29 November 2007

Undersea cable for Africa (TEAMS)

In following up to this item, you might be interested in this article, which is relatively rich in cost information. By the way, this site has information on other cable projects as well. Some tidbits for the TEAMS project:

  • The project will involve the construction of a 4,887-km submarine telecoms cable linking the Kenyan coast with the United Arab Emirates (UAE). The project will cost an estimated $110-million (or US$22,500/km). The cable has an expected lifetime of 25 years.

  • "Capacity will be allocated at cost with TEAMs investors paying $400,000 per STM1 per year. This translates to $2580.645 per megabit per year up to Fujairah and $ 215.00 megabit per month."
  • "TEAMs shareholders are expected to operate on an Internal Rate of Return of 32.71 per cent with a pay back of 2.4 years."
  • "Transit costs from Fujairah to Europe and US stands at between $55,000 to $100,000 per year"

The cost is considerably below the estimated US$70,000/km for the Guyana project ... why might this be the case?

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