JOHANNESBURG (Reuters) - Alcatel-Lucent has won a $240 million contract to build a telecoms cable around East Africa that could slash the cost of phone calls and Internet access on the continent.

A consortium of 23 operators from 17 countries overseeing the project said on Friday that after multiple delays, African countries had finally signed up a supplier to lay the cable, which is expected to be completed by the end of next year.

Project co-ordinator John Sihra said the deal was worth about $240 million and that the consortium tried to include as many countries as possible.

"Today is the milestone from which we can catapult the project into implementation," he said.

The 9,900 km (6,500 mile) cable, which was repeatedly delayed due to a dispute over the cost of access, is expected to slash the price of phone calls and Internet access in East Africa, spurring investment and making communications more accessible to the poor.

The cable will link eight countries from Sudan to South Africa and will also connect landlocked countries.

South African fixed-line phone firm Telkom said in the statement the project would open new opportunities for it in Africa. The company is trying to expand into new markets to offset flagging voice revenues at home.

In a competing project, Indian firm Reliance Communications said in January it planned to build a submarine cable around the east of Africa.

Flag Telecom, a unit of Reliance, has said it would build a cable linking South Africa to Kenya via Mozambique, Tanzania, Madagascar and Mauritius as part of a plan to revamp its global network by the end of 2009.

The company said in December it was investing $1.5 billion to build the world's biggest Internet Protocol network over submarine cable systems covering 60 countries.