- BRICS business leaders acknowledge the strategic value of a new cable to directly link the BRICS economies.
- At the recent BRICS Forum held in New Delhi, India, the project was included in the joint declaration as a project of strategic importance for BRICS.
- 34 000 km cable to link Russia, China, India, South Africa, Brazil – the BRICS economies – to the United States.
- All the governments of the BRICS economies have already been consulted on the project and have given their in-principle support.
A new submarine cable system was recently unveiled at the BRICS (Brazil, Russia, India, China and South Africa) Business Forum held in New Delhi, India. Andrew F B Mthembu, Chairman of i3 Africa and Imphandze Investments – the two South African entities promoting the project – presented the BRICS Cable which was welcomed as a strategic project for the social and economic benefit of the BRICS countries.
The business leaders of the BRICS countries engaged in discussions about critical areas of development, including:
- Enhancements to financial connectivity for increasing trade and investment opportunities between the BRICS countries;
- Key role of ICT and innovation to improve business exchanges;
- Co-operation for energy security with focus on green and renewable energy;
- Importance of co-operation in Life Sciences to BRICS growth potential, and
- Role of BRICS countries in ensuring global food security.
The BRICS Cable has been in the planning and feasibility stages since March 2011, a few months after the admission of South Africa into the BRICS economic bloc. Currently, the BRICS countries are connected to each other via telecommunications hubs in Europe and the USA resulting in high costs, and the risk of potential interception of critical financial and security information by non BRICS entities. The recent discussions at the BRICS Business Summit concluded that a critical factor of success for the various initiatives relies on an advanced high-speed communication infrastructure. This also has to ensure high-capacity and direct connectivity between the BRICS countries to offer ubiquitous and reliable services.
On the basis of the discussions held and the information unveiled, the BRICS Business Forum in a joint declaration encouraged its members to deepen the economic engagements amongst the BRICS countries and all relevant BRICS stakeholders, by positively contributing to ensure that the project is executed with speed. Additionally at a separate BRICS business breakfast hosted by South Africa, South Africa’s President, Jacob Zuma, encouraged the attendees to support the project and play their role in fast tracking its execution.
The BRICS Cable is a 34 000 km, 2 fibre pair, 12.8 Tbit/s capacity, fibre optic cable system linking Russia, China, India, South Africa, Brazil – the BRICS economies – and the United States. It will interconnect, amongst others, with the WACS cable on the West coast of Africa, and the EASSY and SEACOM cables on the East coast of the continent. This will give the BRICS countries immediate access to 21 African countries and give those African countries access to the BRICS economies. The projected ready for service date is mid to second half of 2014.
Over the last 12 months, the outcome of the market, traffic and feasibility studies carried out have demonstrated the project’s commercial viability, showing a reasonable Internal Rate of Return (IRR) for this kind of project. During this period, the BRICS Governments as well as the telecommunications operators in these economies have been canvassed to gauge their support and the result has been resoundingly positive.
All the necessary information is now in place to take the next step of seeking investors for the project and to define the most appropriate project financing model. To date the studies have shown that an appropriate investment structure for the project is a Consortium model, whereby operators come together by way of a Construction and Management Agreement (C&MA) and make contributions to the cost, which is commensurate with the capacity they get from the system.
The South African promoters – Imphandze Subtel Services (Pty) Ltd, a subsidiary of Imphandze Investments, in association with i3 Africa (Pty) Ltd – are in possession of the requisite telecommunications licences in South Africa to land, operate and maintain the undersea cable in South Africa. Following the outcome of the BRICS Summit in India, they are now in the process of formally inviting telecommunications operators and other potential investors in the BRICS countries and the USA to participate in the project.
During the past twelve months of the planning phase of the project, the promoters have worked closely with reputable experts in the field of submarine cable systems and are satisfied with the robustness of the feasibility studies. Axiom and Terabit Consulting – two global leading consulting firms in the submarine cable industry – carried out the market, traffic and commercial feasibility, while Alcatel-Lucent – the world leading provider of turnkey submarine cable systems networks – carried out the technical feasibility.
Andrew F B Mthembu, Chairman of i3 Africa and Imphandze Investments said “We are willing to work with potential operators and investors to review the configuration, routing, capacity and project financing structure to take a new step in the viability of this project. The studies are available on request to potential participants in the project.”
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