New cables to tie Africa to Internet

LAGOS, Nigeria | For a decade, West Africa’s main connection to the Internet has been a single fiber-optic cable in the Atlantic, a tenuous and expensive link for one of the poorest areas of the planet.

But this summer, a second cable snaked along the West African coastline, ending at Nigeria’s commercial capital, Lagos.

It has more than five times the capacity of the old one and is set to bring competition to a market where wholesale Internet access costs nearly 500 times as much as it does in the U.S.

It’s the first of a new wave of investment that the U.N.'s International Telecommunications Union says will vastly raise the bandwidth available in West Africa by mid-2012.

“Africa is sort of the last frontier here,” said Paul Brodsky, an analyst at the research firm TeleGeography in Washington, D.C.

The effects already are being felt in Ghana. Kofi Datsa, general manager of Internet-service provider DiscoveryTel Ghana, said it has seen the monthly cost of the access it buys from larger telecommunications carriers drop more than a quarter to $1,625 per megabit per second, from $2,250, in recent months.

The carriers, fearing they could lose customers, have started cutting prices ahead of the new cables landing in the country.

Mr. Datsa said he expects his bandwidth costs to drop further in a couple of months, to $350 per megabit per second. By the end of 2011, when two other cables will have gone live, that could go as low as $225, he says.

But that’s still high. In the U.S. and Europe, wholesale Internet connections cost $5 to $10 per megabit per month in major cities, according to TeleGeography.

It’s not clear exactly when the cheaper prices will trickle down to the consumer level, but Mr. Datsa said he expects that to happen fairly quickly, as there’s plenty of competition, with 25 registered ISPs in the country.

According to the Ghana Internet Service Providers Association, a typical DSL package costs $32 a month, about two-thirds of the average monthly income in the country. It’s far slower than DSL service in the U.S., which costs about the same.

The ITU found that 32 million sub-Saharan Africans, or 3 percent, had Internet access in 2008 — the latest figure available. But that number was growing at almost twice the world average rate.

“Internet growth in Africa has been phenomenal and has not shown any signs of being diminished by the worldwide slump in the economy,” said Prince Radebe of South Africa’s Telkom SA, which has a stake in the older cable. “The investment in international submarine cables will further unlock this growth.”

Even with added international communications capacity, Africa still faces another problem: In many places, it doesn’t have the fiber cables necessary to carry the signal inland from the shores, said Abiodun Jagun, a lecturer at South Africa’s University of Witwatersrand.

And in the countries where there is an expansive network of terrestrial fiber-optic cables, such pipes are controlled by telecommunications operators that close them to rivals or charge a hefty premium for Internet traffic.

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