Neotel, South Africa's second national operator, and SEACOM, the developer of a private submarine fibre optic cable, which will connect South and East Africa to Europe and India, have agreed to commercial terms for the partnership of landing the SEA Cable System in South Africa. Through the partnership, Neotel will own the cable landing station and all facilities within the South African territory. The terms of the agreement ensure that the operation of the cable will meet current and future regulations, in line with the Electronic Communications Act of 2006. Neotel will operate the facilities on an open access basis; Neotel and SEACOM believe that such a policy will stimulate the South African international bandwidth market and make available affordable bandwidth to South African customers.

The SEA Cable System will connect South Africa to Europe and India, with the route passing along the East Coast of Africa and through the Red Sea before terminating in Italy. In addition, it will land in Mozambique, Madagascar, Tanzania, Kenya and UAE along the route.

The cable system is planned to be commissioned and ready for service by early 2009, with construction expected to start later this year. The SEA System has a design capacity of 1.28 Tbps, in order to support the expected exponential increase in demand in 2010 and beyond.

"The structure of the project is established to act as an international complement to the national carriers of East and South Africa. SEACOM believes that these markets have high pent up demand, due to the current high price of bandwidth. This cable will offer international capacity on lease and IRU basis (Indefeasible Rights of Usage) at costs that are 70% to 80% less than the current satellite pricing. The expected future demand for bandwidth is expected to grow exponentially, as file sharing and streaming video applications become accessible to the retail user at an affordable price", says Brian Herlihy, President, SEACOM. "International submarine fibre optic cables are a necessary complement for the emerging last mile technologies such as 3G, WiMAX and fibre to the home; removing the international capacity bottleneck that exists in the region today", he says.

The SEACOM and Neotel agreement requires complete open access for all carriers to co-locate their equipment directly on the cable. SEACOM and Neotel are also in an agreement to provide a backhaul solution to Johannesburg to remove the backhaul bottleneck and permit customers to access the cable directly in a Point of Presence in South Africa's major business centre.

"Neotel is committed to bringing in a new era in the telecoms industry of South Africa, and we aim to reduce the cost of doing business in the country through better value-for-money, leading edge, telecoms products. A key enabler to this objective is the availability of multiple international routes connecting South Africa to the rest of the globe. The SEACOM project is an initiative towards this end", says Mr. Ajay Pandey, MD, Neotel.

Neotel has already launched its wholesale international services as the first-ever truly global Tier 1 operator for South Africa, by extending the vast international network of VSNL International (Neotel's strategic equity partner) into the country through a point-of-presence in Johannesburg. Neotel's network enables other South African operators and service providers to directly connect globally from Neotel's Johannesburg POP. This capability will grow significantly with the deployment of the SEA Cable System.

Neotel supports NEPAD's principles with regard to the deployment of submarine and terrestrial fibre systems in East and Southern Africa. Neotel has announced its participation in the EASSy submarine cable system project, and has been pursuing the process leading on to the termination of Telkom's exclusivity on the cable capacity of SAT-3/SAFE for South Africa.

"We would like to see multiple options opening up for international connectivity from South Africa, and remain committed to the success of the various international projects. We believe that with competitive international capacities available, pricing for international services will become more reasonable, serving to stimulate demand further. The FIFA World Cup 2010 is likely to see unprecedented demand for international bandwidth for its HDTV broadcasting requirement alone, and with various other projects such as the South African National Research and Education Network (SANReN) and Square Kilometre Array (SKA) still in the pipeline, we believe that a strong business case exists for the SEA Cable System", says Mr. Pandey.

About Neotel
Neotel is the first national infrastructure-based competitor in the fixed line telecoms sector in South Africa. The company aims to reduce the cost of doing business by enhancing the operational efficiencies of companies through the optimal use of advanced communications technologies, and to extend these benefits into the second economy. Much has changed in the telecoms market in recent months, in South Africa as well as globally. Recognising the changing requirements of telecoms users in South Africa, Neotel is building itself to be a preferred provider of leading-edge telecommunications, well beyond the traditional concept of a fixed line operator. Its various telecom licences, including the PSTS Licence issued to Neotel as the second national operator of South Africa, allow the company to provide the entire range of telecoms services with the exception of full mobility.

About SEACOM
SEACOM intends to construct, finance own and operate a submarine fibre optic cable ("SEA Cable") that will connect South Africa, Mozambique, Madagascar, Tanzania and Kenya to India and Italy, where other international cables currently exist. The SEA Cable will be constructed with private funding and is positioning itself to be a seller of international bandwidth to the African carriers at wholesale prices. The SEA Cable intends to be a compliment to the African carriers that offers PoP to PoP solutions for connectivity in Europe and Asia. Each landing station and collocation center attached to the SEA Cable will be operated on an open access principle to ensure compliance with appropriate legislation and act as a catalyst to the East and South African communication markets. The SEA Cable intends to be operational by the first quarter of 2009.