$110 million fibre optic deal

Kenya said it was on track to deliver high-speed broadband through a new fibre optic cable by the end of June, as the project’s corporate shareholders signed a financing agreement worth $110 million on Tuesday.

Bitange Ndemo, a top official at the information and communications ministry, said the route for The East African Marine Cable (TEAMS) cable had been shifted an extra 200 km (124 miles) from the coastline for fear of piracy off Somalia.

Eleven communications companies had agreed to be part of the project. They will contribute $110 million while the government will give another $20 million, he said, dismissing as “nonsense” a local media report that there had been a blowout in the budget and delays.

“The signing of the shareholder subscription and loan agreement is a culmination of a process initiated by the Kenyan government in 2006,” Ndemo said.

The major shareholders are the government, Safaricom and Telkom Kenya, each with 20 percent. Kenya Data Networks and Econet Wireless each hold a 10 percent stake, TEAMS acting chief executive Victor Kyalo told Reuters.

Other investors include Wananchi Online (5 percent) and Jamii Telkom (3.75 percent). Another five companies plan on buying a 1.25 percent stake each while the remaining 5 percent awaits a buyer.

The firms now have 90 days to pay for their stakes in the project which will will give Kenya access to high-speed internet services through a sub-sea fibre optic cable that will stretch from Mombasa to Fujairah in the United Arab Emirates.

Rival undersea project SEACOM has reportedly already landed its cable at the port city of Mombasa, which is to become a regional telecommunications hub.

Ndemo said technology was moving fast with video-based communications using up ever greater amounts of bandwidth and the extra capacity offered by the new fibre optic cable would help Kenya to be at the cutting edge of online service delivery.