Tuesday, September 1 2009
Q&A: Brian Herlihy, CEO, Seacom
Over 17,000 km long, the SEACOM fiber optic cable cost US$600 million to build. But the investment is transforming internet access in East Africa. SEACOM CEO Brian Herlihy responded via email to Tradewinds as the company celebrated the launch of its submarine cable serving East Africa.
Tradewinds: How is the new cable changing access to the Internet and ICT in East Africa?
The anticipation of SEACOM’s arrival alone started to bring about changes. Three national networks are now being built up in Kenya. In South Africa, four different national networks are being developed. We’re seeing people explore business cases in Mozambique and Tanzania. The government of Rwanda has rolled out huge fibre networks throughout the country. All of these investments would never have made sense for delivering pure satellite connectivity. Now, with submarine cables, they make economic sense. It’s not just a price issue. It’s about the quality of the product being delivered to the end user.
Tradewinds: What were the critical obstacles that were overcome in bringing the new cable online?
Brian Herlihy: The project itself, solely from dollar and technology perspectives, is not nearly as large as some of the other projects undertaken in Africa but from a complexity perspective, it’s by far one of the most complex.
SEACOM offers one, seamless product to end users spanning 11 sovereign nations. To deliver that product requires overcoming issues that permit that product to go through these 11 different countries. SEACOM, as an international entity, had to figure out how to sign contracts at a local level and then deliver that product in and out of all the countries.
In Kenya for example, you actually need to go to the tax authorities and get a ruling on how they look at an IRU – in other words, the right of usage on the cable and the ownership of bandwidth on the cable itself. You have situations in Egypt, where we were the first cable system ever to do an Environmental Impact Assessment.
SEACOM went into many countries wanting to implement best practices and this was received positively with the authorities wanting those practices utilized, but without necessarily having the processes or human resources to process a programme such as SEACOM.
The actual manufacturing and laying of the cable was done by a turnkey contractor and you only really have three majors in the world. Tyco Telecommunications was the contractor for this project. For the most part, they either utilized their own cable-laying ships or outsource, if necessary. With a project like this there was a huge list of permits that needed to be acquired, starting with environmental permits and working up to the ministry of defense permits for the Tyco vessels working in specified territorial waters. All these permits are inter-linked to a certain extent.
Ultimately, if permitting is done correctly, the process of laying the cable is not a difficult one, but it’s a very interesting one. You start with a marine survey – a topographic survey of the ocean floor, so you can determine the most benign route to follow. You look at the seismic activity under the water, to avoid the cable being exposed to underwater earthquakes. Then that data feeds into software that spits out a manufacturing specification for the cable itself. The cable is then manufactured completely on land per the specs of the marine route. Once the cable is manufactured, it’s loaded into large vessels. In SEACOM’s case we had three cable-laying ships contracted with the largest carrying some 6,000 km of the cable.
Tradewinds: Now that the new cable is up, what needs to be done to extend access to the general population in East Africa? What’s the time frame for that, as far as you can tell?
Brian Herlihy: From the outset of the project, SEACOM realised the importance of connecting inland countries to the international network and many countries set out to deploy massive terrestrial networks in anticipation of the arrival of real and affordable international bandwidth connectivity. With more and more countries getting connected to the rest of the world via the SEACOM system, it is only a matter of time before we see the direct socio-economic benefits this will have on the entire region. With connectivity now available, it is up to governments and Internet Service Providers to pass on the cost savings and capacity to their customers. We have already seen service providers in Kenya announcing that they will be launching new and improved services.
Tradewinds: What kinds of price reductions in access are people and businesses seeing thanks to the new cable?
Brian Herlihy: The status quo started changing when SEACOM formally announced that it would be proceeding with an east Africa undersea cable in October 2007. The disruptive impact of SEACOM's arrival has already been evidenced through the media and around boardrooms. Based on the anticipation of SEACOM’s arrival, prices decreased steadily to around R800,000 per STM-1 per month from the prior R2 000 000 on the SAT3/SAFE cable system. This was coupled with the decision to upgrade SAT3 to its maximum capacity from 120Gbps to approximately 340Gbps. Ultimately, the launch of SEACOM in July heralded the start of a revolution in international fibre connectivity. In comparison, SEACOM’s capacity is 1.28 Tbps (10x the initial capacity of the SAT3 System)
In the past month alone, there have been price cuts in the market, especially in east Africa where large operators have openly announced their price cuts publicly. In South Africa, businesses and end-users are eagerly awaiting announcements on revised pricing. It is certain that the telecommunications landscape will continue to evolve rapidly as other projects including EASSy, WACS, Glo-1 and Main One become operational over the next 24 months.
Brian Herlihy: Over the past couple of decades, fibre optic cables have become the preferred means of communication between countries for obvious reasons - transmission delay for 15,000 km’s is 150ms. This is not the case in Africa, where due to a shortage of fibre connectivity, telecommunications remains heavily reliant on expensive and slow satellite systems where the minimum transmission delay is 600ms.
With fiber-optic technology we are talking about data that literally travels at the speed of light under the oceans. With satellite, there is a greater delay between requesting data and getting a response on your computer screen. Speed improvement for end-users is entirely up to service providers and they hold the key when it comes to meeting users’ expectations.
One thing is clear: the current excitement will result in customers, including end-users and businesses, having increasingly higher expectations in terms of improved local broadband services, reduced costs, higher data usage caps and higher speeds.
Tradewinds: Did regulators play a helpful role on the new cable? If so, how?
Brian Herlihy: When SEACOM finalized and received the complete environmental and social impact assessment in Kenya, Kenyan officials were incredibly complimentary, not only because SEACOM took the care to insure that it was a good neighbor, but also because it set precedent on what best practices should be and gave a template for other cable systems and other marine-associated programs to follow.
People don’t understand that an environmental assessment is not just a matter of going out and doing studies, writing a report and submitting it. You actually end up changing your program dramatically conceptually in order to accommodate the findings and be a good neighbor.
With SEACOM, it included things like changing the approach of the cable because the approach route that was chosen was also a channel used by fishermen. But, ultimately, changing the route fed directly into the design of the cable and the manufacturing of the cabling itself.
Unless you’re able to do these things in a very linear process, which is almost impossible over 18 months, you’ll encounter delays and higher costs.
Also, in the first six months of doing any project, people aren’t really interested in it, because they don’t really know how tangible and real it is. Feedback is scarce and it takes a while before you actually start getting all parties wanting to add their views and concerns
There are only two ways to deal with it then – refuse to consider their input because the official process deadline has passed or adopt the ‘good neighbor policy’ and try to accommodate them. We followed the latter but this came with some serious monetary and time impacts on the overall development.