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Johannesburg - Technology group Altech said it has acquired an 8.5% stake in the East Africa Marine System (Teams) data cable via its subsidiary Kenya Data Networks (KDN).
The 5 000km, $130m undersea fibre-optic cable project is being spearheaded by the Kenyan government and stretches from Mombasa to Fujairah in the United Arab Emirates.
The $11m investment by Altech KDN bought it a 10% voting right along with the effective 8.5% equity stake in Teams. Altech said it will fund its portion of the purchase price from cash reserves.
Said Altech CEO Craig Venter: "Africa is in the infancy stages of a sustained growth trajectory in broadband across multiple technologies, services and geographies. The acquisition of a stake in Teams complements KDN's strategy of being a cross-border, Pan African network operator.
"Shareholders in Teams will be allocated cable capacity proportionate to shareholding. KDN's stake will thus grant us access to additional bandwidth, provision for redundancy of broadband connectivity and significantly increase KDN's service quality, all the while unlocking a wide range of additional services for the group as a whole," he said.
KDN is 60.8% held by Altech.
Altech said that, with terrestrial fibre laid in Kenya, Uganda and soon Rwanda, the acquisition of a stake in Teams is a perfect fit for KDN's plans.
In August 2008, KDN became the first ICT company to construct a termination point at the Kenyan coast in anticipation of the landing of East Africa's three international undersea cables.
KDN said its fibre-optic cable will connect the undersea cables that land in Mombasa to the rest of East Africa, creating a five-country, fibre-optic terrestrial network linking Kenya, Tanzania, Uganda, Rwanda and the DRC.
Altech also predicted cost savings from the investment.
It said the price for satellite connectivity is $1 900 per Mbps per month in Africa, whereas the expected price for submarine cable connectivity drops dramatically to $90 per Mbps per month. This cost is anticipated to decline even further to $27 per Mbps per month by 2020.
- Fin24.com