RascomStar African Satellite Initiative: Briefing
Communications and Digital Technologies
13 March 2001
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
COMMUNICATIONS, TRADE AND INDUSTRY PORTFOLIO COMMITTEES AND SELECT COMMITTEE ON ECONOMIC AFFAIRS Appendix 1
13 March 2001
RASCOMSTAR, AFRICAN SATELLITE INITIATIVE: BRIEFING
Chairperson: Mr Kekana (Communications Portfolio Chairperson)
Relevant Documents:
Rascom Submission (See Appendix 1)
Telkom Submission (See Appendix 2)
SUMMARY
The Regional African Satellite Communication Organisation presented a "strategic participation opportunity" to the Government of South Africa, asking it to contribute $40 million US for co-ownership in the satellite company and another $60 million US toward a project to "support other African countries in their ground infrastructure deployment". It framed this as a powerful step in promoting the African Renaissance.
Other South African communications businesses also made brief presentations on their own initiatives, including SABC, MTN, Vodacom, Telkom and others.
MINUTES
The Chairperson opened the meeting with the theme, "What will tomorrow bring?" and said there are three pertinent issues in ICT Connectivity in Africa: the improvement of the quality of lives, the integration of African countries into a union and the meeting the challenges of globalisation in Africa.
The main focus of the meeting was a presentation by RASCOM (Regional African Satellite Communication Organisation). Ms Brenda Madumise spoke on behalf of RascomStar, an African Satellite Initiative, presenting a "strategic participation opportunity" to the Government of South Africa. RASCOM is essentially asking South Africa to contribute $40 million US for co-ownership in the satellite company and another $60 million US toward a project to "support other African countries in their ground infrastructure deployment".
Ms Madumise spoke eloquently about the need for access to information and communication technology throughout Africa to further the African Renaissance and listed rural connectivity, low-cost, high quality links, low cost trunk calls and lower cost satellite connection as benefits of South Africa's participation (See document). The project is in keeping with the South African ideal or slogan of "Batho Pele" or "People First" in that it is rural people, women and children, who Ms Madumise called "the abandoned people", who will ultimately benefit from RascomStar. Part of the initiative is "Village Empowerment Terminals (VETs)". She said these could offer interactive health advice and eradicate illiteracy. Ms Madumise said the project would go ahead, with or without South Africa's participation, but said South Africa can be a leader in the African telecommunications renaissance.
SABC made a presentation on its Pan-African content, particularly its radio station, "Channel Africa", which it promoted as a "link" in the African Renaissance. Transtel spoke of its network in South Africa and satellite infrastructure. Telkom promoted its efforts to promote connectivity in Africa through its vision of African operators being owners and drivers of infrastructure. Revenue will stay on the continent when Africans are not just the passive consumers of services and technologies. MTN, Vodacom, Sentech, Orbicom and Eskom also gave presentations.
The Director-General of Communications, Mr Andile Ngcaba, said that what is important in Communications is that the work environment is predictable so that companies can make a profit. This requires a clear regulatory regime and legislative framework. The government has not decided whether to use domestic satellite services or take another approach. The ultimate objectives are to reduce input costs and increase types of access. Internet growth increased by 136% in Africa last year. Mr Ngcaba said satellite services must be provided by private companies and that, accordingly, the service be commercialised.
Discussion
(Q) An ANC member asked the RASCOM presenters to clarify and be more specific about the claims their presentation made. For example, how will intervention enhance communication? How exactly does RascomStar put "Batho Pele"? What is the role of government? He said it is a contradiction to install expensive technology in rural areas. He again asked RASCOM to say what they really mean by the claims they made. He criticised very forcefully RASCOM's comment that RascomStar would go ahead with or without South Africa's participation, asking, if this is indeed the case, why then is RASCOM wasting everyone's time by making a presentation. He asked that RASCOM's assertion be "unpacked".
(A) Ms Madumise answered that in saying RascomStar will go ahead with or without South Africa's participation they did not intend to be arrogant; instead, they wanted to show that the project is on track, RASCOM has delivered and the project will take off. They want South Africa to be a part of it. In using the slogan 'Batho Pele", she said they did not intend to abuse the term but to show that the project is about addressing fundamental issues and that "'Batho Pele' is what we are all about".
