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Gateway signs up for Seacom bandwidth

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Gateway Communications has purchased a 155Mbps (STM1) circuit from Seacom, which is running the first fibre optic cable connecting South Africa to Europe along the east coast of Africa. 

The new fibre will provide 1,2 Terabits of capacity for Internet, telephone, pictures and other data from South Africa to Marseille via Mozambique, Madagascar, Tanzania and Kenya, and is scheduled to enter service in July 2009.
The cable will dramatically improve the quality of communications on the east coast of Africa, currently served by satellite. It will also offer users an alternative to SAT3 for traffic from South Africa to Europe.
Gateway is the largest private data and voice carrier in Africa, and the decision to contract as an anchor tenant on Seacom reflects the company’s continued investment program on the continent, which has totaled over $200-million during the past two years. Gateway also has an option to purchase further additional capacity on Seacom.
Peter Gbedemah, chief executive of Gateway, says the company decided to back Seacom “because Gateway believes in open access and privately owned telecommunications facilities, which will help to deliver lower prices and increased capacity, with more choices for the companies, operators and people of Africa.
“This contract with Seacom is part of our innovative response to market demand and aimed at helping us retain our position as the number one supplier of data and voice services in Africa,” says Gbedemah.
Gateway has customers in all the countries touched by Seacom, as well as offices in South Africa, Mozambique, Tanzania and Kenya. It will provide high speed MPLS data services between all points on the network, as well as dedicated bandwidth between any landing points on the fibre.
Gateway already provides connectivity for many large organizations in East Africa, including some of the largest and fastest growing mobile operators across the region. These GSM operators will benefit every bit as much as the multinational corporations, such as mining companies, banks and others.  All of them will see an increase in service quality from reduced latency and the huge additional bandwidth provided by Seacom.
Mobile telephone companies are expanding rapidly throughout Africa and the new technologies they are introducing such as GPRS and 3G, which focus mainly on the provision of data, video and other entertainment and services, require huge amounts of new bandwidth to supplement the already waning satellite supply, diminished because of exponential growth in bandwidth demand.
The fibre will enable the easy interconnection of mobile telephone companies and corporations in East Africa. Many of these telephone operators are also constructing in-country fibre networks and cross borders links to landlocked countries such as Rwanda, Burundi and Uganda.
Brian Herlihy, vice-president of Herakles Telecom, the managing partner for Seacom, says the construction contract for the cable was awarded to Tyco Telecommunications on 13 November and production of the cable and amplifiers is underway.
Laying of the cable will start in about 10 months and it will be ready for service in June 2009.
The $650-million cable will cover 13 000km and includes a spur to Mumbai, India.
The investors in Seacom are Industrial Promotion Services (25%) based in Kenya, Herakles Telecom (25%), and South African investors VenFin Limited (25%), Convergence Partners (12,5%), and the Shanduka Group (12,5%). Nedbank Capital, the investment banking arm of South African Bank Nedbank Limited, is the Mandated Lead Arranger for all debt funding requirements of the project and the funding will be provided by Nedbank Capital and Investec Bank.