (prior to installation) the West African fibre (SAT 3/WASC) as priority projects North Africa and the Middle East There are extensive international fibre links from North Africa to Middle East through a number of Mediterranean submarine cable systems which could have an impact on infrastructure plans further south. These include: FLAG Europe Asia, SEA-ME- WE-II, SEA-ME-WE-III and the planned SEA-ME-WE -4. In addition, the SAS-1 cable connecting Sudan (Port Sudan) to Saudi Arabia (Jeddah) with Terabit capacity was inaugurated in June Otherwise, international links are through the Arab Satellite Communication Organization (ARABSAT) organization established in 1976 by the members of the Arab League 1. Sudan had 1,737 Arabsat circuits in 2001, almost three times as many as it had in Note: countries coloured in green are ARABSAT members; solid orange line denotes the SAS-1 marine fibre circuit and the dotted orange line denotes the planned route for COMTEL. Regional connectivity was disrupted severely in 2003 when the Algerian earthquake hit on 21 May This temporarily severed Algeria s international communication links and severely disrupting traffic flows within and across the Middle East/North African region. Five submarine cables were damaged in the earthquake, including: ALPAL-2, FLAG, SEA-ME-WE-II and SEA-ME-WE-III. Some satellite earth stations were also damaged. These cables not only carry bilateral traffic between Algeria and France, Tunisia and Egypt, but also intercontinental traffic from Europe destined for the Middle East, North Africa and Asia. During the disruption, traffic between Europe and these destinations was carried on the SAT-3/WASC/SAFE fibre 1 ARABSAT s members include: Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Mauritania, Morocco, Libya, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen. See

43 cable. Engineers restored services by rerouting Algerian international traffic via terrestrial links with Tunisia and Morocco and by establishing emergency satellite links. France Telecom had repaired ALPAL-2 cable by 2 June ALPAL-2 has already provided back-up to the SEAMEWE-II cable, which was damaged in French waters during 2001, thus necessitating the early introduction into service of ALPAL-2 to take up the affected traffic. The break in SEAMEWE-II caused severe disruption not only to the international bandwidth between Algeria and France, but also to traffic from other countries along SEAMEWE-II's route. The bulk of Algeria's upstream international bandwidth is gained through the SEAMEWE-II cable, which currently provides a 565Mbps link between Algeria and France, and the Algiers - Palma II (ALPAL-2) cable. In addition, Algerie Telecom operates satellite links and has terrestrial links with neighbouring Morocco (via Oujda) and Tunisia Sub-Sahara Africa and North Africa The Sahara desert largely forms an unconnected border between sub-saharan Africa and North Africa in terms of international connectivity, although the Sat-3/WASC cable connects to Mediterranean cables and North and Southern African countries and to the backbones in Asia. Sudan occupies a pivotal strategic position, as it connects with Egypt, Eritrea, Ethiopia, Kenya, and since June 2003 to Saudi Arabia via the SAS-1 submarine cable which has a potential capacity of 1.28Terabits per second. Sudan Telecom (Sudate l) is also constructing a fibre link to Aswan (Egypt) via Haifa (along the river Nile) on the leg from Karma. Links to Kenya however run through the unstable southern part of Sudan (perhaps feasible in government controlled areas), and the planned route to Kampala (Uganda) would also have to traverse Northern Uganda which has also been the scene of a long standing insurgency (LURD). Sudatel is investing heavily in its national fibre backbone, and through this interconnects the long-haul bandwidth from SAS-1 cable to Jeddah and to the communication networks of Egypt (complete). The COMTEL project aims to ensure a link between the sub-saharan African countries and Egypt will also use Sudan s network. This routes from Nairobi Addis Ababa Khartoum Cairo, with a link from Addis to Asmara and Asmara to Kartoum (assuming the link from Ethiopia to the Eritrean capital is politically feasible).

44 Note: Logical drawing. Dotted orange lines indicate proposed projects, notably COMTEL and East African Submarine Cable. Green earth stations indicate ARABSAT Sub-Saharan Africa and the Middle East There is currently only one direct international fibre link from sub-saharan Africa to the Middle East. Djibouti is connected to the South East Asia - Middle East Western Europe II (SEA-ME-WE II) and SEA-ME-WE III cables. Ethiopia is in turn connected to Djibouti through a 34 Mbps digital microwave link (this route comprises a major communications artery from Addis Ababa to the port at Djibouti, as a result of the war with Eritrea). The South Africa Far East (SAFE) cable also provides connectivity between the two regions, running from South Africa to Malaysia and from there to Middle East, the Mediterranean and Western Europe via FLAG. The Sat-3/ WASC/ SAFE system is self -healing through this route. Otherwise, all traffic between the two regions is carried via satellite. There are two options for connectivity between these two regions. First, the proposed East African submarine cable could provide direct access to the Middle East from sub-saharan Africa. The proposed route running through Sudan or Djibouti would also link South Africa, Mozambique, Madagascar, Tanzania and Kenya. However, the implied costs of the Horn route balanced against the attractiveness of Seychelles and Maldives via India could favour this option. The second option is the proposed route via Ethiopia to Djibouti and Sudan which would provide onward connectivity to Egypt, Saudi Arabia via SAS-1, and SEA-ME- WE-II and SEA-ME-WE-III via Djibouti.

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46 1.3.5 South and East Africa The SADC (Southern African Development Community) Regional Information Infrastructure (SRII) identified at least 15 projects within the 14-country SADC region to close international gaps and upgrade existing links. Several options were considered for its ownership, including the formation of a regional company, but it was decided instead that the carriers involved in each country would secure the funding and implement projects themselves bilaterally, or appoint a third carrier to do so if one was forthcoming. Of the proposed projects, a variety have been built so far: mainly the links between South Africa and Namibia, and Botswana. There is also a fibre link to Zimbabwe, although the leg from the South African border to Gweru (Zimbabwe) comprises digital microwave transmission. This arrangement differs slightly from the conventional bilateral model: Telkom has installed the infrastructure at both ends, and is recovering the investment from Net*One (the Zimbabwean carrier) through an accounting rate arrangement which takes a cut out of revenues from both incoming and outgoing traffic until the cost is covered. Such an arrangement could serve as a model for other bilateral projects, although its attraction lies in the high volumes of international traffic that flow into and out of Zimbabwe. SRII planned infrastructure map

47 The East Africa Digital Transmission Project project was conceived in 1997, and aimed to see the deployment of fibre optic cable and microwave radio to interconnect the three countries of the EAC: Kenya, Tanzania and Uganda. Again, this project feeds on close regional co-operation. The three carriers of the region were to contribute to the cost, but additional funding was conditional on the pr ivatisation of all three operators, which has fallen through because of delays in privatising Telkom (Kenya), and could be superseded by the advent of COMTEL. According to the tender issued by the East African Telecommunications Companies in July 1999, the project had essentially two elements: Fibre optic links. The cable would thread through Tanzania, Kenya and Uganda, from Dar-es-Salaam - Tanga - Mombassa - Nairobi - Malaba - Kampala - Mbale - and Mbarara. The tender requirement was to lay the cable and sub-duct, together with associated civil works and services. Microwave radio links. Microwave would knit together the disparate nodes of the network, providing better connectivity and alternative routing in case of failure, linking Mombassa (Kenya) to Tanga (Tanzania), Nairobi (Kenya) to Arusha and Dodoma (both in Tanzania), and Masaka (Uganda) to Bukoba and Mwanza (both in Tanzania). The tender was to supply the radio equipment and antennae, synchronous digital hierarchy (SDH) multiplexing equipment, as well as the associated civil works and services. With the project as originally conceived having fallen through, a new model for the completion of this network is appearing - one in which each of the three operators build their own sections, which can then be interconnected. Telkom Kenya emphasised that it is strongly supportive of this project, and intends to roll it out as part of their strategic plan. Costing US$11.5m to build the Kenyan section of the network, this was estimated to take 13 months to complete and was scheduled to be ready before the end of Indeed, the route of this network will become the national backbone, as it route passes through the main cities and towns and will serve some 85% of national traffic. Also, Telkom Kenya s existing IP backbone connects Mombasa, Nyeri, Nakuru, Kisumu and Eldoret to Nairobi, and from there to the earth stations at Kericho and Longonot. The project also has the potential to enable Telkom to act as a regional hub. Should an East African submarine cable be built, this would interconnect to the national backbone at Mombasa. Not only would this provide an outlet for international traffic for Kenya, but interconnect to the Ugandan and Tanzanian networks. Thus Telkom could then provide bandwidth to the whole East African region perhaps even as far as Eastern DRCongo.

48

49 COMTEL is the embryonic telecommunications services company for the 21-country COMESA (Common Market Eastern and Southern Africa) region which aims to operate advanced voice and data services over a network that will stretch from Cape Town (South Africa) to Cairo (Egypt), predominantly with fibre, but also with some digital microwave or satellite links, especially in the early phases. The COMTEL project aims to traverse the following countries; Angola, Botswana, Burundi, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Madagascar, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Tanzania, Uganda, D R Congo, Zambia and Zimbabwe.

50 In November 2001, the projected capital expenditure for the project had increased 25% from US$172m to US$215m. COMTEL s ownership structure comprises 25% by national telecommunication operators ( NTOs ), 30% to a strategic equity partner (SEP) and the remaining 45% from private sector investors. This ownership structure is seen as pivotal to the project s success, because it overlaps with the need for national carriers to build or expand international capacity to their neighbours. The network will not be built from scratch, rather it will lease capacity on the backbones of national carriers, and only lay new infrastructure to interconnect these backbones where international links do not exist. A key factor is that the project is could interconnect with submarine cable landing points at Cape Town, Luanda (Angola), Maputo (Mozambique), Dar es Salaam (Tanzania), Mombasa (Kenya), Djibouti and Cairo (Egypt). In theory, the project will therefore tessellate with national backbones, and overlay other regional projects including SRII the East African Digital Transmission project, and submarine cables. COMTEL's core business will consist of providing a high quality carrier system for regional traffic in voice and data. Accordingly, wholesale telecommunications services will be charged at competitive rates via the licensed Comtel operator in each country. Leased circuit facilities will be available on regional and national basis for the national telecommunications/ict operators. Participation in company activities is not limited to COMESA countries only. Other African countries are at liberty to join. The Interim Board of Directors of CICL was formed during the 5 th meeting of the COMTEL Steering Committee. The Interim Board comprises D.R. of Congo, Egypt, Kenya, Malawi, Mauritius, Sudan and Zambia. Egypt and Kenya were selected as Chairman and Vice Chairman, respectively. The Eastern and Southern Africa Trade and Development Bank (PTA Bank) was appointed as Financial Advisors in the implementation process of the COMTEL project on a full project ris k basis. Subsidiaries will be established in other project countries depending on operational requirements of the network. The current proposal is to have COMTEL Limited with an authorised share capital of USD 300 million comprising 3 million shares (ordinary and preference shares) of USD 100 each. The COMTEL Communications share structure has been devised in such a way as to ensure that private investors will have majority equity shareholding. Shareholders will be national telecommunications operators (NTO) from the project countries, the strategic Equity Partner (SEP) and other corporate or institutional bodies. Share allocations consist of SEP 30%, Private Sector Investors 45% and NTOs 25%. The basis on which the private sector investors will be invited into COMTEL will be an offering prospectus prepared by the financial advisers of COMTEL. The private sector investors (PSI) will be invited into COMTEL Communications Company Ltd through an offering prospectus prepared by the financial advisers of COMTEL Project. The NTOs who need more shares in addition to that already allocated will be given first preference on the PSI shares window.

