Thoughts On The State of African Subsea Networks: Sénégal, Ghana, Ivory Coast

1. The Gate to Hell in Dante's Inferno has an inscription stating "Abandon All Hope Ye Who Enter Here". I think he was actually referring to the Senegal telecommunications market. My conversations with African carriers and Tier 2 ISPs suggest that entering the market is extremely difficult. Much more than Ghana, Ivory Coast, Nigeria or South Africa. Only the Sonatel/Orange joint venture (cartel?) has managed to secure a gateway license for 2Africa capacity. This is the consequence of the pernicious and incestuous relationship between Senegal's government and the de facto Sonatel monopoly. 

Developing a country is best accomplished via competition with low barriers to entry, not government sanctioned monopolies with a good dose of under-the-table brown bags stuffed full of Euros and US dollars. 

The Senegal government is spending a huge amount on the Numerique data center and other digital projects, but they will not live up to their promise unless transport prices match those in the blood-stained competitive markets. Sonatel has a stranglehold on metro dark fibre. 

2. Wholesale interest is shifting from African-European connectivity to regional wavelengths linking West African countries to the dominant Lagos telecom hub. CEOs of some Tier 2 African ISPs are telling me that content delivery networks are now bringing desired content to Lagos where it can be distributed. But as Mark Tinka pointed out, it is unlikely that the global delivery networks will devote enough resources to efficiently deliver content to Lagos. It is likely that the Tier 2s will still need 100G waves to Europe despite the Soothing Tale of the World Coming to Africa.

3. Ghana is reaping the benefits of its liberal telecom policy. Small private Tier 2 ISPs are deploying their own fibre between the Accra telecom hotels with Digital Realty and PAIX being the top destinations. 2Africa capacity demand is very strong with some market players casting ACE and WACS aside for the much prettier debutante. Ghana is the Wild West of Africa and I love it. But beware. The lie people are telling themselves is that pricing will crash. Well, it already has in the sense that 2Africa 100Gs are mid to upper twenties including cross connects. But the idea that price will fall below these levels is probably self deception. The 2Africa cable serves over 30 countries. Its 180 Tbps is only six terabits per country on average. So it is pretty hard to see how prices will crash when 2Africa's capacity will be exhausted in two to three years. My advice. Buy a lot now and buy long, not short. 

4. Côte d'Ivoire has more potential than most market observers realize. A number of 2Africa consortium players are licensed to deliver traffic to the country. 100G waves are in the low 30s including cross connects. This represents a 60% cost savings over the older cables using an apples-to-apples comparison. Moreover, I know a plucky Tier 2 ISP that has deployed fibre to the 2Africa POP (Raxio) with links to the other key Abidjan data centers. I recollect just above 60 fibre pairs. I recommend African ISPs seriously consider an interconnection POP there because it is doable and transit prices are high.