By Amin Kef Sesay
Privatizing the Cable Landing Station
The Sierra Leone Cable Limited (SALCAB) is a sixty million dollars (USD 60,000,000) investment by the Government of Sierra Leone which comprises the Submarine cable and the terrestrial network.
The Company was established as a Special Purpose Vehicle to support the Government in achieving its national development goals.
SALCAB’s main sustainability factor is that it operates in a monopoly market wherein it is the only authorized body to deploy and operate an optical fiber network.
Leasing the Cable Landing Station to a private body will create an open market and thereby introduce stiff competition in the private sector which will result in SALCAB not being able to drive as much revenue inflow as it is doing presently. Other Operators with sufficient funding will then be able to deploy their submarine cables thereby stifling the business of SALCAB.
SALCAB will eventually turn into another instance of Sierratel’s situation which is suffering from severe financial challenges due to the privatization of its main responsibilities.
Also private entities are mostly interested in maximizing their profits therefore maintaining the staff size of SALCAB will not be a priority of the private institution. This move will result in mass unemployment of the current human resource of SALCAB.
The effective protection and maintenance of the Government’s interest will not be a priority to the private entity whose main interest is to increase revenue by all means necessary.
Terrestrial Network as a Standalone Infrastructure
The terrestrial network currently generates USD 44,600 monthly. It does not generate sufficient revenue for its operations and maintenance.
It largely depends on the revenue from the submarine cable for its current sustainability.
Separating it from the submarine cable will incur significant investment from Government to set up an administrative body for the entity and also fund its operations and maintenance — especially in the early stages after the unbundling.
SALCAB Legal Operations
SALCAB is a wholly government owned Optical Fibre infrastructure company operating as a wholesale bandwidth and other related value added services provider to the ICT Industry.
SALCAB has two key portfolios – the Cable Landing Station (CLS) which is the submarine network and the terrestrial fiber network which is the National fiber network.
Submarine Cable
Upgrade investment of about 282,000 USD was incurred for increasing the ACE submarine bandwidth from 100Gbps to 240Gbps. This payment has already been done the technical upgrade is in progress. The upgrade equipment shipment is enroute. An uninformed statement was offered by the Minister of Information and Communication when he indicated that SALCAB has missed the opportunity to benefit from the upgrade.
The network originally had one Edge router, however, the Management bought two additional high end Edge routers with the function to detect and deny cyber-attack i.e. Denial of Service (DoS) and two high-end aggregation switches for enhancement of quality of service, high availability and reliability and fault tolerance.
This investment cost the Company SLL 2.2 billion.
In 2018, SALCAB gave 48% reduction in the cost for bandwidth. The Company sells wholesale bandwidth to MNOs and ISPs. However, it is the responsibility of the Operators to stimulate data usage in the end-users, not SALCAB. The MNOs are the highest consumption of data.
Terrestrial Network
When the current Management took office, over 20% of the ADM sites were active at a backhaul capacity of 1Gbps. Currently, over 80% of the ADMs are active at an upgraded backhaul capacity of 10Gbps. The terrestrial network was revived to enable the transportation of data from the submarine cable to the provinces. Most of the PoPs were offered to the Operators under a promotional package in order to stimulate usage and confidence in the network.
These promotional packages are some of the reasons why the terrestrial network is not generating as much revenue as it should. The Management decided to firstly stimulate interest in the terrestrial network with these promotional packages and then later set a price point for their usage.
In 2018, only 10% of clients uptake on the national fiber network, with investment and enhancement the institution is currently experiencing 90% uptake with high utilization.
The terrestrial fiber backbone network upgrade investment from 1Gbps to 10Gbps, MNOs, ISPs, Schools, Universities and provincial Government agencies are fully utilizing the service.
If the 40% of the ADM sites are not operational, the business will not experience such uptake.
The terrestrial network is mostly for the provinces. About 70% of the nation’s data traffic is located in Freetown. Contributions to the limitation of data penetration in the provinces are power, digital literacy, socio-economic factors (purchase of relevant equipment to utilize the service), etc.
No Firewall at the Cable Landing Station
The initial business model of SALCAB was to provide an international private leased circuit for the operators to pass their traffic without SALCAB’s interference. The model has evolved to include the provision of Internet Protocol Transit services which still does not change the neutrality of SALCAB.
Placing a firewall at the cable landing station for the inspection and filtration of every traffic defeats the purpose of fast speed broadband. The cable landing station’s primary function is to transport data with the fastest speed possible and less interference as possible.
SALCAB as an aggregator and open neutral network for MNOs, ISPs, Government, etc. transmits huge gigabits of data per day. With this huge responsibility, installing a firewall in the network will seriously drag the data transmission rate thereby defeating the purpose of fibre optic speed to the international world.
Furthermore, as an aggregator of all traffic in the country, SALCAB is not legally authorized to filter, inspect or block packets as the Company cannot predict the needs of the Operators or their subscribers and the citizens of the nation as a whole. This is the responsibility of the MNOs, ISPs and Government networks.
If for any reason the Government wishes to deploy a firewall, i.e. inspect and filter traffic, the ONS is responsible for ensuring the security of the Government’s data. ONS can be supported with Deep Packet Inspection (DPI) solutions to sniff out any suspicious data on the network and raise appropriate alarms with the relevant bodies furthermore to be used for the fight against cyber-crime.