51 Based on work carried out by the PTA Bank, and on the basis of assumptions presented in the Business Plan, the COMTEL project proposal has been carefully analysed and found to be technically feasible, institutionally sound and financially and economically viable. The average project return on funds invested is in excess of 50% per annum while the overall Internal Rate of Return is projected at 44.34%. With an Economic Rate of Return (ERR) at 48.6%, COMTEL is forecast to have a positive impact to the sub-region's economies. Ten NTOs have so far appended their signatures to the COMTEL Investment Company Shareholders Agreement. Road shows are planned to the remaining NTO's to encourage them to sign the Agreement. In the same vein, negotiations for the signing of the COMTEL Interconnection and Co-operation Agreements will be undertaken. The regulatory environment of each of the countries will be examined in order to pave way for project implementation. The COMTEL Board/Steering Committee recommended that the Strategic Equity Partner acquisition process should be finalised by May 2003 followed by share subscription remittance by National Telecommunications Operators. Negotiations with potential partners are currently on going with the expectation of meeting the timelines as set by the Board. Anderberg International is the new management company that has been engaged to carry the project forward.

52 SRII/Comtel Infrastructure Combined Note: Orange = route of COMTEL, black lines indicate SRII.

53 1.4 Cellular operators Cellular operators have a requirement for a national transmission backbone to backhaul cellular traffic between base stations and to the mobile central switches. Cellular operators lease capacity on the backbone of incumbent operators where it is cost-effective but in many cases have had to construct their own transmission networks in order to backhaul traffic between base stations and switches. These networks use a combination of both microwave and satellite to reach more remote locations. In total cellular operators have invested in the region of over US$500m on the construction of these networks within the last five years. Cellular operators in most countries now have more extensive coverage than fixed-line incumbents, and a transmission network to reach these locations. Where the mobile operators have been unable to lease capacity on incumbent s backbone infrastructure, this is achieved either by deploying their own microwave transmission infrastructure, or the deployment of VSATs and leased satellite capacity to backhaul traffic around the country, or both. Nigeria and Kenya are clear examples. In both countries, the mobile operators had to approach the national carrier (NITEL and Telkom Kenya) for lines, but when unable to procure the allocation of E1 lines that they required, they have had to build out their own microwave infrastructure. MTN in Nigeria leased a whole transponder on one satellite to backhaul traffic - effectively a satellite backbone until it could build out its own microwave infrastructure in Nigeria. In November 2002, Vodacom International signed a fiveyear contract with Intelsat to lease C-band capacity on the IS -904 satellite so as to connect base stations and switching centres in the new markets of DR Congo, Mozambique and Tanzania. There are ten pan-african regional cellular operators 2 which are active in a number of countries with contiguous borders and are therefore in a good position to provide international backbones across these countries. Of these regional operators, three have contiguous borders within the East and Southern Africa regions: Celtel, MTN and Vodacom. A full inventory of the transmission network of mobile operators is beyond the scope of this study. However, as coverage grows the transmission networks begin to approach the borders in some countries (see map below). Taking into account that some of the transmission for this coverage is provided by satellite backhaul in more remote locations, it can therefore be inferred that the operators therefore have transmission to service coverage in these areas. Of particular note on the map below is that GSM coverage within East Africa is approaching a number of borders. 2 Celtel, Econet, Investcom, Millicom International Cellular, MTN, Orange, Orascom Telecom, Vodacom, Gloria Trust and Atlantique Telecom (formerly Telecel)

54 Source: The World GSM Coverage Map 2004, GSM Association. Data as of February In cases where mobile operators in contiguous neighbouring countries have been granted international licences, they have been able to build direct international links. For example, Celtel has done this between Brazzaville (Congo) and Kinshasa (DRC), and also between Uganda and Tanzania via Bukoba. MTN has been able to build links between Uganda and Rwanda, as it holds international gateway licences in both countries. Where they have not and/or there is a monopoly on international gateways, international traffic must therefore be routed through the incumbent. In the case of Celtel s cellular traffic from Zambia to Malawi, for example, although it might have coverage close to the border in both countries, it must route traffic through the Zambian incumbent Zamtel. Where traffic from cellular neighbouring countries is carried by satellite this also impacts on the quality of calls, and substantially adds to the cost for the customer with a mobile to fixed interconnect, international satellite carriage, then fixed to mobile interconnect charges.

55 Mobile Operators with contiguous borders in Eastern and Southern Africa Operator Countries International gateway licence? Notes Celtel Burkina Faso Chad Congo DRCongo Kenya Gabon Malawi Niger Sierra Leone Sudan Tanzania Uganda Zambia X X X X X X MTN South Africa Swaziland Uganda Rwanda Nigeria Cameroon X - - Vodacom South Africa Lesotho Mozambique Tanzania DRC X - - X Formerly known as MSI Cellular Investment, Celtel International has the largest mobile footprint in Africa, operating in 14 countries. It ha d about 4 million customers in 2004, and currently covers over 30% of African continent and 25% of the population. In Tanzania it recently acquired 35% of the incumbent national fixed line operator TTCL, together with the GSM licence. Celtel is also a major shareholder in mobile network operator, Mobitel Sudan, It was a founding shareholder and minority partner in Vodafone Egypt. Most recently in May 2004, Celtel acquired a 60 per cent stake in Kenyan operator KenCell Communication from Vivendi Universal, a dding 1.2 million subscribers to their user-base in a $250 million (Sh18 billion) deal. This also makes Celtel East Africa's only regional operator covering all three East African

56 Community (EAC) countries of Kenya, Uganda and Tanzania. Celtel intends to invest up to US$200 million in network expansion and the company is studying other opportunities for acquisitions. As can be seen from the map above, Celtel's operations have tended toward countries with contiguous borders and with the steady growth of its national networks, it is now in a good position to capitalise on establishing its own international infrastructure to move traffic directly across borders and to establish trans-africa backbone capacity. Celtel views land based infrastructure and backbones as an important investment need and the company could grow faster if more funds were available for this activity and regulatory constraints were relaxed. The cost of using existing monopoly backbones continues to be an issue 3, and especially as cell density increases, it becomes increasingly cost effective for Celtel to implement its own backbones rather than lease capacity from others. Celtel has international licenses in most of the countries it operates 4, and has so far developed cross-border infrastructure to link its subscribers in Tanzania with those in Uganda via Bukoba in north west Tanzania, and between Congo-Brazzaville and the DRC, via a microwave link across the River Congo (which now carries 6.6million minutes of traffic a year). Calls from its mobile networks in the the two Congos are charged at a local call rate, representing a saving of around 75% on the previous cost of calls and it plans to implement a similar system in East Africa. A backbone link between Gabon and Congo-Brazzaville (and thus to Kinshasa) is being implemented and will be complete before the end of the year. A subsidiary international carrier services company called Link Africa has also been established which provides telecommunication links for Celtel's international traffic, as well as providing services to other operators in Africa 5. The Group is looking to provide the missing links in Celtel's cross-border connectivity in the region, connecting the DRC 6 to Zambia and on through Tanzania and Malawi. This is a particularly cost effective route to establish as it lies along the population dense strip running through southern DRC and the Copperbelt and eastwards along the railway line to Dar es Salaam (see GSM coverage map). The regulatory environment in Zambia continues to remain an issue, as does access to SAT-3 in Gabon, for carrying the intercontinental traffic where it is still currently much cheaper to use VSAT due to the high tariffs charged by the incumbent Gabon Telecom 7. If an East African cable lands in Dar es Salaam using TTCL infrastructure Celtel would likely have a lower cost cross -continental route in the future. Another potential project would be to establish a trans-sahel backbone, linking Burkina Faso, Niger, Chad, Sudan, Uganda (and thus to Kenya and Ta nzania). A redundant ring could also be created by linking with the above Central African backbone by continuing South through Chad via Cameroun to Gabon, taking 3 Access to PTO infrastructure is not always an option in Zambia Celtel has been unable to use the incumbe nt Zamtel's infrastructure in many instances. 4 Celtel has international licenses in Malawi, Gabon, Congo-Brazzaville, DRC, Tanzania, Uganda, Niger and Sierra Leone. It hopes to obtain an international license in Kenya within a year. 5 Link Africa currently services clients in Burkina Faso, Burundi, Chad, Congo, Democratic Republic of Congo, Gabon, Gambia, Ghana, Guinea, Ivory Coast, Liberia, Madagascar, Malawi, Niger, Nigeria, Senegal, Sierra Leone, Tanzania, Uganda, Zambia. 7 Negotiations directly with the SAT-3 Consortium have also not been fruitful.

57 advantage of the Cameroun-Chad fibre backbone that has been laid along the oil pipeline there. Strategically, it is likely that an East African Community (EAC) backbone to interlink Kenya, Uganda and Tanzania may be the most achievable segment of the project initially, and Celtel has proposed building this infrastructure at various international meetings. The key barrier noted by the company is the limited competition in the international segment in the region. 1.5 Alternative infrastructure providers In addition to the terrestrial transmission networks of incumbent fixed-line operators, a number of other providers also own and operate telecom transmission networks for their own purposes. Besides cellular operators, these include electricity, pipeline, and railway operators. In several key places where gaps exist in the regional network, this alternative infrastructure already offers substantial telecom capacity which is currently being unused. In others, infrastructure is in place over which fibre infrastructure can be deployed. The electricity companies of Zambia (ZESCO), Zimbabwe (Powertel) in particular could interconnect at Kariba. Because of their often extensive network infrastructure, electricity providers in prime candidates to become alternative fixed-line operators when the fixed-line monopoly period ends in many countries. The telecommunication arms of South African Eskom and Transtel form the core of the Second Network Operator (SNO) and have invested substantially in the roll-out of their network across South Africa. Powertel is already leasing capacity to the Zimbabwean incumbent Tel*One, and has submitted a bid to apply for a fixed-line licence. In one or two cases these utility companies have obtained licences to provide wholesale services to other licensed operators, and in a few others they are leasing long-haul transmission capacity to telecom operators. Of particular interest for regional connectivity is Motraco, a joint venture company equally owned by the three traditional power utilities in their own countries, Eskom (RSA), SEB (Swaziland) and EDM (Mozambique). The pur pose of creating Motraco was to source power from Eskom and sell this power to the Mozal aluminium smelter in Maputo, Mozambique. Current transmission capacity is 1400MW and to manage this capacity requires robust telecommunications facilities (100% availability). Motraco, with power infrastructure crossing the borders of RSA, Swaziland and Mozambique has a fibre network with 24 fibres and currently has STM4 add-drop multiplexers. A 622Mbps facility therefore links Maputo, to Mbabane in Swaziland to Camden in RSA to interface into the Eskom Telecommunications network. Another route is via the Komatipoort border post to also interface with the Eskom Telecoms network thus forming a durable ring topology. The capacity available is much more than required power management and Motraco is keen to lease bandwidth (not fibre) to other operators. Motraco works closely with Eskom to form one integrated telecommunications network linking Maputo, Mbabane and Johannesburg.