(Q) Mr Gore (DP) asked how the RascomStar can increase telecommunications access.
(A) Mr Goundae Adadja of RASCOM replied that the satellite system offers unique coverage of Africa as well as the Village Empowerment Terminals. He said they have no need of a wire system, something no other satellite has. In rural areas, they are talking about access, not ownership. It will cost 3 US cents to call any other African country, making it the cheapest system available. We are talking about development, not just phone calls, he said. African is a risky place to do business but we must develop. RASCOM contributes to creating a stable environment.
(Q) Another ANC Member asked if South Africa has the stability, predictability, sustainability and certainty that are essential to business.
(Q) Ms D Smuts (DP) asked Vodacom how much of the infrastructure for its project already exists and how much is only potential. She also asked Vodacom about costs of its service.
(A) Vodacom's representative, Ben Higson, MD, said the network now has 1 000 kms; in another 15 months, there will be 14 000 kms. He added that Vodacom has a private network that is constrained by its licence.
Mr Higson said cost is a relative term. For the business market, cost is not a big issue since the service in rural areas may be the only form of communication available. In the private rural market, however, affordability is very important. He said they were willing to talk with government about subsidisation and wanted to make a contribution. He said communication is a human need and people will always find a way to communicate. In the "Rainbow Nation" there is no one solution to achieve what we want.
(Q) Mr Pieterse (ANC) said "no information is misinformation", meaning in an information vacuum, anything that is said is believed. He pointed out that most of the presenters are South Africans. He asked them how they expect the Committees to believe they are suddenly inspired and committed to providing communications services for women and children in rural parts of the African continent when they have not done so in South Africa. He also noted that the needs of people with disabilities had not been mentioned.
(A) The MTN representative, Mr Mogale, General Manager, Corporate Relations said they only had five minutes to make their presentation and so could not address everything as fully as they would have liked. He said they cover 80% of the South African population. This is a lot. He said they do indeed "take cognisance" of the needs of people with disabilities.
The Vodacom representative, Mr Higson, said the fact that in rural areas, people are "lining up" to be "phone shop owners" shows the success of efforts in rural areas.
The SABC representative, Ms Ramathesele, General Manager, SABC Africa, said there are items on people with disabilities on Channel Africa, particularly in terms of the damage caused by land mines. She said they seek to empower at a grass roots level in presenting "African stories" from an "African perspective". She asked her colleague to address the "objectivity" of African stories. He said "objectivity" is for the viewer to decide on. He said they tried to present all stories, including stories about famine and war and other crises. This is objective.
(Q) Ms Shope (ANC) of the Trade and Industry Committee asked if RASCOM is owned by France, as she had heard. She also asked if the telecommunications connection they offer is cheaper than the one they get with Telkom.
(A) A RASCOM representative said RASCOM is not owned by France.
(Q) An ANC Member asked about addressing and reaching rural communities. She asked if they are empowering or exploiting.
(A) The Raskom representative repeated that the Director-General of Communications had said the private sector must take communications initiatives forward and make profits. But he noted that if a company's Board of Directors had to decide who to give service to, they would choose the urban community since this would be more profitable. This is why the government must impose service to rural communities. He said the responsibility of the government to "level the playing field". He asked government to re-look at the problems, saying neither Telkom nor RASCOM have the solutions. He added he thought it would be a tragedy if South Africa did not participate in RASCOM.
Director-General of Communications Ngcaba ended the meeting by recommending all the stakeholders have a meeting to familiarise themselves with and discuss the regulatory environments of other African countries.
The meeting was adjourned.
RascomStar
AFRICAN SATELLITE INITIATIVE
(Strategic participation Opportunity)
Gestalt Corporate Engineers
March 2001
FOREWORD
This memorandum has been prepared by Gestalt Corporate Engineers to briefly describe the RascomStar Satellite Project and the social, political, economic and investment opportunities that the project represents. The memorandum, which is preliminary in nature, is a summary document. A complete memorandum shall be furnished upon request.
Information, for this report, has been supplied by, or in association with RascomStar, the project promoter, Babcock and Brown financial consultants and for technical information, Alcatel Space. Secondary sources of data have also been utilised and are specifically acknowledged. The reliability of this document is related directly to the reliability of this information.
