Nairobi — The landing in Mombasa last week by the first undersea cable in the region, Seacom, has excited the local telecom industry.

But no user agreement has so far been concluded between any Uganda operator and the cable owner, The EastAfrican has learnt.

The $700 million Seacom venture landed last month and started a testing phase.

The East African Marine System (Teams), another cable, could land by October this year.

The industry in East Africa bleeds billions in expensive satellite connectivity, estimated at $0.7 to $0.8 million per month for 300 megabits, says Uganda Telecom chief technical officer Gadhfi Mohamed.

As a result of relying on satellite, the end user absorbs this spike in form of high tariff rates.

Connecting to undersea cables will lead to significant reduction in the cost of bandwidth by 60 per cent, industry experts say.

It is understood that owners of the two submarine cables have approached telecom companies in Uganda to sign up players in order for them to buy capacity.

But no agreement on pricing and other user terms have been reached.

MTN's chief executive officer Themba Khumalo said in a recent interview that discussions with cable owners were at advanced stages.

"We are discussing with a number of parties to ensure that we can also be part of the process of bringing cost effective bandwidth to Uganda. We shall be an active player and are ready to take advantage of this sudden explosion of bandwidth," he said.

Details of the negotiations are a closely guarded secret. No company is willing to give an indication of the pricing suggested by Seacom or Teams.

"I won't say too much in that respect. It is a highly competitive area and whatever I say can be overtaken by events," Mr Khumalo said.

"It comes with a lot of challenges: we have to relocate our pricing, total solutions and quality aspects so that people can see the change such capacity can bring and the overall impact of connectivity on a landlocked country like Uganda," he added.

Due to the high cost of satellite connection, the industry in Uganda and cable owners "agree in principle to connect" but user agreements present a number of complex issues.

These are being handled at group level in South Africa, in the case of MTN, said John Paul Bagiire, the company's general manager, strategic planning.

Most operators in Uganda -- like MTN, Uganda Telecom and Orange (through its sister company in Kenya, Telkom, which owns 51 per cent of Orange Kenya) are partners in the Eastern Africa Submarine System that will land at the coast next year.

Seacom's arrival means weaning the country off satellite, but that will not be enough. Experts say other constraints will slow down the industry.

For instance, a broadband strategy should have been worked out to have the country looped with the necessary backhaul infrastructure to reach the farthest nook. Andre Wills, managing director of Africa Analysis, one of the continent's top telecom policy, audit and research firms, says this is lacking in most countries in the region, with the exception of Rwanda.

Industry players also bemoan low uptake of broadband services due to lack of computers.

"To exploit the benefits of cheap and abundant bandwidth offered by submarine cables, Uganda should address these bottlenecks.

"Low computer penetration, low computer literacy and inadequate access to electricity in the country by end-users are examples of these constraints," said Mr Bagiire.

Uganda has so far laid some backhaul infrastructure from Malaba on the Kenya border to Katuna on the Rwanda border -- developed by MTN and Uganda Telecom over the past five years.

This infrastructure is part of the East African Backhaul System (EABS) link that will run across Kenya, Uganda, Rwanda, Burundi and Tanzania, feeding from cable systems that will land at both Mombasa and Dar esSalaam.

Currently, the Burundi segment of EABS is under construction, while the Uganda, Kenya and Rwanda segments are in place. Only the Tanzanian link is missing.

Despite these largely private sector initiatives, there is inadequate fibre network to deliver backbone broadband services.

A significant part of Uganda is yet to be covered by the government's $106 million national backbone fibre whose first phase -- Kampala, Jinja, Entebbe and Bombo -- is almost ready.