58 Utility Service Providers that own or plan the development of infrastructure in Eastern and Southern Africa Operator Status Bandwidth Countries Notes Eskom Telecommunications NA South Africa Forming part of the SNO in South Africa. Transtel NA South Africa Forming part of the SNO in South Africa, regional infrastructure project implementation capability SASOL NA South Africa SASOL has some 800-km of optical fibre along its pipeline infrastructure from South Africa to Vilancolos in Mozambique. SASOL s 1,500-km pipeline infrastructure is centred in Gauteng, Mpumalanga and KwaZulu-Natal, and the operator is looking at expanding this network to Mozambique natural gas. The SASOL pipeline agreement provides for collective 50% shareholding for both South Africa and Mozambique. Kenya Data Networks Kenya Pipeline Company (KPC) Tanzania National Electricity Supply Company (TANESCO Tanzania-Zambia railway company (TAZARA) Tanzania Railways Corporation (TRC) Uganda Railways Corporation (URC) Copperbelt Energy Corporation (CEC) Zambia Electricity Supply Company (ZESCO) Powertel Communications Ltd - Kenya Planning to lay fibre optic cable between Mombasa and Nairobi. - Kenya Plans to deploy fibre optic cables along its pipeline network which distributes oil around Kenya. KPC already operates a pipeline network of over 900-km that links Mombasa to Nairobi, Kisumu and Eldoret on the Ugandan border, and issued a tender for licensed service providers to submit expressions of interest (closing date: 15 June 2004). The project is estimated to cost some KSh1.17bn (US$15m). - Tanzania Plans to deploy optic fibre along the national power grid - Tanzania, Zambia The Com -7 project proposed by ComAfrica has concluded exclusive rights of way for laying fibre optic cable within the railway reserve alongside the TAZARA tracks linking Dar-es-Salaam to Livingstone (Zambia) via Mpika, Mbeya and Iringa. Note: see Com Tanzania The TRC has applied to the regulator to provide telecommunication services along the central railway line from Dar es Salaam to Mwanza, littoral to Lake Victoria. Up to 34 Mbps 655 Mbps 155 Mbps Uganda Zambia Considered the possibility of establishing a wireless backbone along the main east-west railway line from Tororo (in the east) to Kasese (in the west). The railway s existing signalling system comprises a series of antenna masts located at apx.50-km intervals. 500-km network of optic fibre ground wire (OPGW) attached to CEC s grid of power lines connecting Zambia s mines in the Copperbelt region. All 220 Kv substations connected to the network at 655 Mbps. All 66 Kv substations connected to the network at 155 Mbps. Zambia ZESCO currently has fibre optic cable running from Katima Mulilo (Western Province) on the Namibian border to Livingstone (Southern Province) bordering Zimbabwe. It has a twophased plan to roll out further fibre along its powerline transmission infrastructure. Zimbabwe the Zimbabwe Electricity Supply Authority (ZESA) established a subsidiary called Powertel

59 Communications to provide broadband communication services as part of a drive to commercialise its non-core assets. Powertel provides long-distance communications, using fibre -optic cables along its power-line infrastructure. The national electricity grid is a more extensive network than the PSTN, and is furthermore connected via the South African Power Pool (SAPP) to a region-wide electricity distribution network. The company currently has seven service centres: Harare, Bulawayo, Mutare, Masvingo, Sherwood (near Kwekwe), Kariba and Hwange. Already, the ZPTC rents capacity on the Powertel link between Harare and Bulawayo, and is providing services to corporate clients. Submitted a combined bid in 2004 with Africom (licensed public datacomm operator) and Transmedia (national broadcasting signals carrier, spun out of the Zimbabwe Broadcasting Corporation (ZBC) to create a new company called Afritel to apply for a fixed-line licence from POTRAZ. Powertel is in a position to lease bandwidth for regional backhaul requirements. Key: Light grey shading indicates currently in commercial service. In commercial service. ( ) Some sections still in commercial service. X Out of commercial service, or abandoned project.? Roll out in progress. Future project 1.6 The drivers of African traffic demand Voice Accounts for Majority of Africa s International Traffic. Voice traffic still accounts for the highest proportion of Africa s international traffic. The volume of international voice traffic continues to grow. Between 1995 and 2001 the total outbound international traffic from Africa increased from 1.319bn minutes to 2.298bn minutes. In 2000, 2.036bn minutes of traffic were carried by 56,800 international telephone circuits. Not including international private leased circuits (IPLCs), Internet bandwidth accounted for just 1.5% of international traffic in 2002, and probably less in 2003 due to the continued growth of the mobile networks Use of Satellite. The growth in traffic coupled with the lack of intra and international links has reinforced the role of satellite. The pattern of upstream bandwidth supply and the slow roll-out of downstream connectivity leaves a considerable gap in the market for satellite-based suppliers in the short term: the African interior, Eastern and central Africa not yet reached by regional fibre projects, and those countries which do not have national transmission systems or Internet backbones (such as Angola and DR Congo). However, the existing satellites above east and southern Africa are heavily subscribed. There is simply not much capacity left, and it is increasingly difficult to lease capacity on them. Intelsat launched four new satellites with coverage over the continent in the last year and European operators have also directed a number of beams over Africa in the last two years Internet Access Predominantly By Satellite. A large majority of east and southern Afr ican countries obtain Internet access via satellite. In 2002 nearly all of Africa s international bandwidth was provided by satellite, except for those countries which are utilising submarine fibre-optic cables (Angola, Djibouti, and South Africa, and Lesotho via South Africa). Sudan has access to Saudi Arabia via the SAS-1 cable, but the operators are yet to use these for Internet bandwidth. The proliferation of ISPs and liberal international VSAT regime in some countries has created a

60 competitive market in which most Internet traffic and increasing VoIP traffic travels through these routes rather than Sat-3/ WASC. To the extent that satellite transmission is still a relatively expensive option for Africa its continued use is a function of more liberal and competitive VSAT regimes combined with the lack of alternative transmission options Carriers using VoIP. There is increasing uptake of VoIP to carry international traffic by east and southern African PTOs. The national European and North American carriers (primarily AT&T, MCI/Worldcom, British Telecom, France Telecom and Portugal Telecom) which have traditionally carried Africa s international traffic, have recently lost ground to a number of global wholesale VoIP carriers, notably ITXC, ibasis, Gateway Communications, and Deltathree. VoIP has allowed African carriers to reduce costs and maximise the (often meagre) bandwidth available on satellite links. Lower costs allow the PTOs to leverage existing satellite connections and also allows them to bypass the costly interconnection rates and the international accounting rate system, or to rebalance traffic inflows and outflows and recapture traffic lost to the grey market. Although still off a low base (about 2% of traffic in 2001 was carried as VoIP), cross-border VoIP traffic in Africa grew over 60% from Telkom South Africa has recently established a regional VoIP clearing house and it is expected that this and other initiatives will mean that voice traffic will increasingly be carrie d as packet data Grey traffic hides true extent of international traffic. An increasing proportion of international traffic is being carried using international VSAT by nonlicensed operators. Combined with carriers using VoIP, this accounts for growth in international traffic which is hidden from official statistics. In Africa, industry sources estimate the extent of this grey traffic to be between 10% and 70%, depending on the country. IP Telephony has facilitated the entry of small, informal providers operating in the grey market who bring traffic into and out of the country through refile and leaky PBXs connected to international VSAT links. Even some ISPs have taken advantage of their networks to provide these services. With PC to PC and PC to Phone Internet telephony, most of this traffic is inbound into Africa, against which neither regulators nor PTOs can protect. In Kenya, despite the strict monopoly on international traffic the Minister estimated in 2003 that Telkom Kenya could have lost up to US$1.6bn to the grey market. The Ghanaian Finance Ministry estimated in January 2003 that Ghana Telecom could be losing as much as US$1m per month in revenues to they flourishing grey market Mobile operators. Mobile operators have rapidly become the largest operators in country, and the explosive growth of mobile has seen subscriber bases eclipse that of fixed-lines in a growing number of countries. Increasingly, mobile operators are carrying more voice traffic than their fixed-line counterparts: by December 2003 Africa had around 52m mobile subscribers and 25m fixed-line subscribers. Where mobile operators possess international gateway licences, they are mostly using satellite to carry international traffic. Where they do not and must switch traffic through a monopoly PTO, that PTO s requirement for international bandwidth has increased. A key impact of this is that mobile operators are mopping up much of the remaining (C-band) capacity. Because of the volume of traffic, an increasing number of mobile operators are being licensed to operate their own international 8 Telegeography 2003

61 gateways and are carrying an increasing portion of the total international traffic. When MTN established a second international gateway in Rwanda it also said that it intended to provide bandwidth to ISPs. MTN Uganda also provides international Internet connectivity and also signed a deal exchange traffic with Gateway Communications in 2003.

62 Part 2: An overview of gaps in current plans Through the examination of the key sub-regional routes in section 1.2, the analysis of the underlying data identifies two types of gaps which exist for a rationalized regional network: Non-existent or low capacity international links, and Non-existent or low capacity national transmission backbone s. The map below highlights these gaps, with missing international links denoted by blue circles, and missing national backbones denoted in red circles.