This document has been compiled in good faith. However, the authors shall not accept any responsibility for the information contained herein, or for any omission, and shall not be held liable for any loss or damage arising as a result of reliance on this document.
Enquiries regarding the contents of this report or requests for further information should be addressed to;
Mannie Hirsch
J. Fenster
Rob Ryan
Gestalt Corporate Engineers
1 Information Era
1.1 The world has entered an era of revolution where information transmission is the driving force of human development and economic growth;
1.2 Most African economies are handicapped by poor social and financial development
1.3 The new information economy is technology driven. Without access to technology, the gap between Africa and the Western world will widen dramatically;
1.4 South Africa enjoys substantial economic and technological advantages over other African countries. Within the country, however, access to these advantages are unbalanced;
1.5 South Africa's socio-economic transition has not yet closed the gap between its own wealthy and poor sectors and the well serviced urban and marginalised rural populations;
1 6 Given the right infrastructure, access to information is inexpensive and is not geographically discriminating. Thus, this new era represents a unique opportunity to bridge the gap between the wealthy and poor, and urban and rural populations;
1.7 People and economies excluded from this economic revolution will be cut off and left behind by the rest of the world, widening the already pronounced digital divide;
1.8 The information revolution is capital intensive, requiring massive investment in infrastructure to connect populations to telecommunications networks, the information superhighway and broadcast channels;
1.9 South Africa is now at a point where investment in information transmission technology will bridge critical gaps, whilst improving the country's long-term competitive position.
1.10 The very nature of free business is to pursue profit. The same is true in information transmission. This will naturally result in service providers seeking the high monetary returns offered by urban and corporate markets;
1.11 It is imperative that, in realising these opportunities, purely financial concerns do not overshadow the needs of our marginalised rural people;
1.12 South Africa enjoys a position of technological, financial and media leadership of the African continent. The information age offers South Africa a unique opportunity to expand these advantages for economic, social and competitive gains to and from, both South Africa and the greater African continent;
1.13 Thus, the information age offers South Africa the unique opportunity to bridge the digital divide, bringing human and economic development to all of the people of Africa and, in particular rural populations. This is a key instrument in the realisation of the Millennium Africa Plan.
2 Benefits of Connectivity
2.1 Connectivity includes telephony, linkage to the information superhighway and vital literacy, education and medical platforms as well as entertainment and information broadcasting;
2.2 By embracing the information age and its comprehensive linkage channels, access to literacy, education, healthcare and information can be enjoyed equally by all populations, regardless of their location and income level. Similarly, the distribution of entertainment and information broadcasting can be heightened without discriminating by income or location. Finally and most importantly, people can achieve critical social links with the simple benefit of telephone connections;
2.3 Broadcasting is a vital means of preserving cultural links;
2.4 Connectivity will reduce distances and differences between people and improve human development indexes dramatically.
3 Low Connectivity
3.1 Africa is far behind the developed world in information infrastructure. This is a function of:
3.1.1 Deliberate lack of economic development: Colonisation stunted African economic growth and many of these economies cannot afford the capital cost of this infrastructure;
3.1.2 Population distribution: which includes less dense clustering and greater distances between population centres;
3.1.3 Low funding availability: Africa is not treated as an attractive continent for investment. This makes it difficult and costly for governments to raise the funds necessary for capital investment
3.1.4 Lower return on capital investment: the combination of the above factors results in a lower return on investment;
3.2 Because of the low investment priority placed on Africa, there is no viable satellite wholly dedicated to the African continent. This has further increased the cost of connection and reduced accessibility whilst limiting the quality and spread of connection;
3.3 It is estimated that Africa loses $500 million per year in transmission fees alone, due to the lack of dedicated infrastructure;
3.4 Whilst trailing developed economies, South Africa enjoys, relative to most African countries, an extremely high connectivity rate (of all telecommunication, internet and media forms). Within the country, however, there is a marked difference in connectivity between the black and white and urban and rural populations. The black and rural populations suffer extremely poor linkages, increasing the marginalisation of this population;
3.4 43% of the black South African population, representing over 16 million people, live in rural areas and, of this population 90% have no means of telecommunication and 67% are more than 15 minutes away from a telephone;
3.5 Africa as a whole has extremely poor telephone connectivity, especially when compared to the developed economies. The whole of Southern Africa for example has less telephone line connections than Manhattan, New York, alone.
