African countries hope to launch a submarine cable to slash the cost of phone calls and Internet access by early 2008 and will defy private sector investors looking for big profits by regulating tariffs.

Communication ministers from 15 countries in southern and eastern Africa said on Tuesday they had agreed to speed up long-delayed plans for the Eastern Africa Submarine Cable System (EASSy), which will link the east of the continent to the rest of the world.

The project – which could cut Internet costs from $ 15 000 per megabyte to as little as $ 500 over five years – has stalled due to bickering between South Africa and Kenya over funding, and arguments about how much access to the cable would cost.

High telecom costs are impeding investment in the world’s poorest continent, particularly in countries like Kenya, which are keen to nurture call centre outsourcing industries.

The planned 9,900 km (6,152 mile) fibre optic cable will run from Durban in South Africa to Port Sudan in Sudan with six landing points on the way.

Frustrated by delays to the project, Kenya had threatened to break away from the NEPAD plan and build its own cable. But Were told Reuters that plan had been put on hold to give time for the new agreement to work.

The cable would cost around $ 280 million, but that would rise to $ 300 million including an extension to the Indian Ocean island of Mauritius.

The World Bank had agreed to provide around $170 million in debt if certain conditions were met and that private sector funding mainly from Africa would meet the shortfall.

The cable was expected to be operational in the first quarter of 2008, and terrestrial links to landlocked countries would be finished by the end of 2008.