63

64 These backhaul gaps are summarised in the table below. Gap Country Current Providers (Bold indicates monopoly) Planned Incumbent Networks/ Potential Projects (Green indicates planned) A Ethiopia ETC ETC COMTEL B Kenya TKL Telkom Kenya (TKL) Celtel COMTEL C Chad Sotelchad Celtel D Tanzania TTCL TTCL/Celtel COMTEL E Zambia Zamtel Zamtel Celtel COMTEL 1 Backhaul from Djibouti to Eritrea, Ethiopia, Somaliland STG, Djibouti Telecom Djibouti Telecom, Eritrea Telecom, ETC, STG and others COMTEL 2 Kenya Ethiopia TKL, ETC COMTEL 3 Kenya Uganda TKL, UTL Celtel COMTEL East African Digital Transmission (TKL, UTL, MTN) 4 Kenya Somalia TKL, TTCL COMTEL 5 Kenya Tanzania (1) TKL, TTCL COMTEL EASSy East African Digital Transmission (TKL, TTCL) Kenya Tanzania (2) TKL, TTCL Celtel/TTCL COMTEL EASSy East African Digital Transmission (TKL, TTCL) 6 Tanzania Zambia TTCL, Zamtel COM-7 COMTEL 7 Tanzania Malawi TTCL, MTL COMTEL SRII (Electricity providers) 8 Malawi Zimbabwe MTL, Tel*One, SRII TeleAccess 9 Zimbabwe Zambia Zamtel, SRII Tel*One, TeleAccess 10 Mozambique South TdM, Telkom SRII Africa Swaziland SA, SPTC Alternative Infrastructure Providers (Green indicates infrastructure currently available) Kenya Pipeline Company CEC ZESCO TAZARA Rail network ZESCO Dar es Salaam Ndola pipeline SAPP Power Lines Powertel Powertel ZESCO Motraco

65 Part 3: Creating an integrated regional network The exercise of integrating and rationalizing existing and planned infrastructure needs to respond to a number of different requirements: 3.1 User requirements The most rationalized network will only have one provider as this is undoubtedly the cheapest way to create a network. But experience has shown that having only one network infrastructure provider will not lead to competitive prices at an intra-regional or international level, any more than having a single monopoly provider at a national level does. Therefore it will not contribute to better access prices for all users and particularly lower business costs for Government and the private sector. Landlocked countries with only one external fibre operator will not be able to take full advantage of competitive prices. The danger is that they will find themselves in the hands of single regional hub operators who will become the gatekeeper for international bandwidth. With only one provider, it will not be in the interest of that gatekeeper To address this issue, the rationalized and integrated network needs to provide capacity where the price is not controlled by existing incumbent companies alone and/or there is at least one other competitive network. The landscape of African telecoms is changing very rapidly as market liberalization continues to deepen. In the future Second (or third) National Operators (SNOs), specialized wholesale carriers and cellular companies will likely play a far larger part in the development of infrastructure when they are given the opportunity to do so. Therefore the rationalized and integrated network shown in the map provided is superimposed over the top of all existing infrastructure. In addition to this infrastructure, also included are the proposed plans of EASSY, COMTEL and SRII; as well as the plans for electricity supply with accompanying fibre from the SAPP group and its members (Zambia s ZESCO, Zimbabwe s Powertel and Tanzania s TANESCO). Creating a competitive network will need both Governments and operators to adopt a more flexible approach to how the infrastructure is both owned and operated. For example, incumbent companies could lease capacity on the SAPP network. These electricity operators do not have international gateway licences and so cannot carry traffic across borders directly, however this can be resolved if the incumbent companies simply lease capacity from them as they do have international gateway licences. Alternative competitive access could also be provided by any cellular operator who wanted to create regional infrastructure, as well as via and fibre laid along railway or pipeline infrastucture. 3.2 Regulatory requirements Of the 21 countries affected by this study (see appendix A4), only seven have given international carrier licences to more than one operator. In three of these (Kenya, South Africa and Zimbabwe), the SNO licence has been granted but is not yet operational. In market terms, these countries vary from the relatively small (Uganda) to the very large (South Africa). Scale does not appear to be a barrier to the granting

66 of these licences. A small number of the remainder have plans to grant further international licences. Without an international licence, there is no incentive for privately-owned cellular operators and data carriers to build this kind of network. Governments and regulators have rightly welcomed the positive impact that competitive cellular companies have had on the provision of telephone services. Without competition of this kind at the national level, it is unlikely that the fixed line operators would have provided similar services. In regulatory terms, the argument is the same at the intra-regional level. There will likely need to be competition amongst different providers to finance intra -regional and international infrastructure. It is possible to argue that the existing market failure can be largely explained by the absence of this kind of competition. In the case of EASSy and COMTEL there are two separate sets of regulatory bottlenecks. For EASSy, the main bottlneck is the terms and cost of backhaul from landlocked operators to submarine cable landing stations. For COMTEL, the main bottleneck is that upstream fibre connectivity is restricted to either South Africa, Djibouti or Egypt and that it needs to transport international traffic through the entire length of the system (for example Botswana to Cairo) to reach the intercontinental landing point. COMTEL has the potential to resolve the backhaul problems for EASSy through a single operating company which would establish interconnect between carriers. EASSy meanwhile provides diversity in the landing point options and opens additional landing stations through Mozambique, Tanzania and Kenya. This creates shorter routes, less prone to failure, to submarine cable landing stations and also brings competitive pressure on other landing point operators. Africa lacks the kind of regional regulatory mechanisms found elsewhere. In Europe, if there is a competition issue with international infrastructure, the matter can be referred to the Competition Commission. Although this is not an ideal mechanism, it does provide some degree of regulatory oversight on international issues. There have been discussions within SADC and TRASA along these lines and it is important in the long-term that they reach a successful conclusion.

67 3.3 Technical requirements: The rationalized and integrated network shown on the map suggests a series of self healing rings between the proposed infrastructure providers. (eg Mombasa - Nairobi - Dodoma - Dar es Salaam - Mombasa; Dar es Salaam - Blantyre - Maputo - Dar es Salaam). The network would bear some resemblance to a ladder in which the rungs provided the redundant or self-healing elements. A self-healing ring allows sufficient alternative routings to enable the network to function, even if a part of the network goes down. Since the network must reflect African realities, it is vital that it contains a strong element of this kind of redundancy. The examples of the SAT3/WASC cable break outside Lagos and the destruction of a similar cable during an earthquake in Algeria illustrate the likely consequences. There would be nothing worse than having an infrastructure that became largely nonoperational because of a single break at any point.

68 Part 4: Implementing regional infrastructure ambitions the implications for obtaining finance The projects envisaged above represent between US$ million in required project financing. Whilst obviously the building of different sections of the network can be phased over five years, there is a clear need to build a substantial element of the network to kick-start the business. There are many different types of financing available for the type of capital infrastructure projects under examination. It is useful to draw a distinction between loan and equity finance as the former requires repayment of the original capital plus a fixed or variable rate of interest. The repayment terms may allow for holiday periods when no repayments are made. Also loan finance can be sought from a number of sources including those offering soft loans and in this way the overall rate of interest may be lowered. By contrast, equity finance is put up by shareholders who are looking for an ongoing return from their shareholding. In the case of large -scale capital projects, the shareholders will not expect to see a return for a number of years while the project is being built. However they will look for a return over the operational life of the project. For those wanting to build large -scale infrastructure projects, equity finance is probably kinder in financial terms. Returns can be geared over the medium-term. Subject to successful operation, equities are tradea ble and allow original investors to exit. This opens the possibility of new entrants like SNOs and mobile companies - participating as they enter the sector. The financing of these infrastructure projects might be packaged from a number of different e lements including: equity finance, bank loans, vendor-finance (loans from equipment manufacturers), company loans (from telcos), soft loans and donor grants. It is important to be clear what each type of financing is most appropriate for. Market financing through equity is designed to back projects that can generate a commercial return. Soft loan financing is in part designed as a market-gap mechanism for use where markets are simply too high risk or the market has not yet achieved potential for lack of investment. In this context, it might best be deployed where there is a clear argument that the market will not deliver a vital piece of communications infrastructure. Saving countries foreign exchange by lowering the costs of intra-african calling will ha ve a clear impact on the poverty level of a country. The purposes for soft loans and donor financing is often blurred but is helpful to have a clear sense of what each might achieve. On the basis of discussions with potential investors in infrastructure projects of this kind, the region presents a series of self-imposed hurdles. As the table in appendix A4 of international licences on the continent shows, there are very few countries where internationally competing licensed companies are in existence. Combined with the high level of state ownership in the sector, there are thus few publicly traded companies into which the market might invest for these kinds of projects.

69 With the current global market environment for telecommunications operators, as evidenced by the recent difficulties countries such as Kenya and South Africa have had in attracting foreign telecom operators as strategic partners, the existing incumbents into which investment might be made are (in the main) considered to be risky propositions. Furthermore, the terms of any investment would be subject to a degree of risk that could create difficulties for private institutional investors. And indeed in some instances, countries have expressed a desire to hold on to any investment of this kind as a vital piece of national infrastructure. In summary, neither the market nor the regulatory conditions are currently available that would encourage a sufficient degree of outside investment. Africa s need for investment in communications infrastructure of this kind is considerable and is could exceed the available soft loan and donor funding, even when projects have been prioritised. The current projects that form the focus of this study are simply the highways but they in turn will need to be connected by smaller roads or national infrastructure, for the network to reach its market potential. So there is an underlying additional set of costs that will also have to be met. There are two potential solutions to this problem. The first is to create special financing mechanisms through which development funds and the Governments of the participating countries offer the market opportunity to outsiders and provide the political guarantees required to encourage the market to invest. The second is to address the underlying market and regulatory issues through liberalising the markets themselves, thus allowing investors an opportunity to invest. Unfortunately the latter is not a speedy process and will not address current requirements, although is vital in the medium-term. Not all this market investment need come from outside the continent. Effective private sector companies like Safaricom and Sonatel have shown that it is quite possible to raise small but significant amounts through local markets. The difficulty at present is that most of the incumbents can only raise loan finance against assets and future revenues and this is inevitably more expensive than equity finance. Worse still, in some cases, those participating in some of the schemes described are a lready financially over-stretched. In these circumstances, the incumbents have only really one banker-of-last-resort, their owner, the Government concerned. Almost all of the Governments in question lack the resources to make investments on the scale required without themselves borrowing. So in many of these cases, the national contribution for the incumbent telco will be sought from institutions, most notably the World Bank Group. So again donor money risks being used to plug the inefficiencies of the current market. Ideally, market investment should be used to back those projects which can demonstrate a clear commercial return. Soft loan finance should be used to stretch the growth opportunities for those markets that hover on the wrong side of commercial return. However they might be capable of paying back lower rates of interest. Donor money could also be used to connect those countries where the market is simply too small to support an immediate market solution. In effect, the money is

70 used to ensure that those who might be passed by major infrastructure are not left unconnected. The challenge is to create the best possible circumstances for the participation of all three funding strands in ways that will deliver these kinds of objectives. Africa s future success in attracting external investment will not best be served by creating a finance structure that cannot demonstrate that at least part of its needs can be met through market finance.

