The construction of an undersea  fibre-optic cable along the eastern coast of Africa began on Friday.

The East African Submarine Cable System (EASSy)  that aims to significantly lower communication costs will connect 21 African countries to each other and the rest of the world with internet services.

The World Bank’s private sector lender International Finance Corporation (IFC), one of the financiers of the project,  said the necessary funds have been provided by the consortium of 25 telecommunications operators, which include 19 African companies.

The cable will be installed by Alcatel-Lucent along the seabed off Africa’s east coast. It is expected to be operational in the first half of 2010.

Communications

“We are pleased to work with the EASSy Consortium in laying this new cable that will expand communications capabilities and help reduce the digital divide in the region,” said the president of Alcatel-Lucent’s submarine network activity, Mr Etienne Lafougère.

Five major development finance institutions are partnering to provide the project’s long-term loan financing of $70.7 million (Sh4.4 billion), with $18.2 million (Sh1.1 billion) coming from IFC. The EASSy consortium members will provide the balance of the cost, $247.1 million (Sh15.5 billion).

“We are very pleased that this long-awaited submarine cable has formally been sponsored by the majority of the regional operators and by some of the leading international industry players,” said IFC’s director for Global Information and CommunicationTechnologies, Mr Mohsen Khalil. The cable is targeted at connecting 250 million users.

Barrier in usage

Consumers on Africa’s east coast typically pay between $200 (Sh12,620 and $300 (Sh18,930) a month for Internet access via satellite.

These prices, some of the world’s highest, create a barrier to usage and restrict economic activity and growth, according to the bank. Once the EASSy cable is in place, prices for international connectivity are expected to drop by two-thirds at the outset, with the number of subscribers  increasing rapidly.

Because the project gives open access to service providers, prices will fall further as volumes and competition increase, the statement said.

Low-cost internet

This is expected to stimulate the development of new knowledge-based industries, call-centres, and similar ventures.

Educational and health activities in the region will also benefit from access to low-cost internet.