2Africa Advisory - The Leviathan Awakens

1. The West coast network from Lisbon and London to South Africa should be all activated by year's end.

2. Note that 2Africa is an open cable system which means each fibre pair and spectrum owner is responsible for their SLTEs. So it quite possible that consortium member X is ready today whereas member Y might be RFS only in December.

3. RFS Guidelines

A. London, Ghana, Nigeria, and South Africa will be RFS at the beginning of September.

B. Côte d'Ivoire should be live a month later.

C. Senegal is at least 2 to 3 months from launch and could be as late Christmas.

4. Buying Guidelines

A. I expect the combined impact of 2Africa and Equiano to drive Lisbon/Lagos 100G market pricing below $20K. On this route I recommend 1 year contracts.

B. In Senegal, Ghana, Ivory Coast, and DRC you should do long term contracts because there is no guarantee that 2Africa will permanently lower pricing. Short term the cable will do so. But it is least 2 to 5 years before another modern cable lands on the West Coast so capacity shortages are quite possible. The best short term opportunity for more capacity is the Mediterranean cable Medusa, which is looking to extend its network down the West Coast, but even if it secures the required financing, actual deployment would take at least 2 years.

C. In the DRC the 2Africa CLS is a prefabricated modular data center located by Bharti. Connectivity to that site is limited. The consortium plans to build a fibre ring from the Pointe Noire CLS to the Brazzaville OADC, but digging has not yet begun.

D. Most 2Africa consortium members will hand off waves at the Dakar ONIX data center, but it's empty right now so Senegal service is unlikely for at least 3 months.

E. If you need dark fibre or lit metro waves to the 2Africa CLS in Abidjan, I can help. A high count cable was recently installed into the CLS.

F. In Ghana both dark fibre and route protected 100G waves are available between Digital Realty, where the 2Africa CLS is located, and PAIX.

Yes, the 2Africa map is out-of-date because it doesn't include the Pearls component. But it is accurate as regards the West Coast.

Map of the Fibre Optic Subsea 2Africa Cable

Map of the Fibre Optic Subsea Equiano Cable


Comments

Post a Comment

Popular posts from this blog

Breaking Story: Facebook Building Subsea Cable That Will Encompass The World

Image
Several sources have whispered in my ear that META is planning a new 16 fibre pair cable that will encompass the world going from the US East Coast to the US West Coast via the Atlantic, Indian Ocean, and the Pacific. The most ambitious subsea project ever undertaken. I do not know the exact routing. I know that the cable will launch from the American East Coast and will go down the West African Coast to South Africa and then head straight to Mumbai. It is not clear if Europe will be online or not. From Mumbai it will head straight to Australia and then up to the US West Coast. I speculate that there may be branching units to Singapore, Malaysia, and Indonesia. But the basic routing is US/South Africa/India/Australia/US. What is not clear is if there will be branching units to add more countries to the cable.  This semi-secret cable reflects META's desire for network resiliency given the four month Red Sea down time that AAE-1 and other subsea cables suffered during the first half ...
Read more

Facebook's Semi-Secret W Cable

Image
 A few days ago I wrote that Facebook was planning a new subsea cable directly linking the US East Coast to South Africa, then up to India, onward to Australia, and finally to the US West Coast. Clearly resiliency is a big theme. It avoids Lisbon, Marseille, Egypt, the Red Sea, and Singapore. All choke points due to their telecom hub status. Note that the map below shows lots of branching units, but I don't have insider confirmation although they make perfect sense. The cable is 16 fibre pairs.  This cable may be heavily influenced by AI considerations. AI data centres require lots of space and power. The US, South Africa, India, and Australia are good candidates for AI data centres in terms of space. All of them except for South Africa have modern power grids. But South Africa is still the best place on the continent for large scale AI facilities. An AI theme makes particular sense given the cable's high latency. An AI data centre does not directly serve custo...
Read more

How To Calculate An IRU Price For a 100G Wavelength

The IRU price should reflect your forecast of future lease revenes. If the current MRC is high and prices have been stable and are expected to remain so, then the opportunity cost of selling an IRU is high. You are sacrificing a lot of lease revenue if you sell that capacity. In this case the upfront IRU price should equal the three year MRC multipled by 4 to 6 years. So if the three year Faster cable MRC is $17K, then 48x to 72x times that number is fair value. So 48*$17K=$816K. Plus a standard 4% annual fee to cover the wavelength's share of maintenance and operations.. So strong markets and tight capacity mean that leasing is more attractive than IRUs to the supplier. Vice versa, the buyers will be desperate to lower their long term costs via an IRU. In my example, $816K divided by 15 years equates to $4500 per month excluding O&M. Bad for the seller. Good for the buyer. That's why so many of you are looking for IRU capacity to resell to your clients, but finding few se...
Read more