Professor Victor LawrenceChairman

Baharicom Development Company Baharicom Properietory and Confidential

Solution for Africa’s Global Communications

Global Telecom Infrastructure 2009 Africa: Missing from the Global Telecom Infrastructure

The African Market is currently served by expensive, inconvenient, low quality telecommunication infrastructure consisting primarily of the SAT-3/WASC/SAFE fiber network and satellite service.

“Imagine a major research university with tens of thousands of students trying to access the Internet though a single US household.”

“The challenges the continent [of Africa] faces – meeting human needs, participating in the global economy, managing the environment, and improving governance – require engineers, doctors, scientists, and businessmen, all products of Africa’s universities. For years, strategies to address these challenges centered on providing direct assistance for combating disease and poverty and for providing food and water. But living conditions in Africa cannot be improved without sustained long-term economic growth. That goal in turn requires connecting Africa to the rest of the world.”

Calestous JumaProfessor of the Practice of International Development, Harvard Kennedy School Cambridge, MA.

Elisabeth MoyerAssistant professor in the Department of Geophysical Sciences,University of Chicago, Chicago, IL and former lecturer at the African Institute for Mathematical Sciences.

Africa in 2012

Sustainable Social and Economic Development

• Requires– Education—Broadband to 600,000 schools and

universities– Healthcare—ICT healthcare systems to remote regions

and cities– Agriculture—state of the art methods and information

– Infrastructure—Government and community ICT access

–Civil society—modern knowledge transfer systems• Uhurunet’s Broadband Capacity Grants will meet these

needs!

The Need

Africa is the last frontier of the global fiber optic network infrastructure. Uhurunet has been launched in order to meet the need for Internet, data, and voice services in Africa that local service providers have been unable to provide adequately or economically through existing cable networks and satellite facilities.

Underpinning Uhurunet’s business rationale is the concomitant recognition that Information Communication Technologies (ICT) are essential to Africa’s economic development and that Africa, although one of the fastest growing telecommunications markets in the world, lags far behind the rest of the world, because of the scarcity of broadband capacity which is generally supplied by submarine fiber optic systems. The statistics are alarming:

• Africa's bandwidth per capita is only 1% of the world average• Only 4% of Africans have access to the Internet• Africa has the highest connectivity costs in the world• African universities pay some 50 times more for bandwidth then do similar

institutions in the United States• Connectivity costs per GDP is almost 200 times higher than in the United

States

Uhurunet’s business is therefore also its social mission—to deliver capacity to Africa’s businesses, schools, communities, civil society and governments.

[ 7 ]

ICT Penetration in Africa is Still the Lowest in the World

Source: ITU, 2008; Broker research

Sub-Saharan Africa is an under-served market across telecom services

Despite the high rate of growth of mobile telephony in Africa, penetration rates still lag both developing and developed markets

Internet usage remains at extremely low levels given the high cost and limited availability of services

Future broadband penetration growth is expected to be mainly driven by mobile broadband As African countries continue to transition from 2G to

3G technology, the use of mobile broadband will continue to rise

Falling connectivity prices from new submarine cable capacity in East and West Africa will promote a rapid increase in telecom services

Estimated capex of key African operators Bharti, MTN, Vodacom and Millicom to be invested in African networks from 2010 to 2012 amounts to $12 billion

ICT Penetration Rates: Africa vs. Rest of World

59.0

19.0

23.0

6.0 6.0

49.0

13.015.0

3.0 2.0

32.0

1.04.0

0.1 0.9

0

10

20

30

40

50

60

Mobile Cellular

Subscriptions

Fixed Telephone

Lines

Internet Users

Fixed Broadband Subscribers

Mobile Broadband Subscriptions

Per 1

00 in

habi

tant

World Developing Countries Africa

Victor

[ 8 ]

19.0

7.8

6.25.8

5.2

3.6

3.03.0

2.22.1

1.61.6

1.31.21.0

0.90.70.5

0.40.40.2

15.58.6

8.0

7.36.76.5

5.4

4.2

3.43.13.0

2.3

1.7

0.9

0.50.4

0 5 10 15 20 25

Sierra LeoneEthiopia

Central African Rep.Congo (Dem. Rep.)

