The SEACOM Story
Financial Mechanisms: Meeting the Challenges of ICT for Development,
Geneva, Switzerland
October ’09
1
SEACOM snapshot
SEACOM is a privately funded African company, offering a 1.28Tb/s submarine fiber optic
cable system linking Africa to Europe and Asia via the Middle East
“SEACOM is open for business and ready to supply complete solutions for Africa’s Broadband on Demand
needs”
SEACOM’s drivers
Fibre topography
 Wholesale provider of bandwidth
 Deliver infrastructure support for the growth of the
ICT sector, e.g. BPO, call centers, education
 Be committed to the principles of open and
equitable access to broadband
 Facilitate the development of high volume, low cost
market encouraging new industries to emerge,
stimulating further demand
 Compliment GSM and fixed line national carriers by
providing low cost high capacity bandwidth and
additional redundancy
 Be fully funded & majority African owned (76.25%)
2
Agenda

Identifying the need

Defining the product

Raising capital

Cable route planning

Overcoming challenges

Construction phase

SEACOM post-construction

SEACOM way forward

Broadband way forward for Africa
3
Identifying the need
Africa has been starved of a key foundation to social and economic growth - high capacity,
cheap broadband
Where is Africa now?
Broadband for Africa…
 Africa is the least penetrated continent in the world
 East Africa has been solely dependent on often costly
and high latency satellite, until now…
 “Every 10% increase in high-speed
Internet connections in developing
countries resulted in an increase of
1.3% in economic growth”1
 Broadband is to the 21st Century what
railways were to the 20th Century”1
Broadband is the foundation of
economic growth
 Africa must move fast, despite the
excitement of SEACOM, the digital
divide is getting larger, not smaller
Source: ‘Broadband penetration’ WBIS 2008
1WorldBank Q2 2009
4
Defining the product
In order to address Africa’s broadband needs, SEACOM’s business case had to focus on an
open access, low cost service that travels right to the point of need not just the shoreline
1
2
Affordability
 Target those in need – East coast
 Ensuring ‘open access’ policy
consistent with the Kigali protocol
Core ideas
behind
SEACOM’s
business
case
 Under no circumstances hinder the
progress of healthy competitors
 The “Death of distance” through a
single price
 Providing services to medical &
educational institutions, partnering
with Ubuntunet & TENET
Accessibility
 True end-to-end solution from
London to Johannesburg, from
Mumbai to Nairobi…
 Focus in getting backhaul to
landlocked countries in need
 Working in harmony with existing
channels and building redundancy
 Applying best practice risk
management & disaster recovery
across the full value chain & 24
hour global support
Without true open access, Africa will limit the potential of tomorrow’s unkown
innovators
5
Raising capital
SEACOM sought funding for the cable project through a combination of debt and equity
76.56%
African
Industrial Promotion Services – 26.56%
Venfin – 25%
Convergence Partners – 12.5%
Shanduka – 12.5%

No national telecommunications operators

Strategic value add

Sector knowledge and relationships

Financial backing - Proven access to equity and
debt funding

Venture/Seed Capital

Mega-Project Developers

Management expertise

Venture capital funded in 2006 & 2007 for
development and long lead items

Fully and irrevocably funded in November
2007 for project capital and debt (provided by
Nedbank Capital and Investec Bank) and
operational actualization;

