29 October 2012

SAEx cable takes important step forward - St Helena branch still in question

eFive Telecoms, the South African company behind the South Atlantic Express cable (SAex), has taken an important step forward as it has awarded TE SubCom with the construction of the planned 9,900km cable from South Africa to Northern Brazil, which is hoped to also connect St Helena.

Since February 2012 eFive's planning and procurement process has been including a branch to St Helena, however it remains unclear if the British government will provide the required funding in order to land the cable on the island.

As desktop studies and surveys are still ongoing eFive is not yet able to provide firm figures, but "financial close" is expected to happen in the first half-year of 2013. Earlier estimates by industry experts indicate costs for the St Helena branch in the range of $10 to 15 million, which amounts to roughly half of St Helena's GDP. Obviously a very substantial amount, which however must be considered against the enormous social and economic benefits associated with the availability of broadband Internet access in such a remote location over the cable's expected lifetime of at least 20 years. Preliminary calculations indicate that the investment would amortize over this period if it stimulated Saints' average monthly GDP per capita to grow by roughly £10.

Besides improving standards of education and healthcare proper broadband connectivity could leverage the United Kingdom’s efforts to render St Helena self-sufficient through establishing a tourism sector, notably through the funding of the airport project worth £250 million, and in addition it could create more diversified economic development opportunities in the ever-growing global Internet economy.

In 2011 the Seychelles with a population of 90,000 succeeded in a similar project when funding for a 1,930km submarine link to Tanzania worth $ 35 million was secured through debt from the European Investment Bank and the African Development Bank while the archipelago's government and its two telecom carriers contributed 40% of the costs by equity. A year earlier Colombia built an 810km submarine cable connecting the island of San Andréas, inhabited by some 70'000 people, in the Caribbean Sea to the mainland for $ 55 million. These projects involved significantly lower costs per capita, but if adjusted to the UK's much higher GDP per capita, the estimated costs for landing the SAex cable on St Helena appear proportionate.

Instead of immediately connecting St Helena during the initial laying works an underwater branching unit with a so-called "stub cable" could be pre-installed allowing to lay a branch to St Helena at a later date. Cost for such pre-installation are believed to be about 20% of the cost to make the full connection. This would also have to be planned from the beginning of the construction phase. However the cost to deploy a vessel to install the branch at a later date would increase overall costs by at least 30% compared to a full installation from the beginning, while operating life would be shorter.

During the next months the St Helena Government and the UK Department for International Development are expected to carry out economic assessment works and to decide on the matter.

High-speed broadband would be huge for education. Not only could we make better use of online materials, but with affordable broadband teachers could develop their practice from home.
I'm an IT engineer and I would love to return to my island to start an IT business, but because of the slow, expensive and unreliable internet connection this is simply impossible.
I had to leave St Helena to study. Being 5000 miles away from my family and friends is hard. Not being able to skype with them due to the slow and expensive internet on St Helena is even harder.
Socioeconomic status is now heavily reliant on broadband penetration. With the ever-growing importance of the internet, St Helena with its limited access is in danger of being left behind.