4 Regional African Satellite Communications Organisation (RASCOM)
4.1 The Regional African Satellite Communications Organisation, RASCOM, was created in May 1992 by all African Governments to provide the African continent with appropriate telecommunications infrastructure capable of fostering the development of telecommunications in every African country and giving access to telecommunications services at low cost to every citizen in Africa;
4.2 RASCOM is an initiative to provide dedicated satellite facilities, named RascomStar, controlled by Africa, to the entire African continent;
4.3 RASCOM offers universal access to telecommunications services in Africa
4.4 The initiative will provide both wide C Band coverage and Ku band multi-spot coverage across all of Africa;
4.5 RASCOM will provide comprehensive telephone, broadcasting and internet connection, at low cost, but with extremely high quality throughout Africa;
4.6 RASCOM has been conceived to compliment and provide further services to existing telecommunications companies, internet service providers and broadcasters. The initiative is strictly macro-infrastructure and does not compete with, but complements, existing national or private ground operations;
4.7 By being continentally based, the capital cost of launching and managing the satellite program will be spread over several countries, diluting the cost per country dramatically and increasing project returns. Thereby reducing the entry cost and risk simultaneously;
4.8 By being continentally dedicated, the RASCOM initiative will offer all African and South African organisations and peoples the best quality satellite linkages at the lowest cost;
4.9 Notably, this initiative will ensure telephone, information and entertainment access to rural populations at highly competitive rates. The initiative includes Village Empowerment Terminals (VETs), the next generation of VSats, which are integrated communication centres, including telephones, television and computer, connected via satellite to telephone networks, broadcasters and the internet. These will be owned and operated by local telecommunication organisations;
4.10 The tender to manufacture and launch the satellite and establish or manage the installation of central ground infrastructure has been awarded to Alcatel Space (France);
4.11 RASCOM has secured the prime satellite position in space, through a joint venture with Eutelsat and has already secured the commitment of 44 African countries to its program;
4.12 RASCOM is in the process of finalising a further space slot with the International Telecommunications Union (ITU). This position offers the best footprint for Africa
4.13 RASCOM has secured transponder space on other satellites for pilot operations prior to the RascomStar launch. Usage of these existing satellite platforms will commence in April 2002, just 14 months from now;
4.14 The proposed launch date for the first RascomStar satellite is August 2003 at the latest;
4.15 The opportunity exists for South Africa to migrate its position, from RascomStar to a dedicated SACOMSAT;
5 Ground Infrastructure Company
5.1 RascomStar is a satellite initiative and requires a ground interface
5.2 A Ground Infrastructure Company (GIC) shall be established. The GIC will not compete with existing telecoms. Its functions shall be:
5.2.1 Assist existing telecoms interface with and gain maximum value from the Satellite;
5.2.2 Offer countries financial and technical assistance with their infrastructure requirements;
5.2.3 Provide technical specifications for ground equipment;
5.2.4 Assist in the management and distribution of ground equipment;
5.2.5 Provide a Pan-African regulatory support body;
5.2.6 Training and the issuing of an accredited continent-wide technical certificate
5.3 Importantly, because it will act as a manager of the manufacturing process, as well as providing Pan-African technical and financial assistance and, acting as an interface to the space sector (satellite), the GIC will be in a position to influence the specification and point of manufacture of ground infrastructure;
5.4 The equipment which must be manufactured for the VETs alone, represents an agreement of over R8,5 billion;
5.5 Management and co-ordination offer additional opportunities for revenues to be generated;
6 South Africa: a Unique Opportunity
6.1 Whilst South Africa has an advanced telecommunications, internet and broadcasting infrastructure, a large portion of the country's population is characterised by a low human development index and does not enjoy access to these technologies. South Africa, therefore, enjoys the position to benefit from this satellite initiative, both as a connection infrastructure and as a participant in its greater economic opportunities
6.2 The satellite will offer the following direct benefits to South Africa:
6.2.1 Delivering on Crucial Development Promises: This platform offers the only viable opportunity to bring literacy programs and education to South Africa's disenfranchised, illiterate rural populations, thereby ensuring they are not condemned to continued poverty;
6.2.2 Connection to rural populations: including telephone, broadcasting, internet, medicine and education;
6.2.3 Low cost, high quality links: Satellite provides the most effective means of reaching the rural community. Telephone linkage to a population 30Km or more from an existing telephone hub (PSTN), has been calculated to be less costly via satellite than by wired connection. Furthermore, the cost of satellite linkage is fixed whilst the cost of wired connection increases with distance;
