African Comtel fibre project hit by Ericsson pull-out

22 Jun 2005

Pan-African fibre-optic network consortium the Common Market for Southern and Eastern Africa (COMESA) was dealt a heavy blow this week with the news that Swedish technology giant Ericsson has reversed its decision to invest in its regional connectivity programme. COMESA is attempting to establish an 18,000km fibre-optic and microwave network – Comtel – linking the networks of national telcos in 21 African countries. The operators have agreed in principal to harmonise regional tariffs and network interconnectivity. The Comtel venture has received funding from the African Development Bank (ABD), as well as a promise of assistance from the Indian government in developing regional infrastructure. If it goes ahead it will be 25% owned by the operators themselves, with strategic equity partner Anderberg International holding a 30% stake, and other private investors 45%. The project’s business plan was finalised in mid-2003 and it is expected to launch services in 2006, although difficulties in obtaining external private funding now seem likely to delay the venture. Before pulling out of the deal, Ericsson was Comtel’s only confirmed private investor outside of the participating countries.