Business Daily (Nairobi)
Okuttah Mark
11 October 2007
Kenyans will have to wait until mid 2009 to access more affordable and faster Internet connection, it has emerged.
Alcatel-Lucent, the French company that was picked to build the country's first connection to the global network of high speed Internet, said it needs at least 16 months to do the job, which pushes the date for completion of the government-backed the East Africa Marine cable system (TEAMs) from the end of April next year to mid 2009.
Alcatel-Lucent beat Tyco Telecommunication, Fujista Corporation, NEC Corporation and Huawei Technologies of China to the deal after it offered to construct the cable within the budget set by the Government.
It will build the cable at a cost of Sh5.6 billion ($82 million) Sh2.2 billion less than the Sh7.8 billion that the Government had earmarked for the project, including the cost of survey and professional fees for the lead arranger.
News that it will take so long to complete the project is expected to cause concern in the corporate world where the communication remains one of the top cost drivers in the country.
Kenya currently relies on expensive and slower satellite services to access the global network of the internet. Local firms pay an average of between $7,000 and 7,500 per mega bit a month for this access. The cable is expected to lower this to an average of $500 per mega bit per month.
Alcatel-Lucent has to wait for a maximum of 14 days before its signs the contract with the Government. This period is to allow any of the losers to lodge complaints if any.
The cable will run from Mombasa and link Kenya to other global network of optic fibre cables at Fujairah in the United Arab Emirates.
Information permanent secretary Bitange Ndemo said the time line had been pushed forward following a lengthy tendering process.
"We had to tender for the project so as to ensure transparency in the whole project," he said.
Alcatel -Lucent mid this year won the tender to build the East Africa Submarine Cable, raising concerns that it might have too much on its hands to complete TEAMs on time.
"We will lay the TEAMs cable first because it is shorter and the complications surrounding EASSy ," said Gary Waterworth, the regional marketing director of Alcatel-Lucent.
Ownership of the TEAMs project has also been revised to give the private sector a bigger stake while catering for other governments in the region.
The initial holding had the government of Kenya with 40 per cent while the government of United Arab Emirates through their telecommunication company Etisalat owned 20 per cent and the remaining 40 per cent was preserved for the private sector.
However under the new arrangement, Etisalat will now own 15 per cent while the private sector will own 45 per cent, the share owned by the government of Kenya remains unchanged.
Dr Ndemo said a number of regional governments and private sector players had shown interest in the project. They are Rwanda, Southern Sudan, Ethiopia Uganda, Tanzania and Burundi.
A meeting to brief investors will be held today by Standard Chartered bank. The government allocated Sh1 billion for the project in this years budget.
Dr Ndemo said the Government would add more funding for the project through the sale of a third mobile licence to Econet. The Econet sale has raised $12 million ($840 million) in addition to another $15 million paid earlier.
The French firm is currently constructing an 800 km undersea optic fibre cable in Canada. Work on the project began in August and is expected to take at least six months to complete.
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