6.2.4 Low cost trunk calls and Direct connection to inter-regional and international points: without having to be directed through, and absorbing the charge of, intermediate switches;
6.2.5 Lower cost satellite connection with consistently high quality to broadcasters in both urban and rural areas;
6.3 All of this will be achieved with a low barrier to entry because the capital cost will be shared by all of Africa;
6.4 South Africa enjoys a leading position on the African continent and is a principal driver of the Millennium Africa Plan;
6.5 The launch of the satellite will offer South African business an opportunity to increase its exports to the continent. Opportunities include:
6.5.1 Broadcast content;
6.5.2 Education and literacy programs
6.5.3 Telecommunication services;
6.5.4 Manufacturing equipment for satellite linkage and communication;
6.5.5 Export of products and services into Africa;
6.6 South Africa has been invited to participate in the investment and management opportunity which the project offers and indeed took a commanding role at its inception;
6.7 Importantly, South Africa can easily extend its ambitions toward its own satellite
6.8 Of further importance is the value of infrastructure manufacture that South Africa could attract;
6.9 RASCOM and its partners are open to both South Africa's co-ownership in the satellite and leading role in the GIC company and the manufacture of equipment. Thus, investment in RascomStar represents the further potential for a National Industrial Offset deal
7 Program Flexibility
7.1 It is recognised that should it be economically viable, South Africa may, in time wish to launch its own, dedicated satellite. An initiative, named SACOMSAT has already been proposed to fulfil this objective;
7.2 SACOMSAT and RascomStar are not opposed ventures. They are, in fact, two components of one project to ensure the best delivery to South Africa and all other African countries
7.3 The current shareholders in RascomStar Limited have offered to support through a stepping stone proposal, which will allow South Africa to migrate its position in RascomStar by:
7.3.1 negotiating for a dedicated South African owned satellite to be launched at a later stage, at an adjacent secured space slot;
7.3.2 increasing its share of RascomStar;
7.4 This stepping stone program will afford South Africa an accelerated and cost effective entry into satellite ownership, without compromising any long-term ambitions it may have;
7.5 The program will additionally fast track skills transfer, investment, infrastructure establishment and delivery of services to rural populations;
7.6 RASCOM is additionally willing to consider a number of financial relationships with South African organisations. These include co-ownership and transponder leases;
8 A Critical Time
8.1 RASCOM is currently finalising agreements with participating countries;
8.2 South Africa has been identified as a key, strategic participant and RASCOM is looking for South African leadership in this project;
8.3 Importantly, the committed signatories to RascomStar are insistent that the satellite be launched by no later than August 2003. This unfortunately dictates a timetable
8.4 RASCOM requires an agreement with South Africa by the end of April 2001;
8.5 The project is still flexible to South Africa's involvement, in both the Space sector and GIC, as well as, it's technical requirements. Unless a firm commitment is made within the next 90 days, alternate arrangements, will have to be made. These will drastically reduce the opportunities open to South Africa;
8.6 All financial models show that private business prefer urban and corporate investment opportunities over low usage rural income potential. This further disenfranchises the majority of the South African people and obliges Government to intervene;
8.7 RascomStar offers South Africa a powerful delivery mechanism, which will bring communication, information, entertainment and education to the marginalised populations at a low cost;
8.8 Considering the country's leading position in Africa, RascomStar further offers South Africa the opportunity to expand its service offerings into the greater African continent. RascomStar offers the best opportunity to secure and leverage this position;
8.9 RascomStar provides South Africa with an opportunity to fuel the MAP;
8.10 The exclusion of South Africa from RascomStar, negates the stepping stone process to SACOMSAT and will effectively exclude the RascomStar participating countries from SACOMSAT's Pan-African potential user market;
8.11 Thus, considering both the world's new age of economic advancement and the project time path South Africa must now seize the leading role of RascomStar;
8 Investment Returns
8.1 RASCOM involves two participation points:
8.1.1 Space Segment: $40 million in a co-ownership opportunity;
8.1.2 Ground Segment: $60 million in a project to support other African countries in their ground infrastructure deployment;
8.2 Participation in RASCOM is driven by both qualitative and quantitative functions;
8.3 Qualitatively, the project delivers to the populations of Africa, especially the black and rural populations of South Africa, access to the driver of human and economic development;
8.4 Quantitatively, participation in RASCOM involves a significant, but relatively modest capital investment which will generate a substantial return
8.5 The direct returns on investment, which South Africa would enjoy from the project are dependent upon the manner in which South Africa chooses to invest in the program.
