MTN invests $700 million in new cable

Africa's largest mobile phone service provider, Mobile Telecommunication Network (MTN), is investing over US$700 million in a new submarine cable system. The European Indian Gateway will connect Africa, Europe and Asia and boost the region's communication ability.

Alcatel-Lucent has been awarded a contract to build the 18,000-kilometer cable starting next month.

The cable will connect South Africa, Morocco, Libya, the United Arab Emirates, the U.K. and Portugal, among other countries.

The cable will provide a central linking point for other cable systems already in progress, including the East Africa Submarine Cable System (EASSY) project and the West African Cable System (WACS) that will connect east and west Africa.

MTN Group executive of corporate affairs, Nozipho January-Bardill, said earlier this week that the project is expected to be operational in the second quarter of 2010 and will link other cable systems in Africa to global telecom infrastructure via Asia and Europe.

Installation of the European Indian Gateway cable, equipped with transmission facilities, is expected to increase efficiency and reduce operating costs for Internet connections, video, e-commerce, data and voice services.

The cable will also provide a direct, high bandwidth fiber-optic submarine cable system from the U.K. to India.

"The cable will connect 13 countries in three continents and will utilize the state-of-the art generation technology that is designed to provide up to 2.88 terabits per second using dense wavelength-division-multiplexing," Bardill said via e-mail.

Other project financing comes from companies including Telkom Egypt, Telkom South Africa, Verizon, Bharti Telecom of India and Djibouti Telecom.

The introduction of the European Indian Gateway is anticipated to heighten interest in East Africa's broadband sector, which already has two other cables that will be operational next month.

Bardill said MTN is investing in various submarine cable projects to ensure optimum bandwidth capacity, which will be available at lowest cost to all its operations in 22 countries in Africa and the Middle East.

Many countries in which MTN operates, Bardill said, are dependent on expensive and unreliable satellite bandwidth capacity, which makes communication expensive. The European Indian Gateway cable and other fiber-optic capital investments, Bardill said, form part of the building blocks of a larger network that will ensure that MTN can support and help drive broadband in Africa.