71 Appendices A1. Summary of International Projects The following table summarises the current status of East, Central and Southern African regional, multilateral telecom infrastructure transmission projects in progress or completed (microwave and fibre optic). The projects are ordered by date. This does not include an inventory of all bilateral international links, although many of those which do exist are relics of the Panaftel network which may or may not have been upgraded. Neither does it include satellite connectivity or the location of earth stations, which account for the vast majority of international bandwidth supply. Project Date enter service Status Bandwidth Countries Notes PANAFTEL s (? ) Variable 45 African countries. First int l connectivity for most countries, predates satellite. Network remains in place, but has deteriorated. By 1990: - 39,000 km of radio relay links, - 8,000 km of submarine cable, - 39 int l switching centers, - 29 links or apx. 4,000 km of links remained to be installed X - South Africa, Cape Verde Submarine cable. Sat-1 Retired in 1993 Tenerife Portugal Sat ? 565 Mbps South Africa, Spain, Portugal Out of service Submarine cable. SEAMEWE SEAMEWE -II Out of service X - - Submarine cable. Out of service 1994? 565 Mbps Djibouti Egypt, Algeria Submarine cable. Tunisia SEAMEWE -III 1999? 40 Gbps Djibouti, Egypt, Morocco, Su dan via Jeddah/SAS1 Submarine cable. SEAMEWE -IV FLAG Europe Asia (FEA) FLAG Falcon? 1.28Tbps Egypt, Sudan via Jeddah/SAS1 1997? 80Gbps Egypt, Sudan via Jeddah/SAS1 Submarine Cable Submarine cable. 2005e? 1.28Tbps Egypt Submarine cable, Ready for Service (RFS) date early 2005

72 Project Oxygen SADC Regional Information Infrastructur e (SRII) - Short term 2000 X 640 Gbps Submarine cable encircling Africa, 101 landing points worldwide. Underw ay??????? (? )? 34 Mbps 622 Mbps 155 Mbps 155 Mbps 155 Mbps 622 Mbps 2.5 Gbps 34 Mbps 2.5 Gbps South Africa Lesotho (i) South Africa Zimbabwe Namibia Botswana Botswana Zambia Namibia Zambia Botswana Zimbabwe Zambia Zimbabwe Malawi Zimbabwe Malawi - Tanzania Project abandoned. Completed Completed Work in progress Work in progress Work in progress Work in progress Work in progress Upgrading to 155 Mbps Under discussion SRII - Medium term Underw ay???? NA?????? 155 Mbps 155 Mbps 155 Mbps 155 Mbps 155 Mbps 622 Mbps 622 Mbps 622 Mbps 622 Mbps 622 Mbps 622 Mbps 2.5 Gbps South Africa Lesotho (ii) South Africa Lesotho (iii) South Africa Swaziland South Africa Swaziland (ii) South Africa Mozambique South Africa Botswana South Africa Namibia Botswana Zambia Namibia Zambia Mozambique Zimbabwe Malawi Zimbabwe Malawi Zambia Completed Completed Completed Completed NA Completed Postponed Upgrade from 155 Mbps Upgrade from 155 Mbps Upgrade from 34 Mbps Upgrade from 155 Mbps NA SRII - Long term???? NA NA NA NA Namibia Zambia Namibia Angola Angola DRC Angola - Zambia Under discussion Under discussion Under discussion Under discussion Med Nautilus Sat- 3/WASC 2002? 40 Gbps Egypt Submarine cable. 2002? NA 45 Mbps NA Angola Benin South Africa Submarine cable. Max 120 Gbps SAFE 2002? Max 130 Gbps COMTEL 2006/7? Max 120 Gbps Mauritius, Reunion, South Africa, India, Malaysia. COMESA countries: Angola, Burundi, Comoros, DRC, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, Zimbabwe. Submarine cable. Project would use terrestrial backbone infrastructure of the operators in the region.

73 COM -7? NA Tanzania, Zambia, Namibia, South Africa AfricaONE Phase 1 X Max 80 Gbps South Africa, Namibia, Angola, DRC, Congo, Nigeria, Togo, Ghana, Cote d Ivoire, Mauritania, Morocco Use route of railway from Dar es Salaam (Tanzania) to Livingstone (Zambia), and then interconnect to Malawi, Telecom Namibia and Botswana s fibre network and in turn connect to Sat- 3/WASC landing point Cape Town for international capacity. Route from Dar es Salaam - Livingstone, would then connect to Katima Mulilo. Project abandoned. AfricaONE Phase 2 X Max 80 Gbps Algeria, Tunisia, Libya, Egypt, Eritrea, Saudi Arabia. Project abandoned. AfricaONE Phase 3 X Max 80 Gbps SAS ? Max 1.28 Tbps Proposed East African Submarine Cable Djibouti, Kenya, Tanzania Madagascar, Mozambique South Africa. Sudan, Saudi Arabia 2005?? N/A South Africa, Madagascar (Mahajanga), Tanzania (Dar es Salaam), Kenya (Mombasa) then either: - Djibouti; or - Seychelles, Maldives, India. MOTRACO 2003? 622Mbps South Africa, Swaziland, Mozambique Project abandoned. Route of phase 3 similar to that of proposed East African submarine cable. Submarine cable. Operational network over the national power grid.

74 East Africa digital transmission project -? - Kenya, Uganda, Tanzania Project delayed - Telkom Kenya investing US$11.5m in the roll out of Kenyan section of network as a national backbone. Was due for completion end MTN Uganda building fibre from Kampala to Kenyan border, had reached Jinja by Sept Kenya Pipeline Company could add fibre to its network from Mombasa to Ugandan border Intercontinental Submarine Cable Links Although few cross-continental and international submarine fibre cable links currently service east and southern Africa, three countries in the region do have access via the SAT-3, SAT-3/WASC/SAFE and SEA-ME-WEA systems. These are Angola, South Africa and Djibouti. South Africa already has international links to some of its bordering countries which use the SAT-3/WASC/SAFE system, and Djibouti is in the process of building backhaul links to Somalia and Eritrea for use of the SEA-ME- WEA and ultimately the EASSY cable. Sat 2

75

76 SEA-ME-WE II and III

77 FLAG Europe Asia (FEA)

78 Sat-3/ WASC The Sat-3/WASC/SAFE project became operational at the end of May It is split into two segments: Sat-3/ WASC, which runs from South Africa to Portugal and is a successor to Sat-2; and SAFE which runs from South Africa to Malaysia. In both cases, the fibre has already been laid and was commissioned in early Sat-3/WASC has an ultimate capacity of 120 Gbps, and was supplied by Alca tel submarine networks. Initially, it will have a capacity of 20 Gbps, but because this is already fully subscribed, it is in the process of being upgraded to 40 Gbps a capacity which will become available not later than June (need to update dates/information since we re already in 2004) The cable is owned by a consortium comprising 35 operators, including a number of African carriers where there are landing points (so NITEL in the case of Nigeria?). Each of these carriers owns capacity on the cable, based on a pro rata scale depending on their respective level of investment. In addition, there is a pool of unused capacity which these operators do not require in the immediate future. Capacity in this pool can then be used by one of the owners, or by other operators. Non-owners can therefore obtain capacity in one of two ways: First, they can do so from the national carrier in that country which is an owner of the cable. A prerequisite for direct access is that such operators are licensed to carr y international traffic, so typically mobile operators will be able to but not ISPs which would just lease more capacity from the carrier (which in turn has greater international bandwidth).

79 Second, operators can buy directly from the pool and therefore bypass that carrier, through an Indefeasible Right of Use (IRU) from the cable s network administrator which is Telkom. However, the national carrier has first right of refusal. More so, in order to allow carriers to recover their investment into the cable, they enjoy exclusivity for the first five years. This could mean that operators would be forced to buy capacity from the incumbent carrier, which could therefore charge whatever price it likes. But in order to protect the buyer, carriers cannot charge more than the pool price (do you have any figures on pool or other prices for SAT 3 access? Alcatel was awarded a US$33m contract in April 2002 to upgrade the Sat3/WASC/ SAFE system by 10 Gbps. This will add one wavelength between Portugal and South Africa. The system has four wavelengths at 2.5 Gbps connecting the West African countries and five wavelengths at 10 Gbps directly connecting Portugal and South Africa.

80 SAFE SAFE has an ultimate capacity of 130 Gbps, of which an initial 10 Gbps was made available. The supplier for this segment was Tycom submarine cable systems (USA). Again, this capacity is being upgraded to 30 Gbps. In both cases all of the fibre is lit, and so this upgrade is to the repeater stations along the route, with the additional capacity achieved through wavelength management.

81 Owners of the SAT-3/SAFE cable ners of Sat-3/WASC/SAF 13. Angola Telecom 14. AT&T Corp (USA) 15. Belgacom SA 16. Communications Global Network Services Ltd (BT) 17. Cable & Wireless Global Network Ltd 18. Camtel 19. China Telecom 20. Chunghwa Telecom Ltd Co 21. Côte d Ivoire Telecom 22. Cyprus Telecommunications Authority 23. Deutsche Telekom AG 24. France Telecom 25. Ghana Telecommunications Co Ltd 26. Global One Communications Holdings Ltd 27. Maroc Telecom 28. Korea Telecom 29. KPN Royal Dutch Telecom 30. Marconi (Portugal) 31. Maurutius Telecom Ltd 32. MCI Worldcom International Inc 33. Nigerian Telecommunications Ltd 34. OPT Benin 35. OPT Gabon 36. Reach 37. Singapore Telecommunications Ltd 38. Societe Nationale des Telecommunications du Sonatel (SONATEL) 39. Sprint Communications Co LP 40. Swisscom Ltd 41. Telecom Italia SpA 42. Telecom Namibia Ltd 43. Telefonica de Espana SAU 44. Teleglobe (USA) Inc 45. Telekom Malaysia Berhad 46. Telkom South Africa 47. The Communications Authority of Thailand 48. Videsh Sanchar Nigam Ltd (India) (VSNL)

82 SAS-1 Sudatel and Saudi Telecommunications Corporation (STC) have completed a submarine cable connecting the two countries, from Port Sudan to Jeddah (Saudi Arabia). Global Marine Systems and BT are the initiators of this system, and a joint venture company Arab Cables Company has been created between the Saudi authorities and the Arab Investment Company to implement the project. Sudatel holds a 40% stake in Arab Cables Company.

83 Proposed East African Submarine Cable A2. National Profiles of the Key Markets in East and Southern Africa A2.1 Angola Voice services are restricted to the national operator, Angola Telecom, and the 4 new fixed licensed operators. The extremely poor state of the telephone network, even in the capital, Luanda where the public exchanges are saturated, severely hampers widespread use. Unreliable analogue links to Cabinda and Benguela mean that there are intermittent service failures. A fibre network is planned for Luanda and extensive digitalisation of switches is occurring in Luanda and around the country, including Canaan and Capuaco. A satellite based network linking Luanda, Cabinda, Benguela, Namibe, Lubango and Ongiva is being financed through Caisse Francais de Developpement. A2.2 Congo DRC Much of the fixed line telecoms infrastructure that was in existence was destroyed or damaged during the civil war, and as a result the number of lines in operation dropped from 36,000 in 1996 to around 21,00. The analogue network of the state-owned incumbent L'Office Congolais des Postes et Télécommunication (OCPT) is limited to the main cities of Kinshasa, which has some two-thirds of the lines in operation, Lubumbashi, Kisangani and Matadi.