8 6 The viable option is participation option is Co-Ownership. Here, South Africa will co-own RascomStar and benefit from a return generated through the accumulated African usage of the satellite. The return on investment would be driven by the usage volumes:
8.6.1 The $40 million Investment will attract a 20% co-ownership position;
8.6.2 The direct returns, after tax, under the co-ownership option are:
8.6.2.1 Space Segment: 21,6% after tax;
8.6.2.2 Ground Segment. 46% after tax;
See Babcock and Brown report for further information
8.7 Tax, which is a real income for government is put at over $100 million
8.8 South Africa will enjoy the following benefits:
8.8.1 Leadership of Africa's telecommunications, broadcast and internet usage, the prime drivers of the African Renaissance;
8.8.2 Manufacture and export of ground equipment;
8.8.3 Joint management of the project
8.8.4 Extending South Africa's telecommunications and broadcast strengths into Africa;
8.8.5 A secured position in Africa's telecommunications;
8.8.6 Importantly, migration toward a South African satellite does not only involve a technical, legal and financial transfer, but also requires proven human ability. The skill transfer program inherent in co-ownership will increase South Africa's already well-founded experience, in space segment management;
8.9 The opportunity for a National Industrial Offset arrangement, which, will start with an R8,5 billion manufacturing order for VETs alone;
9 Conclusion
9.1 As information transmission has taken a key position in economic development, satellite technology has become a critical element in bridging the social and economic gap which exists between Africa and the developed world;
9.2 Commitment to this Pan African satellite initiative is the single, most powerful, all pervasive, step South Africa can take in promoting the African Renaissance;
9.3 Indeed, failure to embrace this opportunity will further handicap the continent;
9.4 RASCOM provides an opportunity to bring telecommunications to the entire African population
9.5 The initiative will deliver to the rural South African population, which is today largely marginalised, literacy, education, information, entertainment and medical aid;
9.6 South Africa is uniquely positioned to enjoy the direct benefits of a satellite link, in ensuring population development and economic competitiveness, as well as capitalising on the economic, leadership and training opportunities of such an initiative;
9.7 This project includes a lucrative National Industrial Offset opportunity with an initial order of R8,5 billion;
Appendix 2
TELKOM PRESENTATION TO THE JOINT COMMITTEE ON COMMUNICATIONS, TRADE & INDUSTRY AND FOREIGN AFFAIRS ON PLANS AND PROGRAMMES FOR "AFRICA CONNECTIVITY"
13 March 2001
Chairpersons, Honourable Members and guests. Telkom would like to thank you for this opportunity to brief this Joint Committee on it vision and programmes for the development of "Africa Connectivity".
TELKOM'S VISION FOR "AFRICA CONNECTIVITY" can be summed up in 3 main points:
-Firstly, Telkom's vision for "Africa Connectivity" is to promote connectivity between countries on the continent. To achieve this vision we have adopted a preferred business model of providing infrastructure, as infrastructure is the most important element lacking for the provision of communication services on the continent.
-Secondly, Telkom's preferred business model also places the most value on African Operators being the owners of that infrastructure. Building and operating such infrastructure on this continent is critical for addressing important issues such as:
· skills development
· employment creation
· the retention of revenues on the continent.
