Cable Wars: Kibaki's letter that unleashed Kenya's silicon savanna

By Patrick Kariuki

President Kibaki was in his office at State House. It was early 2008, late in the evening. He had a multitude of problems in his in-tray, not the least of which was the post-election violence that was raging in the Rift Valley, threatening to consume his presidency and destroy the country. Suddenly, the comptroller of State House, Hyslop Ipu, came barging in with a mobile phone in his hand. Waiting to talk to him urgently on the other end of the line, 7, 500 kilometers away in the United Arab Emirates, was his minister of Information and Communications Technology, Hon Mutahi Kagwe.

All the way from Abu Dhabi, Kagwe could hear the president tell Ipu to hand over the phone in his famous baritone, “Leta hiyo kitu”.

The journey to that phone call had begun at an insurance industry dinner two years before, in early 2006, at Panari Hotel. Mutahi Kagwe, the newly appointed ICT minister, was guest of honour. After his speech a journalist cornered him and asked a direct question: what was the one thing he hoped to achieve at the ministry of ICT? It was a good question and it forced the minister to make a decision. So he told the journalist that he wanted Kenyans to communicate easily and cheaply with the world.

At the time, it cost 35shs per minute to make a phone call within the Safaricom network during peak hours and up to 50shs per minute to other networks. These high costs made Kenyans wait until off-peak hours to make cheaper calls, which always made the Safaricom network to crash in the evenings, rendering it impossible for anyone to get through. This state of affairs led CEO Michael Joseph to accuse Kenyans of peculiar calling habits, causing a memorable PR crisis for the Company. Internet connections, on the other hand, were a nightmare. The whole country relied on satellites to access the internet. Satellites, however, transmitted data at a glacial pace and were unreliable. Good luck establishing a connection if the sky was cloudy. And to add salt to injury, the costs of a satellite link were extraordinary!

For Kagwe to make it possible for Kenyans to communicate easily and cheaply with the world there was only one thing to do; abandon the satellites and join the global fiber optic network. This meant the country needed to lay fiber optic cables under the sea, an expensive and difficult undertaking. Conventional wisdom at the time presumed it could not be done alone, so Kenya joined up with other African countries as a co-founder of the South African fiber optic cable, EASSY.

Soon enough, Kenya discovered there was nothing easy about EASSY. The partner countries constantly bickered amongst themselves. And the South Africans, who had a controlling interest in the cable, projected a condescending attitude to everybody else. In their minds, the cable was a business; a cash cow that the wealthy South African pension funds were keen to build, own, control and earn profits from. Kenya, on the other hand, viewed the cable as a development tool; a public utility much like a road, which would provide the foundation for its ICT sector to take off.

Tired of endless meetings, unwilling to put her economy at the mercy of the South African pension funds, Kenya made a decision; we would stay in EASSY but we would also build our own cable. Kagwe called his fellow ICT ministers from Uganda and Tanzania and convinced them to join in the plan. Determined to achieve digital independence, Kagwe and his fellow East Africans travelled to the USA, Spain and finally the UAE in search of a way to build their own cable.

In the USA, they visited the offices of Tyco, one of the few companies in the world with the capacity to build undersea fiber optic cables. On the bus back to the hotel from Tyco’s Baltimore offices, Kagwe suddenly swung his neck around and announced to his fellow ministers that he had just had a brainwave: they would call their cable TEAMS (The East African Marine System).

Because many cables from around the world terminated at Fujairah in the UAE, which was only 5000 kilometers away from Mombasa as the crow flies, it became clear to the East Africans that the UAE was the most ideal partner to build the cable with. Fujairah offered excellent backup options (redundancy) in case one connection failed; as opposed to the EASSY cable which terminated in Djibouti where there was only one connection, meaning no backup in case of failure.

When Kagwe and his team arrived in Abu Dhabi to pursue the matter with the UAE, they found, to their dismay that the UAE government did not trust that Kenya and her partners had the capacity to do the project.

A frustrated Kagwe tried for days to get them to sign a deal. But despite visiting all top officials in the country and sharing his dream about a cable called TEAMS, all of skeptical UAE just slammed their doors in his face. It was a wild goose chase.

But he was no quitter. Plus, the prospect of crawling back to the South Africans with his tail between his legs was not appealing. So he played the last gambit of a desperate chess player and made a move for the King, i.e., the President of the UAE and the Emir of Abu Dhabi, Sheikh Khalifa. When Kenya’s ambassador to the UAE heard of this idea, he advised the fearless minister that any correspondence to the Sheikh must come from President Kibaki himself.

Kagwe didn’t waste any time. He dialed State House. The president is not a person you just call out of the blue, of course. So he called Hyslop Ipu’s mobile phone instead. Ipu, never one to hesitate on matters of state, immediately went to the president’s office.

“Your Excellency, Mutahi Kagwe is on the line from Abu Dhabi and wants to urgently talk to you”, Ipu said.

“Leta hiyo kitu”, the president demanded. Ipu handed the phone to the president.

Within minutes, the government’s top brass swung into action to prepare the needed letter, which was duly delivered to the head of state and signed. Off it went to the Emir.

In quick order, the Emir responded in the affirmative to the president. Suddenly the mood in the UAE changed. The foreign affairs minister invited Kagwe into his office and informed him that the Emir considered Kenya a strategic partner and had ordered his government to cooperate. Therefore, anything Kenya wants Kenya gets.

Their finance minster, who just days before had declined to approve TEAMS, now allowed the UAE government to acquire a 15% stake in TEAMS through Etisalat. The job of building the cable went to Alcatel-Lucent, a Franco-American company (now owned by the Chinese).

All told, TEAMS cost 79 million dollars to build, fully funded by the Kenyan government and a consortium of Kenyan companies. The funding was raised by selling stakes in Safaricom and auctioning International Gateway licenses to investors.

Previously, Telkom had controlled the International Gateway exclusively, but to no avail, as its corrupt staff collaborated with crooks to control all international calls in return for a cut.

Although Telkom didn’t make a cent and the calls were of horrible quality, it was a lucrative enterprise for the criminals. Ergo, the decision to open up the International Gateway to the private sector unleashed a murderous rage in certain quarters. Kagwe vividly recalls one individual calling him and telling him that he would be killed.

Bitange Ndemo, the indefatigable Permanent Secretary who, together with the president, was Kagwe’s closest partner throughout the entire TEAMS project, nevertheless forged ahead with the auction of the licenses. He too was threatened with death. The fact that the post election violence was in full swing at the time complicated matters further. Anything was possible in those unruly days.

To ensure that Ndemo and Kagwe were not murdered by the Telkom mafia, 50 police officers were deployed to protect the duo until the International gateway license auction was over and the money needed for TEAMS was raised.

The money was raised successfully and construction commenced on January 2008 on the Emirates side. On 12 June 2009, the TEAMS cable arrived in Mombasa and was launched by President Kibaki, Prime Minister Odinga and other dignitaries.

Impact of TEAMS

Teams delivered broadband internet to millions of Kenyans. Initially, plans were to have a capacity of 40 Giga Bytes per Second, upgradeable to 640 Gb/S. By the time it landed, however, it had a capacity of 1.2 Terabits! For Kenya, that was a leap into the future. It also brought crisp phone calls. A phone call to Los Angeles was suddenly as clear as a call to Athi River. You couldn’t tell the difference. And the cost of the call ultimately went down by a staggering 99%.