LiberiaNiger

BurundiBurkina Faso

GuineaMali

ChadTanzania

MadagascarMozambique

BeninGuinea-Bissau

MalawiEquatorial Guinea

EritreaRwanda

CameroonAngola

Côte d'IvoireLesothoGhana

TogoNamibiaZambia

BotswanaGambiaGabonNigeriaUgandaSenegal

South AfricaS. Tomé & Principe

Cape Verde

Per 100 InhabitantsACE Landing Points

Internet Usage in Africa

Source: International Telecommunication Union (ITU) World Telecommunication/ICT Indicators databaseNotes: 1. The ITU’s ICT Price Basket shows how much countries are paying for telecommunication services, relative to income levels. It is composed of three sub-baskets: fixed telephone, mobile cellular and fixed broadband Internet tariffs. The ICT Price

Basket is computed as the sum of these three tariffs, as a percentage of monthly Gross National Income per capita2. Internet users per 100 inhabitants in Africa, 2008

Online Penetration in Africa2 In 2008, Africa had 32.1million internet users

Nearly 8 times as many as in 2000 Only 0.6 million fixed broadband internet subscribers

Penetration still lies far below world averages One per thousand in Africa vs. two hundred per

thousand in Europe

According to ITU, African consumers pay the highest broadband costs in the world ICT costs amount to 41% of average monthly income

while internet penetration is only 4%1

Lower broadband cost seen as key political and economic factor by governments and international agencies Numerous initiatives in the region to boost

broadband penetration

Africa Average World Average

Victor

[ 9 ]

Internet and Broadband Growth in Western Africa

African governments recognise broadband as key enabler of socio-economic development and GDP growth and therefore have begun to prioritise accessibility and affordability of broadband services

As African markets have historically been sensitive to price reductions, competition should bring about a growth in internet and broadband Increased access to end-users and all operators Increased penetration rates in the region

In 2009, Tanzania experienced rapid growth in broadband penetration as customers and operators benefitted from connectivity to the new undersea cables

According to industry research, the number of broadband subscribers in Africa is expected to grow by 18% CAGR over the next 5 years

Source: International Telecommunication Union (ITU), African Alliance, Pyramid Research, Pioneer Research, Morgan Stanley Research (The Mobile Internet Report, 15-Dec-2009)

12

6

11

19

0

2

4

6

8

10

12

14

16

18

20

2009E 2010E 2011E 2012E 2013ECAGR 2009E-

2013E: 108.8%

Mob

ile B

road

band

Su

bscr

iber

s (m

m)

Africa Mobile Broadband Subscriber Growth

Victor

The ongoing liberalization of Africa’s telecommunications regulatory regimes as well as accelerating economic development in Africa have led to explosive growth in the telecommunications sector.

Consistent with global trends, approximately 95% of international traffic is forecasted to be driven by Internet data access.

With historically low internet penetration rates in Africa in comparison to levels elsewhere, demand for data access in these regions is expected to continue to grow at a rapid pace.

Broadband internet access and heavier, content-rich traffic are expected to fuel strong demand for international connectivity via submarine fiber optic systems over the next 15 years.

Broadband Capacity for Africa

Today, lack of international connectivity, diversity, and the corresponding use of scarce and expensive satellite resources are limiting Africa telecommunications development.

To achieve the forecasted growth, Africa needs a new international highway with a complete connectivity

Africa – tomorrow capacity

Uhurunet will support the growth of the traffic between Africa and the rest of the world, thus reducing the digital divide and driving the economic and social development of Africa

Uhurunet Objectives

Provide international connectivity to Countries (including land-locked Countries) who don’t have access to any submarine cable

Improve connectivity, provide diversity and traffic securization to Countries

• Reduce the cost of international traffic• Speed up the development of broadband services• Favor economic development and education

Uhurunet, a high connectivity

• A 17,000 km long Submarine Cable designed to provide 5.12 Tbps

• 22 Countries to be connected, including 9 Countries not served today by a cable system

The best connectivity ever offered by a submarine cable along the West Coast of Africa

2

3

4

5

7

8

1112

1314

15

16

17

19

21

22

20

6

18

910

1

• Maroc Telecom• Mauritius Telecom • OCPT (DRC)• Orange Cameroun• Orange Guinée• Orange Mali• Orange Niger• Republic of Gabon• Sierra Leone Cable Ltd.• Sonatel• Sotelgui

• Baharicom• Benin Telecoms • Camtel• Côte d’Ivoire Telecom• CST (Sao Tomé)• Expresso Telecom • France Telecom• Gamtel• Getesa• International Mauritania Telecom• Libtelco

Uhurunet members

Uhurunet—An Innovative System

• Consortium members can aggregate their investment to finance the same landing point

• Increased competition for international traffic in all Countries, for the benefit of the end user

• Operators in Landlocked Countries are members of the Consortium.