84 The OCPT has recently entered into a series of joint ventures with foreign partners for particular expansion projects. For example, Congo-Korea Télécom was created in 2001 as a joint venture between OCPT and five Korean firms including Korea Telecom, Samsung, SDS Corporation and Il Jin Corporation, and OCPT has also entered into partnerships with Millicom and Paconet. In another project the OCPT is working with Rutel to establish public access facilities country-wide. The government intends to restructure and then privatise OCPT at some point in the future, but no firm details available. Most of the infrastructure which exists provides communications for the government administration. Very individuals have their own fixed lines, many businesses do not, and foreign companies operate their own independent networks. Gecamines, the state - owned mining company for example, operates its own network in the Katanga province. The fixed line sector has since been opened up to the private sector for value added services, and a number of public call box operators have emerged to resell OCPT capacity. In addition, to cater for the unaddressed demand for basic (voice) telephony, the government has issued eight mobile licences and a number of the data/ Internet service providers (ISPs) are also specifically authorised to use VoIP. Africanus.net, which launched services in 2001 using Airspan to provide a wireless DSL network, and it offers international VoIP services calling cards. Pan African Communications Network (Paconet), a regional IP operator, has obtained licences to operate international VSAT gateways and wireless local loop (WLL) networks, and has in addition been granted a licence to operate VoIP services in conjunction with OCPT. A2.3 Botswana The national operator BTC has a monopoly on fixed voice services. It has completed a fibre-optic ring around the country. Built in four stages, the last phase was completed in the mid 1990s - the urban axis project from Lobatse to Francistown via Gaborone. Rural communities have been reached by breaking out spurs from this ring. BTC continues to roll out copper infrastructure, but is increasingly making use of wireless local loop (WiLL). BTC awarded a digital enhanced cordless telephone (DECT) based WiLL contract for voice services to South African firm Alcatel Altech Telecoms. The corporation s core transmission backbone comprises mainly of Frame Relay, with a minimum of X.25 which is being upgraded to Frame Relay. Gaborone and Francistown have STM-1 ATM nodes. This forms a ring around the country: Ramatlabama (on South African border) to Francistown: SDH STM-16 fibre. Gaborone to Jwaneng: 2 x 140 Mbp/s PDH fibre. Jwaneng-Gantsi; Gantsi-Maun; Maun-Orapa: 140 Mbp/s PDH microwave radio, dropping 2Mbp/s at many villages along the links. Orapa-Serowe; Serowe-Palapye: 140 Mbp/s PDH fibre. Maun to Francistown: 34 Mbp/s microwave radio link.

85 In addition, there are 34 Mbp/s spurs running our from this network from Jwaneng to Tsabong, from Francistown to Kasane, and from Maun to Mohembo. Botswana is landlocked and does not therefore have any direct access to submarine fibre. Its international capacity comprises of satellite links and bilateral links with its neighbours. These include: South Africa: SDH STM-4 fibre link through Ramatlabama; 140 Mbp/s PDH microwave link through Mochudi. Namibia: SDH STM-1 microwave link through Mamuno; option for a 34 Mbp/s microwave link through Mohembo. Zimbabwe: 120 channel analogue microwave link through Ramokgwebana. Zambia: 120 channel microwave link through Kasane. VSAT is regarded as a value added service and has been liberalized. The re gulatory authority, BTA emphasises a technology neutral regulation. A service license is required to utilize VSAT equipment. Receive only terminals are not regulated. There are 14 licensed operators that provide data communication services. For type approval, the operators are required to produce test results from accredited labs. A2.4 Ethiopia The Ethiopian Telecommunication Corporation (ETC) is the incumbent public telecommunication operator and has a monopoly over all telecommunication services in the country (fixed, mobile, Internet and data communications). In recent years the Government has been planning to partially privatize ETC, aiming to allow the participation of a strategic investor. Notwithstanding improvements in recent years, the telecommunication network in Ethiopia is still among the least developed in the world, despite the 20 per cent growth realized in the last two years. Further improvements are taking place as ETC is planning to connect new lines. However, there is a large difference among urban and rural areas, with about 60 per cent of telephones concentrated in the capital city, accounting for less than the three per cent of the total population. The domestic network backbone is based on microwave links, analogue or digital, connecting almost all the regions of the country. Analogue lines are being gradually substituted with digital lines by ETC, which is developing several projects to extend digital links at least to the larger cities in the country. To complete the na tional network, in 1994, four high-capacity (comprising 60 channels) DOMSAT (domestic satellite) ground stations were installed in Addis Abeba, Humera, Mekele and Gode. For its international terrestrial links, ETC operates a 155Mpbs digital microwave link to Sudan and a 34Mbps link to Djibouti. A link with Somalia is planned. There is also an old 60-channel analogue link with Kenya, while Eritrea's analogue link was severed during the war and has not yet been restored. The terrestrial circuits link Ethiopia to more than 20 countries through the PANAFTEL microwave network, in particular to other Southern and Eastern countries (Djibouti, Kenya, Uganda, Zambia

86 and Tanzania). Most other international traffic is catered for via the Intelsat satellite earth station which currently has a capacity of channels. International traffic has shown steady continuous growth in the past ten years. The main destinations for international calls are Europe, followed by United States and Asia. ETC had a total international outgoing minutes in 2001 of and incoming minutes of These generated a total international revenue of Birr As for many other countries, international traffic (and especially incoming traffic) represents one of the major sources of revenue for ETC. In 2001, a satellite-baesd digital data network (DDN) service was developed which now provides the underlying infrastructure for ETC's Internet service and provides other data-related services such as ISDN, data transmission for banking networks and distance education transmissions, in the near future. A total of 9 cities have been commissioned (Jimma, Bahir Dar, Mekelle, Desale, Sheshemene, Awessa, Nekemti, Nazareth and Dire Dawa), with a further 6 points of presence (PoP) located in the Addis Abeba area, including one ISDN switch in Arada. The network links between the PoPs are 2Mbps and local links can be provided at up to 1Mbps. A2.5 Kenya The new government has committed itself to fully liberalising the telephony market this year. The previous sector policy enunciated by the CCK in 2001 provided for the opening up of the local loop (except in the capital, Nairobi, where a five-year monopoly was granted), and the institution of a five-year monopoly to state -owned incumbent Telkom Kenya (licensed in 1999) in both the long-distance and international segments. The new government is changing this framework and is removing all the restrictions that will hopefully create new opportunities in international, national, VSAT markets as well as the local loop. Liberalisation of the local loop occurred in 2000, with the licensing of three Regional Telecommunications Operators (RTOs). This provided for the introduction of competition in nine geographic areas based on provincial boundaries, with Telkom retaining the monopoly in Nairobi. The RTO licences provide for one alternative carrier per region, in which they can offer local services, but must interconnect to Telkom s network for long-haul traffic. Airtel Communications Kenya, in which Telecommunications Consultants India (TCIL) holds a 30% stake, secured licences in five - Western, Nyanza, Coast, South Rift and Central regions - for a total of USD29.1 million. Safitel paid USD9 million for licences in two regions, Eastern Region and North Rift and Bell Western paid USD525,000 for the RTO licence in North Eastern Province. However, the operators have been unable to commence operations having been thwarted by interconnection issues with Telkom, the inability to connect directly to one another, to bypass Telkom as the use of VSAT does not permit this, and financial problems encountered because of delays caused by these regulatory issues. In the meantime the government has launched tenders for second national operator (SNO) which was to be licensed by July 2004.

87 Over the period, Telkom Kenya unveiled an investment programme worth USD443 million. This plan aimed to achieve 100% network digitalisation; increase exchange capacity by 430,000 lines, and increase the number of payphones to 24,000. It also enhanced the backbone transmission system, improved IT systems, installed a prepaid billing system and provided plans for the migration to a next-generation network (NGN). Telkom s international connectivity is achieved through satellite links. However, the operator is pushing ahead with the deployment of its section of the East African Digital Transmission project. Originally, this was a joint venture with its counterparts in Uganda and Tanzania, UTL and TTCL which fell through. However, as part of Telkom s strategic plan, it is rolling out this network at a cost of USD11.5 million and is scheduled to be ready before the end of This network will become the national backbone, as its route passes through the main cities and towns and will serve some 85% of national traffic. Telkom s existing IP backbone connects Mombasa, Nyeri, Nakuru, Kisumu and Eldoret to Nairobi, and from there to the earth stations at Kericho and Longonot. Kenya Power and Lighting Co Ltd and Kenya Oil Pipeline Ltd are also gearing to build fibre in the near future in competition with the other mainstream telecom operators. In December 2001 the regulator, CCK issued the first competing national VSAT licence to Gilat Alldean, allowing Gilat Alldean to offer services to network operators and closed user groups, charging a monthly access of US $ 300 to US $400 depending on the number of sites. Telekom Kenya has a similar service and pricing. A2.6 Mozambique The incumbent, TDM is expected to be privatised shortly. It is in the process of migrating from legacy analogue switches to modern, digital systems which are now operational in southern, central and northern Mozambique. By the end of 2003 there will be five fibre optic rings (an extra 111km) in Maputo, and the backbone will expand to cover seven of the ten provincial capitals (plus a town on a major economic corridor) using links to the submarine fibre optic cable, inland fibre optics and digital hertzian beams. By 2006, all provincial capitals are to be connected to this backbone. As part of this project, TdM awarded a contract to Alcatel to deploy a submarine fibre optic cable to connect the main economic centres of Maputo and Beira via Xai-Xai, Inhambane and Vilanculos. This 1,000-km submarine cable uses dense wavelength division multiplexing (DWDM) and has a capacity of 2.5 Gbps. In the next five years a terrestial backbone project will reach Quelimane, Angoche, Nacala and Pemba, and include links to the hinterland cities of Chimoio, Tete, Nampula, Lichinga and Cuamba, via three inland links, the first between Manica, Tete and Songo; the second between Quelimane, Cuamba and Lichinga; and the last between Cuamba, Nampula and Pemba. The carrier s international connectivity comprises microwave links with South Africa, Swaziland and Zimbabwe. TDM operate a 155 Mbps SDH link with South Africa and

