Investment in African telecommunications is set to rise with undersea cables being the most active segment, a newly released report shows.
The report, by global growth consulting company Frost & Sullivan, shows that capital expenditure on fixed telecommunications in Africa was at least $195 million (about Sh13.6 billion at current exchange rates) in 2006.
However, politics and wrangling over ownership remain a major hurdle to the development of the industry.
“Despite their importance to the development of the telecommunications industry, the undersea cable projects are restrained by political disagreements and policy uncertainties around cable ownership and project control,” says Frost & Sullivan Industry Analyst Lindsey Mc Donald.
“Governments, regulatory authorities, network operators and other key stake holders have to reach a consensus regarding strategies and ensure that the cables are laid as quickly as possible.”
For instance, wrangles over the East African Submarine System (EASSy) – a regional initiative to connect Eastern Africa to the global network of high speed Internet via South Africa – saw the Kenya Government start a parallel project, the East Africa Marine System (TEAMS), with and Etisalat of the United Arab Emirates (UAE) for which it set aside Sh1 billion in its current budget.
But the Frost & Sullivan analyst says, these challenges notwithstanding, there are abundant opportunities for investors in the African telecommunications sector once the investments are in place.
Indeed, the race to complete the cables is officially on the way. Mr Simon Olawo of the EASSy secretariat office in Nairobi told the Daily Nation that the partners have raised the funds needed for project, estimated at $235 million, which is in a bank in Kampala, Uganda.
Source: The Nation