In other words Africans should not be passive consumers of services and technologies by the rest of the world BUT should be the OWNERS and DRIVERS of such developments on the continent.
-Thirdly, Telkom's business model further focuses on the provision of services of all kinds using all available technologies optimally and economically.
TELKOM AFRICA CONNECTIVITY PROGRAMME:
SAFE/SAT3/WASC Project
-Paved the way for an undersea optic fibre system that will cater for the continents burgeoning telecommunications needs for up to 25 years.
-A US$ 630 million project for an 80 gigabit link (with capacity equal to 960 000 simultaneous telephone conversations), has brought together 40 nations and some of the world's most influential telecommunications players.
-Expected to be fully operational in December 2001, this system will stretch nearly 28 000 km and will link Africa to Europe and Asia. The cost of transmissions is estimated at one-hundredth that of a comparable satellite transmission.
-One of the major benefits of the projects is that it will be owned, controlled and maintained by the individual operators. Whereas an estimated 80% of Africa's telecommunications revenue currently flows out of the continent, revenue generated by the country to country operators will remain in Africa - which is critical to the economic development of the continent as a whole.
26 Direct links into other African countries
-using a combination of technologies including satellite and terrestrial links
The Southern African Interconnection Initiative (SRII)
-The SADC telecomms association SATA agreed and launched the Southern African Interconnection Initiative (SRII) in Mauritius in December 1999.
-This initiative encompasses all SADC countries.
-There are already projects underway and these include:
-Data links between RSA - Lesotho - This project is funded by Telkom
-RSA - Zimbabwe: upgrade of links to digital microwave. This project was agreed on in December 2000 and is now 15% implemented. It is funded by Telkom with management of the network in Centurion.
-The Southern African Interconnection Initiatives are always bilateral within the SADC ambit - as payment arrangements are bilateral and easier for two countries to agree than three or more countries at a time.
TELKOM'S POSITION ON RASCOM
BACKGROUND:
-Telkom SA is a shareholder in RASCOM having invested 250 000 USD for a 3,876% stake.
-Telkom is also a signatory to the RASCOM agreement on behalf of South Africa
-RASCOM was founded to provide struggling African countries with the bulk buying power of numbers to buy space segment from INTELSAT - using that power to buy bulk space at a discounted price. However, since its inception in 1992, RASCOM has been unsuccessful in this regard.
-The primary objective of RASCOM has been to launch two dedicated satellites for Africa - a decision Telkom did not support for the following reasons:
1.Telkom has invested in the sat3/wasc/safe project, which is more efficient, more robust, more reliable and cheaper than satellite.
2.The RASCOM 'Star' project does not meet Telkom's business needs as Telkom has always obtained capacity from INTELSAT at very good rates - in fact, at better rates than the Star project will offer (based on the current business plan). The Star prices are therefore not competitive and DO NOT make business sense for Telkom.
3.The cost and affordability factor: The main benefit of the Star project would be rural telephony via satellite. However, this will be extremely costly, as satellite will be used for the local loop.
4.The switch-on for Star would be in 2003. This will be too late to benefit Telkom in its rural rollout, as our universal service obligations have to be achieved by 2002.
In terms of Telkom's licence - we have certain targets to achieve by the end of the exclusivity period in 2002:
-2.8 million new subscriber lines
-3200 rural villages to receive service
-20 000 priority customers to receive service
000 new pay-phones to be installed.
5.Telkom can still purchase capacity from 'Star' as the need arises without being an investor in the system. Currently, there is no such need.
6.Lastly, and most importantly is the issue of African ownership. The RASCOM satellites would be provided on a Build-Operate-Transfer or BOT basis by Alcatel, a French Manufacturer. Parties of RASCOM will have a 10% equity stake in the BOT Company.
Here I would like to reiterate Telkom's vision for Africa Connectivity:
Telkom will support initiatives where Africans are the owners and drivers of connectivity on the continent - and not just passive consumers of services and technologies, as will be the case with the 'Star' and 'Africa One' projects.
Telkom wants to see skills development and employment creation on this continent and we want revenues to be retained here, in Africa.
In conclusion, Telkom will support connectivity initiatives that are owned within Africa, that benefits Africa and not further exploits our continent.
END
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