• Uhurunet is a state of the art and upgradeable system, ready for 40G implementation.

Philanthropic Strategy

Philanthropic services to promote social and economic development throughout Africa.

The Phelps Stokes Fund will raise at least $60 million from philanthropic donors and other sources to fund the purchase of broadband capacity from Baharicom that will make up the corpus of the Uhurunet Capacity Endowment (the Endowment).

The Endowment will be formed as a pool of capacity units on the Uhurunet system through purchase or a presale of capacity on an right of use (ROU) basis made in advance of the system’s construction.

Page 16

The Uhurunet Capacity Endowment is a philanthropic initiative of Baharicom and Phelps Stokes to distribute broadband capacity grants to schools, universities, healthcare initiatives, NGO’s, and public service programs across Africa.

Baharicom Laboratories

Technology Solutions for

Baharicom Properietory and Confidential

Facilitating the Dissemination of ICT Knowledge Capital in the Service of African Development

Why Baharicom Labs• Research and study unique attributes of the African Information

and Telecom market to– communicate, interact and/or partner with global players through

focused conference, trade shows , and literatures.– identify niche opportunities and provide solutions internally, through

partnerships or outsourcing (to academia and/or industry).• Provide leapfrog solutions to help Africa’s Development

competitively and to attract – global institutions such as Google, Yahoo, Facebook, YouTube, IBM, etc.– African service providers to facilitate new or unique services

• Transfer technology across product or service life cycle• Development of human capital for the African technical

industry

Baharicom Properietory and Confidential

Vision Statement

• Vision – Develop a state of the art research center to provide the most appropriate information and communication technologies and processes to enrich African people’s quality of life.

Baharicom Properietory and Confidential

Baharicom Labs MissionAn Independent Industrial Research Laboratory

To assemble and create technological capabilities for African communities to thrive their standard of living

To develop and deploy an array of ICT utilities, applications and practices optimized for and broadly supportive of African development

Coordinate & facilitate projects, stakeholders and technology development to accelerate the effective transmission of appropriate methods

To act as a hub and center of excellence at the core of ICT-centric activities

Sample Programs• Information and Communication Technologies(ICT)

– Traffic monitoring and data mining of Uhurunet and Umojanet– Security services; e.g., encryption, authentication– Develop appropriate User Interface solutions– Mobile social computing for the next billon users

• Rapid deployment of ad hoc technologies to provide ICT infrastructure for health or emergency applications

• Distance learning and research capabilities (a 21st century digital arts and sciences academy for Africa)

• Integrate Africa into international eCommerce Network• Engage with international philanthropic organizations to design,

prototype and/or deploy life-enhancing solutions

Baharicom Properietory and Confidential

OperationsBaharicom Labs will achieve its goals through the following

activities:• Intellectual Property: Developing and managing a portfolio

of intellectual properties• Industry/Academia Bridging (Ventures): Actively search the

industry and academia for niche technologies that are aligned with the goals of BDC and help advance ideas, prototypes and IPs into products through direct funding and/or partnerships.

• Market Research: Continual market and technical research culminating in literature provided to affiliates.

Baharicom Properietory and Confidential

Baharicom Labs

• Baharicom Labs will develop: – A state-of-the art research center– New ICT services for ISP’s and telecom carriers– ICT health and education applications– A network operating center– A 21st century digital arts and sciences academy– Provide training in ICT skills

Page 25

Technology

for

Baharicom Properietory and Confidential

Undersea Fiber Optic Network Components

BranchingUnit

Repeater

Cable

Terminal

Traffic

LineTerminatingEquipment

Power FeedEquipment

Undersea Network ManagementEquipment

HighPerformanceOpticalEquipment

Undersea Fiber-Optic Cable

OPTICALFIBER

UNITFIBER STRUCTURE

STRENGTHWIRES

COPPERSHEATH

INSULATIONJACKET

ARMORED PROTECTIONLAYER

2. Brief Overview of Undersea Cables and Fiber-Optic Technologies