Submarine cables to help bring Africa into global economy

Some East African governments are readying business capacity in anticipation of four submarine cables that are expected to improve the area's business climate.

Some governments in East Africa are stockpiling business capacity in anticipation of the four submarine cables that are expected to bring unprecedented connectivity options and related business opportunities to the region, according to a study by IDC.

"For example, Kenya is already subsidizing communications costs for business process outsourcing providers and establishing a BPO zone," said Francis Hook, IDC East Africa regional manager. "This ensures that there will be a supply of labor in place once cheaper and more reliable broadband arrives."

Governments in the region hope to use the new capacity to transform their economies, and land infrastructure projects abound as governments lay cable to bring capacity in from the coast, an especially important project for landlocked nations, Hook noted.

TEAMs (The East African Marine System) cable is expected to land in Mombasa by mid-2009, while EASSy (Eastern Africa Submarine Cable System), SEACOM and Uhurunet are expected to land later that year.

The four different cable projects will alleviate East Africa's dependence on expensive satellite broadband, a situation that has contributed to scarcities in communication, education and market opportunities, added Hook, who wrote the study.

Although the laying of the first cable will immediately increase broadband availability, Hook observed that substantial price drops may only occur once additional cables provide competition.

Currently, only Western and Southern Africa are covered by the SAT-3/WASC (South Atlantic 3/West Africa Submarine Cable), which connects via Portugal, while another segment of the project, SAT-2/WASC/SAFE (South Asia Far East), connects South Africa and Mauritius with India and Malaysia.

The highly anticipated 2010 FIFA World Cup to be held in South Africa has been cited as a major driver for increased capacity. The study also notes that operators and governments across the area are being driven to participate by the opportunities the shift in Internet availability will bring: a variety of new business models and acceleration of East Africa's integration into the global economy.

"Several countries in the region have fledgling BPO industries that take advantage of lower competition for educated workers than in the overheated Indian outsourcing market," said Hook. "While India obviously has far greater scale, countries like Kenya or Uganda offer enough educated, English-speaking workers to appeal to medium-sized enterprises that would like to capture dedicated capacity by being the first to move into this region."

The report, titled "Submarine Internet Cables: The Race to Connect East Africa," describes the Internet cables that will replace expensive satellite broadband in East Africa, speculates on the probable winners of the cable-laying race, describes several likely consequences of the upcoming flood of inexpensive broadband and identifies the cable stakeholders most likely to benefit.

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