88 the proposed East African submarine cable would also link Maputo with South Africa, as well as Tanzania, Kenya and Djibouti, and providing onward crosscontinenta l upstream connectivity. Network services, including VSAT, have been liberalised and are subject to licensing by INCM. There are currently more than 10 operational ISPs in Mozambique, the most significant being Teledata, CIUEM, Tropicalweb, Virconn, Emil, TDM, CFMnet, TVCabo, Intra, Dataserv, SATCOM, and GSTelecom. Whilst Teledata, a joint venture between Telecomunicações de Moçambique (TdM) and Portugal Telecom, is the only official international data services provider, ISPs can use international VSAT and wireless links for data and the cellular operators are licensed to operate international VSAT gateways for voice traffic. A2.7 Tanzania Tanzania Telecommunication Company Limited (TTCL) was privatised in June 2000, and Zanzibar Telecommunication Limite d (Zantel) was granted a competitive fixedline licence, allowing it to operate in a duopoly alongside TTCL on the island of Zanzibar, and from this year on the mainland. TTCL has reportedly fallen behind in the roll out of its transmission backbone. Of ten planned systems, only one has been built, the Namanga-Arusha. The rest, including the Dar es Salaam -Arusha, Dar es Salaam-Mtwara, Arusha-Mwanza, Mwanza-Geita and Mtwara-Lindi systems, have yet to be installed. Currently TTCL and Zantel are the only oper ators allowed to transmit voice over their networks. This is expected to change in February 2005 when the exclusivity period granted to TTCL ends in February 2005 and data operators will be allowed to utilise VoIP. Data services used to be the preserve of Datel, a former subsidiary of TTCL, however TCC has issued further public data communication services licences to: Wilken Afsat, Equant Tanzania, Simba Net Tanzania, Softech/Satcom and Fastcom Africa. These companies are allowed to install international infrastructure for data communication purposes but not yet for voice. Afsat-Wilken operate a number of traditional C-band VSAT services for large clients and are also the local agent for the Hughes Direcway Ku-band VSAT Internet service via a hub in Germany. Approximately 250 Ku-band terminals have been installed, of which about 70% are in rural areas being used mainly by businesses and the tourist/lodge sector. A2.8 Uganda Until 1996, the sole incumbent was state -owned PTT Uganda Post and Telecommunications Corporation (UPTC) which had 50,000 lines in service. The entry of MTN Uganda in October 1998 as both a fixed and mobile provider reinvigorated of the market leading to a reduction in cellular tariffs and a rapid rise in customer levels. The government then restructured UPTC, and its fixed line successor Uganda Telecom Ltd (UTL) was privatised in 2000.

89 Since 1996 the PSTN has expanded to cover all but two districts of the country. Although MTN is a national operator, it elected to deliver services over a GSM platform and the distinction between fixed or mobile is therefore largely irrelevant. In order to enhance further expansion, particularly in rural areas, the government launched a rural telecommunications initiative in 2001 which aimed to take broadband communications to all districts within five years. The project is financed by a combination of support from development partners and rural telecommunications funds. The government privatised the national operator by selling a 51% stake to a st rategic equity partner for USD33.5 million. The Ucom consortium which won the bid comprises mobile operator Telecel (20%), Egyptian conglomerate Orascom Telecom (60%) and the German consultancy Deutsche Telepost Consulting (Detecon) (20%). When the consortium took control, the licence it received came with the condition to invest USD110 million and to increase the number of fixed lines to 100,000 within five years. This is unlikely to be fulfilled within the specified period. MTN Uganda is a joint venture between MTN (South Africa) which holds a 50% shareholding, Telia Overseas which holds a minority (30%) shareholding and other smaller investors. A2.9 Zambia The Zambia telecommunication Company (ZAMTEL) remains the exclusive provider of fixed line services in the country. While the provision of this service has been theoretically opened, the license for entry to the market is expensive - approximately US $ and it is also subject to Government tender through the Ministry of Communication and Transport. The Communication authority is now reviewing this entry requirement and it is expected to be reduced to attract more players, especially those who are willing to offer their services in the rural and underserved areas. The fixed network in Zambia has improved substantially over the last few years, but is still at a very low level of development. One private power company, the Copperbelt Energy Company (CEC) has installed a 24-core fibre that covers about 520 kilometers, but there is still a need to link the Copperbelt province network to Lusaka. The National Power Company, Zambia Electricity Supply Company (ZESCO) has approached other telecommunication companies for a joint venture to establish a telecommunications network using its infrastructure. Two options for fibre-based international links are being discussed. One would be through Zimbabwe and the other through Namibia or Botswana. The national power company has fibre optic cable that runs from Katima Mulilo in Western Province to Livingstone in the Southern Province. The fibre optic line in Katima Mulilo could be linked to the fibre backbone in Namibia or Botswana and then to the SAT 3 cable. There is also the fibre optic backbone in Zimbabwe that terminates at the Border town of Kariba in Zimbabwe and is part of the Power Grid that links Zambia and Zimbabwe. This cable would then be linked to Kafue Gorge Power Station and join

90 the already existing fiber that links the Kafue Gorge Station to Lusaka. This would then link the country via Zimbabwe to the SAT 3 cable. The cost of the two options is estimated in the range of US$ 2.5 million to US$4.0 million. A2.10 Zimbabwe The Zimbabwe Post and Telecommunications Corporation (ZPTC) was dissolved in 2000 and split into four separate parts. These were a fixed-line entity (TelOne), a mobile operator called NetOne, a postal services unit and a manufacturing arm. In early 2002 the government attempted to privatise the operator through the sale of a 30% stake to a strategic equity partner, a process that has yet to be concluded. While other international carriers have been licensed, recent announcements by the government have instructed that all independent international gateways must cease operations and go through the incumbent TelOne's hub. TeleAccess, a Zimbabwean company, was eventually awarded a second carrier s licence in December Telconet has applied for a licences, and by February 2003 had begun marketing these services for low cost international calls. Telconet also plans to lay its own fibre-optic infrastructure, initially in Harare and then in other centres. Both mobile operators Econet and Telecel were authorized to operate their independent international VSAT gateways, but the reissuance of their operating licences by POTRAZ during 2002 caused a dispute centred on this issue. Econet, which launched its own ISP called Ecoweb in March 2000, has been a bandwidth provider to other licensed operators including Icon Internet, for example, which began using Econet's gateway called Globalink from mid One ISP, Zimweb Internet, was closed down in December 2001 over this issue, as it had been procuring its own international bandwidth through a VSAT link. Unable to pay for a licence or the subsequent fine that was imposed on it, the ISP was forced out of business. Being entirely landlocked, TelOne procures most of its upstream international bandwidth by satellite. However, a bilateral deal with Telkom South Africa under the auspices of the Southern Africa Development Community (SADC) Regional Information Infrastructure (SRII) project, has seen the installation of a new international link via Beitbridge. This link comprises a fibre optic cable on the South African side, and a microwave link on the Zimbabwean side to Gweru. Under the bilateral arrangement, Telkom has paid for the installation of the link and recoups this investment from traffic on the route. First established in 1995 as Kingcomms, Africom was issued the first public data network licence under the new licensing regime in November This cost USD2 million. Africom says it is investing some ZD800 million in the roll out of its network and has awarded contracts to Alvarion and 3Com. Its network was to be rolled out in five phases: Harare, Chitungwiza and Bulawayo within six months; Gweru, Masvingo, and Mutare in the next six months; Beitbridge (on the South African border), Bindura, Chinhoye, Hwange, Kariba, Kwekwe, Maronera, Plumtree, Rusape, Victoria Falls, and Zvishavane in the following six months; followed by 20 further centres and eventually a full national roll out.

91 Powertel Communications Ltd is a subsidiary of the Zimbabwe Electricity Supply Authority (ZESA) Holdings which was established in The operator leverages ZESA s infrastructure, and operates a tele communication service using fibre, copper, power line carrier and radio. Using fibre -optic cables strung along ZESA s power line infrastructure, Powertel is a provide of long-distance and broadband communications. In 2002 Powertel awarded a contract to Huawei Technologies to supply a national optical transport backbone. This backbone will form a 1,400km national fibre transmission ring. A2.11 South Africa In 1997, the PTO, Telkom was issued a license to provide all public switched telecommunications services for a minimum of 25 years, including an exclusivity period of five years which ended May Under this license Telkom is authorized to provide national long distance telecommunications services, international telecommunications services, local access telecommunication services and public pay telephone services. In 1997, Telkom began an extensive five year capital investment program with total fixed-line investment for the five years ending March 31, 2002 at R41.7 billion, of which R27.9 billion was for network modernization and line roll-out in order to comply with license obligations and to prepare for competition. Telkom has recently implemented a Voice over Internet Protocol (VOIP) network which terminates calls of international voice carriers into its fixed-line network. The network can terminate more than sixty media gateways, or 21,000 voice circuits, and is presently transit switching VOIP calls to four African countries. A marine fibre optic cable connecting South Africa to Europe was established by Telkom in 1980s (SAT-2) but is now fully utilised at 1Gbps. As part of an upgrade and broader strategy to become a hub for Africa, Telkom invested approximately $85 million in the SAT-3/WASC/SAFE submarine cable system. The km cable is a combination of two distinct projects, the South African/Far East (SAFE) cable, which connects Cape Town to India and Malaysia via Mauritius, and the SAT-3/West African Submarine Cable (WASC), which links Portugal to SA, with landing points in eight African countries along the way. Telkom has the right to approximately 20% of the combined capacity on the cable system, making it the largest capacity owner out of the 36 telecommunications operators which invested a total of over $650 million in the project. Telkom has been upheld as the sole reseller of the cable's capacity in South Africa. While Sentech and the forthcoming SNO are the only other parties that are allowed to resell access to the cable, efforts by Sentech to obtain wholesale access to SAT-3 have not been successful and it has instead elected to use satellite bandwidth for its international traffic. In 2002 the first facilities-based competition was introduced in South Africa when an international carrier of carriers license and multimedia license was issued to Sentech, the government parastatal provider of broadcasting signal distribution services. This allows Sentech to provide international connectivity to the other licensed

