Preliminary deal signed for African cable system

The e-Africa Commission has signed a pact with a U.S. company to construct a $2 billion undersea cable system.

The e-Africa Commission has signed a memorandum of understanding with 5-P Holdings to construct a US$2 billion undersea cable system planned to encircle Africa with connections to Europe, South America, India and the Middle East.

The MoU provides a framework for collaboration between the commission's parent organization, the New Partnership for Africa's Development (NEPAD) and 5-P Holdings for the financing, design and implementation of the fiber-optic network, according Henry Chasia, chairman of the e-Africa Commission.

The completion of the 50,000-kilometer cable is expected to help reduce telecommunications rates, which have been a barrier to business development in Africa.

The cable will provide landing points to every coastal and island country in Africa, including those countries that are currently not serviced by other cable networks.

The signing of the MoU follows the endorsement of the project by information and communication technology ministers and experts from eastern and Southern Africa at a meeting in Johannesburg last month. The ministers called for the speedy implementation of the cable project.

The financial details of the deal are still sketchy but 5-P Holdings, in the U.S., has so far been assured that it will have a 25 percent share of the cable project. The majority of the shares in the cable are African-owned, a strategy NEPAD says will make it easy to control the pricing of the bandwidth.

According to the MoU, 5-P Holdings will also look for investors interested in investing in the cable.

Africa's longest cable will have a capacity of 3.84T bps (bits per second) and will be operational by the first quarter of 2010.

The cable has been dubbed UHURUNET, derived from a term for independence in Kiswahili, one of the African languages.

NEPAD has been chartered by the African Union to develop the continent's IT infrastructure.

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