When the e-Government Network was at a minimal capacity, there was a firewall installed in the network to secure the traffic. However, the Government’s data capacity has far exceeded the initial capacity (now at 5.9GB) therefore the firewall had to be removed as it could no longer support the traffic. Installing a firewall for the e-Government Network requires significant financial investment and given that SALCAB is not being paid for the connectivity provided, it cannot make that commitment.
Also, if it is decided that a firewall should be deployed on the network, ONS should be empowered to play that role.
Revenue and Expenditure
8.4% of the Company’s total revenue comes from the terrestrial network.
26.9% of the Company’s revenue is spent on the operation and maintenance of the terrestrial network
91.6% of the Company’s revenue inflow is from the submarine cable. The cable suffers minimal technical faults and all maintenance on the cable is coordinated effectively by the Africa Coast to Europe (ACE) consortium.
15.9% of the Company’s revenue is spent on the operation and maintenance of the submarine cable.
Debt Exposure
The Company is currently owed SLL 70.5 billion Leones from Operators and the Government. Most of this debt was accumulated during the previous administration.
41.7% (SLL 29,439,221,344 billion) of the debt was accumulated by the e-Government Network (in which MIC was designated to collect the payments for connectivity from the MDAs and pay to SALCAB). MIC has never made any payment for the connectivity provided to the e-Government Network
23.7% (SLL 16,741,272,688 billion) of the debt was accumulated by Sierratel (another Government institution that could not survive due to privatization.
17.1% (Sierra WiFi SLL 10,811,178,944.40 billion, Atlas Communication SLL 811,393,877.52 million, Intergroup SLL 481,813,199.68) of the debt was accumulated by companies that closed operations before the new administration took office
Total Monthly Recurring Costs from Sierratel and the e-Government Network is SLL 1,189,211,297 but SALCAB is not receiving this money and this severely affects the savings of the organization.
SALCAB Achievements
SALCAB is not subvented by the Government.
The Company has secured 3 redundancies on the submarine cable in order to guarantee more Operator confidence in the network; 2 to Europe (Lisbon and Penmarch) and 1 to Africa (Nigeria).
SALCAB has been efficiently supporting the e-Governance Network since 2016. The Company manages its administrative and technical costs from the revenue derived from its business activities.
The capacity of the national fibre backbone was increased from 1G to 10G capacity. This led to an increase in the use of the National Fibre Network by the MNOs, ISPs and MDAs due to increased confidence in the network.
All international technical consultancy services were terminated. The network is now fully managed by the SALCAB local team.
The Company is engaged in several impactful CSR initiatives; One Access, SmartBus, Tech Startup Challenge, Doubling Offer for Operators. The One Access project is designed to connect 500 schools to the internet against 2023 and not 1000 schools in 12 months as was presented by the Minister of Information and Communications.
To date, 80 schools have been connected via microwave and 6 schools have been connected via fiber. The fiber deployment to schools is halted because the contractors have run out of fiber drop cables and the shipment of fiber drop cables is currently stuck in Ghana due to the coronavirus pandemic. The Minister criticized the use of modems for the provision of internet services in the school buses. It must be noted that given that the school buses are mobile machinery, the provision of internet services must be from a Mobile Network Operator. SALCAB has a fixed infrastructure therefore it cannot support moving connectivity hence the collaboration with Africell.
Internet Penetration/Accessibility
The Government, through the Ministry of Finance, has secured a loan of USD 30 Million from the Exim Bank of China for the National Fiber Backbone phase 2 (NFB 2) project. NFB2 will cover 14 new towns.
NFB 1 was implemented during the reign of the previous administration. The Government secured a loan of USD15 million from the Exim Bank of China at an interest rate of 2%. NFB 1 covered 9 towns.
NFB2 will increase mobile and broadband penetration to underserved regions in Sierra Leone. It will also make data transportation cheaper and faster and make the internet network more resilient. The project implementation has halted due to the coronavirus pandemic.
Opportunities of the Terrestrial Network
With the advent of NFB 2 and sufficient support from the Government, the terrestrial network can generate significant revenue.
A total cost of 226,000 USD has also been incurred as management and commitment fees to support the NFB2 ExIm-Bank un-lending to GoSL. SALCAB has already paid the full amount.
The terrestrial network can be the main enabler for connectivity for all Government institutions. e-Government Network and One Access will be implemented solely on the terrestrial network with the support of contracted private Operators for last-mile connectivity.
With the necessary education policy, all Government schools nationwide can be required to pay a monthly minimum fee for connectivity.
All Government institutions (MDAs, hospitals, police stations, military barracks, etc) will transact directly with SALCAB for the provision of connectivity to their workplaces.
Future Plans
SALCAB Management is exploring a PPP model for the deployment of a second submarine cable. The Management has already approached partners of the 2Africa Cable and expressed interest in partnering with the consortium for the deployment of a second fiber cable. SALCAB has been tasked to meet the requirement to make the commitment fee.
The second submarine landing station will enable the deployment of a full LTE/5G network in the country as well as a Government data center.
Rolling of the E-Governance network package as a full service
Ring fence the terrestrial fibre backbone through the NFB Phase 2 project and support the roll out of rural connectivity.
Use the SALCAB infrastructure to build smarter communities at strategic locations nationwide.
Activate regional and international PoPs in major cities around the world.
Metro fiber network infrastructure in Western Area Urban (Freetown) and rural areas which is a work that is currently ongoing.
