Monday, April 27, 2009

Tata expands African reach with Seacom

Tata Communications’ announcement of its anchor tenancy on a new subsea cable along Africa’s eastern shore underscores Tata’s intent to open up greater communications to African countries including Kenya and Tanzania as well as its intent to compete more strongly for South African telecom business.

Tata said today it is an anchor tenant on the privately owned Seacom cable system, which will have landing sites in South Africa, Mozambique, Tanzania and Kenya in Africa, in Mumbai, India, and also in Marseille, France. Tata subsidiary Neotel, which competes with South African incumbent Telkom, will host the landing site in South Africa for Seacom, and Tata will host the Mumbai landing site as well. In addition, another Tata subsidiary, Tata Communications Transformation Services Limited (TCTS), will handle network administration, operations and maintenance contract of the Seacom cable, which will support 1.28 terabits per second of capacity.

“This fills a gap in our network – it is the first cable system that goes up the east side of Africa,” said Don Schuett, director of product management for global transmission services for Tata. “Our South African subsidiary Neotel is the second operator in South Africa, going head-to-head with the incumbent. With our investment there and our investment in Seacom, this essentially provides seamless interconnection between Neotel and the rest of Tata without having to rely on a consortium cable. We also have an overall strategy of expansion into emerging markets .”

Seacom will be the first undersea high-speed link that goes into Kenya and Tanzania, Schuett said, offering opportunities to expand broadband access in those countries.

“As we look at Africa as a continent, Tanzania and Kenya stand out, and we will have direct interconnection into these countries,” Schuett said. “Previously they [were] only able to get connectivity through high-cost and low-bandwidth satellite connections.”

Both countries have stable economies and have been seeing growth in bandwidth demand, Schuett said. “Really the piece that is missing is being able to get the bandwidth in and out of those countries cheaply and enough. When you have these economies that are growing and Internet usage is going up,” the lack of connectivity outside the country can be stifling.

“This will be a major development in building up African infrastructure, which is one of our goals,” Schuett said.

Seacom will also connect directly into Tata’s European and Indian network facilities.