92 telecommunication operators, and to provide multimedia data services directly to end users. Prior to this it provided satellite downlink services for some Internet operators and consumers via a subsidiary company called Infosat. Sentech has some 500 television transmitter towers, which carry various TV, FM, medium and short-wave and satellite services. A process to establish a second national operator (SNO) to provide public switched telecommunications services began in 2002 and it was expected that licenses would be issued in 2003 or early 2004, however, the solicitation of applications for the SNO licenses was not well received by prospective domestic and international telephone service providers. Government initially said that the telecommunication divisions of the electricity parastatal, Eskom, and the diversified transport parastatal, Transnet, would form 30% of the SNO, with 51% owned by an international strategic partner and the remaining 19% by black empowerment groups. Transtel is the telecommunication subsidiary of South Africa's government owned transport, shipping and rail parastatal corporation, Transnet, which is still expected to form part of the SNO. Transtel operates leased lines, VSAT, microwave transmission, a fibre optic network, satellite bandwidth, an x.25 packet switched network, frame relay and ATM. It is the largest network in the Southern Hemisphere after Telkom and is interconnected with Telkom's infrastructure. Although it has no terrestrial infrastructure outside of South Africa as yet, Transnet has leased transponders on various satellites which allow it to use C-Band and KU-Band VSAT technology to connect to other countries and to remote areas inside South Africa. Eskom is South Africa's national electricity supplier which maintains a telecommunications network that services the organisation's communications requirements and will also form part of the SNO along with Transtel. Although much of Eskom'sbackbone is currently based on microwave links, Eskom is installing fibre optic cable down all new cables laid, in a project called South African Fibre Optic Network (SAFON) in major cities and industrial areas which includes a backbone network, access network and terminal equipment in metropolitan areas. Links also extend to Botswana, Swaziland and Zimbabwe. The grid is expected to expand into a continent-wide network in the longer term as projects to tap the electricity generation potential of the Congo come on stream. Eskom has a subsidiary company focussed on telecommunication, which is also active in the rest of Africa. It is expected that a license will be issued shortly in which the government will hold a 25% stake directly and 30% indirectly through Eskom Enterprises and Transtel, and the remainder being held by black empowerment partner Nexus, and the winning consortia Communitel and 2 Consortium. Telkom is required to allow the second national operator to use all of its telecommunications facilities for the first two years of its license, on a sharing basis, for the purpose of providing public switched telecommunication services. This would include access to SAT-3 however policy matters in relation to Local Loop Unbundling (LLU) still have to be addressed, and it is expected that once this dispensation lapses, Telkom is likely to exercise its rights to exclusivity over its own infrastructure. Twenty-seven areas were identified as having less than 5% teledensity and 7 of these were subsequently selected for special 'Under Serviced Area Licenses (USALs) and 4

93 winners have so far been selected, with the remaining three still pending. The bidders that were recommended are: Bokone Telecomms (Limpopo, Capricorn District); Thinta Thinta Telecoms (KwaZulu-Natal, Ugu District); Kingdom Communications (KZN, Zululand District); and Ilizwe Telecoms (Eastern Cape, OR Tambo Municipality). Also in the Eastern Cape, in the Amatole District, Amatole Communications was recommended, pending the finalisation of the merger discussions with Uqalo consortium members. VSAT solutions have been deployed extensively in South Africa since the products first became available in the country during 1994, but their use is restricted by law in terms of who may offer these services and for what purposes. Only Telkom may use them without restriction. Although transport parastatal Transnet s communications arm Transtel offers extensive satellite services using VSAT in the rest of Africa, until the SNO of which it is part is licensed, it may not offer these services in South Africa9. Sentech s use of VSAT also has a restraint on the offering of voice services. Telkom now has in use over 5000 VSAT stations around the country, and has launched a satellite-based DSL service which utilises VSAT technology. Telkom is in the process of on migrating all of its data networks onto an asynchronous transfer mode (ATM) network. About 200 corporate customers were connected to the network. The present available bandwidth between the core switches is 49 STM-1s or 7.3 Gbit/s, while the available bandwidth between the core switches and the services access switches is 207 STM-1s or 30.8 Gbit/s. A2.12 Sudan Sudan has an extensive network of about fixed lines and mobile subscribers at the end of 2003 linked via a national fibre optic backbone which it continues to extend. This backbone spans over 5000-km, linking Khartoum with Karma in the north; Port Sudan and Sawakin on the eastern seaboard; Sinnar, Addamazeen, and Kinanah in the east and south; and Al Genana in the west. International links are made to Egypt through Karma in the north, Saudi Arabia via Port Sudan, Ethiopia, and Chad via Al Genana. In addition, Sudatel has extensive domestic satellite network, with about 70 VSAT earth stations deployed around the country. Sudatel increased the capacity of its international voice gateway by 48% between 2000 and 2001, from 1,403 international circuits to 2, of these circuits were with Intelsat and 1,737 were with Arabsat. Sudanet in addition has procured satellitebased upstream international Internet capacity through the German firm Spaceline. Sudatel and Saudi Telecommunications Corporation (STC) have also implemented a 1.2 Terabit submarine cable connecting the two countries, from Port Sudan to Jeddah (Saudi Arabia). Global Marine Systems and BT are the initiators of this system, and a joint venture company Arab Cables Company was created between the Saudi authorities, the Arab Investment Company and Sudatel which holds a 40% stake. 9 When Transtel was included in the winning bid to establish a network for the national Lottery 2 years ago, it began to install its own equipment, but objections by Telkom led to it having to give the network to Telkom and lease capacity on it.

94 Sudatel retains the monopoly on international services until New service providers are therefore dependent on interconnecting to Sudatel for international voice traffic (including cellular operators) and upstream international Internet bandwidth (for ISPs). Sudatel was privatised in 1999, and the state has sold off further tranches in the telco, and has since reduced its shareholding to 39%. Given its central position, Sudatel is also important to the realization of the COMTEL project which will provide onward connectivity to submarine cables landing in Egypt and Djibouti. A3. Details of the Connectivity mapping process A mapping / GIS application developed by Canadian company SKE is being used to integrate with Windows applications, so that underlying data can be exported into MSExcel, and mapping views can be exported into MSWord and MSPowerpoint. The tool is delivered on a self -installing CD-Rom, but the software application file size (c 50 MB) and format (GIS files) limit the data from being ed, closing potential circulation. On the other hand, users of the tool can be updated with small files (c 50 KB) which can be distributed via but which are unreadable without the tool itself. The tool is interactive, so data can be loaded into the system, which can therefore update the status of projects (or individual sections of projects) as they change. All recipients of the tool will be able to check the status of projects across the other countries. The model can also be customised to suit specific requirements, such as the development of a traffic management system, or interactive traffic forecasting system. Because the data is collated on a GIS platform, it will allow the periodic production and printing of geographic network maps detailing the status at given points in time. An example of the type of the interface used to create the maps in this document is shown below. Example Overview of Interface:

95 A4. International carrier licences Country International Carrier Licenses (Mobile and Fixed, Voice or Voice+data) License Holders Angola 4 Angola Telecom, Nexus, +2 Botswana 1 Botswana Telecom Burundi 1 Djibouti 1 Djibouti Telecom DRC 2 Socatel, Celtel Ethiopia 1 ETC Eritrea 1 Eritrea Telecoms Kenya 1 Telkom Kenya Lesotho 1 Lesotho Telecoms Malawi 1 Malawi Telecom Mozambique 1 TDM Namibia 1 Telecom Namibia Rwanda 2 Rwanda Telecom, MTN Somalia 5 Soltelco, STC, Telcom, Aerolite, Sitco South Africa 3 Telkom SA, Sentech, SNO Sudan 1 Sudatel Swaziland 1 Swaziland Telecoms Tanzania 1 TTCL Uganda 3 UPTC, MTN, Celtel Zambia 1 Zamtel Zimbabwe 4 TelOne

96 Current and Planned National Backbones Eastern and Southern Africa, November 2004 Algeria Legend Niger Agadez Panaftel (analogue microwave) Analogue Microwave Digital Microwave Fibre Chad Biltine Mao Zinder Abeche Maradi Planned optical fibre Diffa Bol Ati Katsina Planned digital microwave Kano Ndjamena Mongo Damaturu Dutse Maiduguri Populated Place Am Timan Maroua Bauchi Birao Jos Bongor Nigeria Main city Yola Lai Abuja Jalingo Garoua Doba Sarh Ndele Moundou Makurdi Capital city Ngaoundere Kaga Bandoro Awka Bouar Central African Republic Bamenda Sibut Bambari Uyo Cameroon Bertoua CalabarBuea Berberati Mobaye Yaounde Mbaiki Luba Nola Ebolowa Ebebiyin Ouesso Impfondo Equatorial Guinea Libreville Makokou Mbandaka Lambarene Owando Gabon Port Gentil Congo Mouila Masuku Djambala Uige Benguela Kuito Huambo Angola Namibe Ngunza Onjiva Faya Tchibanga Bandundu Sibiti Loubomo Kinkala Pointe Noire Madingou Kinshasa Cabinda Matadi Mbanza Congo Luanda Malange Ndalatando Tsumeb Outjo Otjiwarongo Omaruru Karibib Gobabis Walvis Bay Namibia Rehoboth Libya Congo, DRC Kahemba Menongue Maltahohe Luena Lucapa Saurimo Luderitz Bethanien Keetmanshoop Karasburg South Africa Melkbosstrand Cape Town Kananga Mbuji-Mayi Mongu El Fasher Sudan Obo Mbale Uganda Kisangani Fort Portal JinjaKakamega Bombo Nyeri Kenya Buluko Kyebe Kisumu Embu RuhengeriMugogo Bukoba Musoma Nairobi Zambia Wau Egypt Burundi Bururi Kigoma Tanzania Katima Mulilo Kasane Mohembo Livingstone Harare Mozambique Mutare Maun Zimbabwe Gweru ChimoioBeira Plumtree Orapa Francistown Masvingo Ghanzi Botswana Serowe Bloemfontein Lesotho Moyeni Mohales Hoek Rwanda Ngozi Tumba Mansa Solwezi Ndola Lusaka Siavonga Arua Gulu Mbeya Eritrea Lichinga Chipata Malawi Lilongwe Songo Blantyre Tete Pietersburg (Polokwane) Inhambane Jwaneng Mochudi MolepololeKanye Xai-Xai Lobatse Bakenkop Tsabong Pretoria MaputoMozal Ramatlabama Johannesburg Swaziland Camden Kimberley Hlotse Mtunzini Bisho East London Port Elizabeth Dongola OmdurmanKhartoum El Obeid Wadi Halfa Malakal Djibouti Dese Boosaaso Dikhil Debre Markos Ceerigaabo Borama Harar Burao Nek'emteSululta Somalia Hargeysa Gore Ethiopia Garoowe Jima Laascaanood AwasaGoba Gaalkacyo Arba Minch Dhuusa Mareeb Geita ArushaMoshi Shinyanga Kasama Durban Moroto Tabora Singida Sumbawanga Richards Bay TangaWete ZanzibarKoani MorogoroKibaha Dar es Salaam Iringa Songea Mzuzu Port Sudan Gonder Asmara Mek'ele GarbahaareyBaydhabo Jawhar Wajir Mombasa Lindi Mtwara Comoros Pemba Bu'aale Nampula Mocambique Juan De Nova I. Xuddur Kismaayo Mayotte Marka Glorioso Is. Madagascar Toliara Mahajanga Antsiranana Toamasina Antananarivo Fianarantsoa Note: National backbone infrastructure for Southern and Eastern African countries only. Data not available for Burundi, Lesotho, South Africa and Swaziland at time of production. Sources: Telecom operators, Panaftel map (ITU); submarine cables (Alcatel, and cable operators). Prepared for the e-africa Commission with funding from the World Bank by Mike Jensen and Paul Hamilton.