Project ran on budget and schedule.
Equity
23.44%
International
Herakles Telecom
Debt
Nedbank and
Investec
6
Construction planning
SEACOM worked with Tyco to outline the cable structure
Network Schematic
Design Information
 Dual fiber pairs service Kenya,
Tanzania, Mozambique and
Madagascar
 In the event of damage to the
Mediterranean portion of the cable,
the system can be switched in Egypt
onto one of several other cables
through the Mediterranean.
7
Our approach to overcoming the barriers
After financial closure, but prior to construction of the cable, SEACOM had to develop a
strategy for addressing the various challenges
 Working with governments to find solutions to problems, sharing knowledge
and best practice across the sovereign nations
Regulatory
 Obtaining permits from countries who have never dealt with an undersea cable
before
 Each decision and signed document impacted multiple countries with various
tax laws that impacted each leg of the cable differently
SEACOM’s
approach
to the
various
challenges
Sociopolitical
Environmental
 Ensuring the highest precautionary measures were in place at our landing
stations and along the ship’s fiber cable laying routes, at the expense of time
where needed
 SEACOM completed all marine and onshore survey work to ensure that best of
class environmental practices were being implemented during construction
(e.g. portions of the cable were carefully laid by hand to ensure no damage to
coral reefs [Equator principles])
8
Construction phase
SEACOM cable ship in action
9
Construction phase
SEACOM was the first to complete construction on the eastern Africa route to Europe and
India
Branching Unit 1 (Off Maputo) Entering the Water Off
the Stern of Tyco Resolute 10 Feb 2009
Dar Es Salaam Cable Landing at Silver Sands Station
17 Feb 2009
Mtunzini Station Modules Being Placed on
Foundation - 16 Feb 2009
The Third and Final Cable Ship Tyco Responder Loaded
and Steaming to Mumbai to Begin Cable Lay
17 Feb 2009
10
Construction phase
Tyco hard at work with cable laying (left) and setup of the cable landing stations (right)
SEGMENT 02 MAPUTO TO BU-1
TOW WINCH TRIALS USING THE SEA PLOW
LATITUDE: 25°51.69’S, LONGITUDE: 033°04.31’E
23 JANUARY 2009
Dar Es Salaam Station Modules Delivered for Transport
to Silver Sands Hotel Cable Landing Site on 31 Jan 09
11
Construction phase
Various snapshots along the journey
Off Suez – Tyco Reliance Laying Cable in Red Sea Crossing
Pipelines 7 Feb 09
Off South Africa – Tyco Resolute Lays 38km cable on 17 Jan
09 (See Photos in Next Charts)
Mombasa – Station Placed 23 Jan 2009
Dar Es Salaam Foundations Poured 11 Feb 09
Off Mozambique – Tyco Resolute Laying Cable 15 Feb 09
(See Photos in Next Charts)
Maputo - Alex Nheve Sta. Mgr & Castigo Chucane, Sta. Engr. w Keys 24 Nov 2008
Maputo – Cable Station 4 Nov 2008
12
Construction phase
View on the inside of a cable landing station
Mumbai Landing Station Installation 16 Jan 2009
Mumbai Power Feed Equipment 18 Jan 2009
Mombasa – Stations In Place - 17Jan 09
Mumbai Terminal Equipment
Being Installed 18 Jan 2009
Djibouti Terminal Equipment Being Installed
13
Construction phase
What fibers look like
The Third and Final Cable Ship Tyco Responder Loaded
and Steaming to Mumbai to Begin Cable Lay
17 Feb 2009
14
SEACOM post-construction
Live on 23 July 2009
Within 3 days Kenya
reports 3-5 times
increase in internet
speeds
Within 14 days
Safaricom CEO reported
200% increase in data
traffic
“Broadband is the key to
launching Africa onto
the global stage”
Hamadoun Touré
15
SEACOM way forward
SEACOM’s strategy going forward will be to continue to pursue various business areas in
order to fulfill Africa’s unmet broadband needs
Addressing the needs of bandwidth hungry African economies
Removing national and
international infrastructure
bottlenecks
Facilitating research &
education through
discounted bandwidth
Supporting the east and
southern African economic
growth by significantly
lowering communications
costs
16
African broadband way forward
As demand for broadband continues, the market will depend on customizable and
integrated solutions to grow market share...

Broadband demand is not going to taper out….it is going to continue on this
curve

The full value chain will be opened up allowing for low cost access right from
the international long haul to the last mile to all Internet Service Providers

There will be significant M&A activity as more services get bundled in the
quest to customize solutions and minimize churn

SEACOM is committed to share this journey…
17
End – Thank you
18