In fibre optic cable, Kenya dreams big

At the time only Seacom and the Eastern Africa Submarine Cable System (EASSY) had shown interest.

Things seemed to move on nicely until the battle for control in EASSY split regional governments and private players. And so a new fibre optic cable venture, TEAMS, was born, spearheaded by regional governments and local telecoms in partnership with Etisalat, the Dubai-based telecommunications operator.

Sitting suited in his Museum Hill office, Mutahi Kagwe does not exactly cut the image of an IT geek. On this warm Wednesday evening, the former Communications minister laments about cheap politics, says one or two things about economic slowdown and sneers at how he spent an hour to drive 10km in the city traffic jam before settling on his favourite subject: ICT.

“The cable has arrived in a record three years,” says Mr Kagwe, who was among the proponents of a Kenyan-fronted initiative and helped not only to seal partnerships abroad but also, as he likes to joke, to coin the name TEAMS, which is shorthand for The East African Marine Cable System.

From an idea floated at a breakfast in Barcelona with CCK boss Eng. John Waweru and his South African counterpart in February 2006, Mr Kagwe was gleeful as an invited guest when President Kibaki led the launch of the arrival of TEAMS at the coast recently.

“We had thought EASSY was coming but when ownership fights started we realised we were losing it,” he said in an interview. “We had to rethink our strategy.”

What followed was a series of meetings, which landed Mr Kagwe and other East African communication ministers a tour of Toyco, the US fibre optic company.

“We learnt a lot about laying the cables and attendant problems,” he said. “As we travelled in the bus, we started discussing about the name, and because we were there as a team from East Africa, we settled on TEAMS. I immediately called the PS (Dr Bitange Ndemo) to reserve the name.”

The arrival of TEAMS and Seacom has spurned dreams about an ICT revolution that many expect to cut the cost of communication and increase speeds, replacing the satellite system, said to be expensive and slower.

The fibres, the size of human hair, use light to transmit communication, giving fast connection and clarity in voice such that you wouldn’t tell if someone was calling from Nyeri or from some New York suburb.

“There are no echos,” Mr Kagwe said. “That’s why in a call centre you can’t tell where someone is calling from.”

There has been a frenzy as local telecommunication companies angling for internet reseller deals dig up grounds to install terrestrial cables to link up the rest of the country.

Meanwhile, businesses have shifted into standby mode for the switch expected in August. The Rockefeller Foundation together with the ICT Board, the government-run organised in charge of building ICT capacity and marketing Kenya, last week held talks on how to position the country’s Business Processing Outsourcing to tap the global market.

Experts say the fibre optic cables present huge business opportunities to different sectors and, if utilised well, can turn Kenya into an ICT hub in a few years.

According to a formula prepared by TEAMS, the Kenyan operations would be modelled on India’s charges for BPO services because the subcontinent, which has turned outsourcing of simple things like accounting and software into a small economy, is the biggest competitor in call centre business.

This is meant to beat others like SAT 3, the West African cable said to be so expensive businesses would rather use satellite.

“Whether or not the cable is a panacea, there is hope that it will deliver the promise of broadband connectivity to more Kenyan homes and businesses,” says Mr Chris Harrison, the chairman of Wunderman Kenya, a marketing and branding company.

Mr Harrison said it will open opportunities for businesses – right from inception to marketing. There are 54,171,500 internet users in Africa via traditional computer access.

At the end of 2007 there were 280.7 million mobile phone subscribers in Africa, representing a penetration rate of 30.4 per cent. By 2008 Kenya had 16.3 million mobile phone subscribers – representing a 46.2 per cent penetration. Mobile penetration in Kenya’s telecom market will grow by 95 per cent over the next five years”

Big boost for small firms

This is significant because, Mr Harrison said, mobile data will be the telecom sector’s fastest-growing revenue stream partly due to the launch of 3G services but also to the explosive growth of low-tech, low-margin mobile data services, particularly mobile money transfers.

“Internet growth in Africa will mainly be driven by mobile connectivity, and marketers who understand and exploit this will outstrip their analogue competitors.”

For small businesspeople like Alex Bengo, the chief executive of Ebits Online, a web development and marketing company, the fibre means a lot.

With increased speeds he can deliver more websites for clients and earn more to grow his startup.

“The speeds are slow,” says Mr Bengo, who uses a Safaricom modem and occasionaly dashes to a high-speed cybercafe. “Sometimes you can’t even connect. It’s expensive and annoying.”

Mr Kagwe said TEAMS was a response to price and targets cutting internet charges from the current average of Sh7,000 per megabyte to Sh500 or less. But the challenge, analysts say, will be in content generation to reverse traffic flow, which mostly comes from western users.

But the beauty lies in cost-cutting when a company, for instance, can hold a tele-conference with branches across borders and overseas. If the government plans it well Kenya can soon be offering outsourcing services in accounting, call centres, nursing, movie making among others.

“Our times are better placed such that when we go to sleep, other places are waking up,” said Mr Kagwe. “Singapore took advantage of its time difference and see where they are now.”