Liquid Telecom to launch Southern African fibre network at “good prices the like of which have not been seen”

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Fed up with getting over-priced offers to transit its traffic to South Africa, Econet Wireless set up Liquid Telecom which is building its own link to the international landing station. This is just one more sign that the arrival of competitive international landing stations is driving a frantic roll-out of cross-border and national fibre backbones across the continent. Russell Southwood talked to Liquid Telecom’s CEO Nic Rudnick about what the company is planning.

Liquid Telecom is a company majority owned by Econet Wireless whose flagship operation in Zimbabwe has come back to life with the changes to the country’s economy bought about by the Zanu-PF/MDC Government. It has services into 16 African countries, a major POP in the UK with international switches at Telehouse and three earth station in Broadlands Park.

It has taken a considerable chunk of the new international fibre bandwidth at the GB level, from Seacom and EASSy (arrangements still being finalised), whilst also having a smaller but none the less significant amount of satellite bandwidth.

There are two pieces in its jigsaw puzzle: a national fibre network of 7,500 kms in Zimbabwe and cross-border connections to 9 countries. The national network in Zimbabwe will connect all the country’s major cities. It is also building metro nets in Harare and Bulawayo and is in discussions about providing metro nets in two other Southern African countries.

The Zimbabwe network will connect on to the following countries in phase one: Botswana, South Africa, Zimbabwe, Mozambique, Zambia and Namibia. Arrangements are being finalised for connections to Angola, DRC and Malawi.

According to Nic Rudnick:”We are building ring mesh and star topologies and will emerge as the largest regional fibre network.” Funding for the project has been raised through a combination of internally generated cash and debt financing from a number of banks. The network is being built by Huawei.

The most audacious part of the plan is to build its own fibre link from Beit Bridge to Johannesburg. For as Rudnick observed:”The pricing from the incumbent operators (for this transit route) effectively damaged the business model. By building our own network, we’ll also be able to provide to third parties at more realistic prices. Initially we had not intended to build but we have done so because of the pricing and quality currently on offer”.

He points to the pricing contradiction that will force operators to build and will lower both transit and national prices:”When we looked at this, the cost of fibre from Beit Bridge to Johannesburg was more expensive than from Johannesburg to London. With the prices we’ll offer, it will make sense to use our infrastructure rather than build your own. We will have Econet as a strong ‘anchor client’ but we anticipate a balance between Econet and third party traffic. Indeed, the majority of traffic could be third party traffic.”

But what about TelOne and Powertel in Zimbabwe who already have fibre networks?:”This is an opportunity to work with them. Our network will have a significantly wider penetration than theirs. Anyone else will find it difficult to compete.” And what of the big mobile operators like MTN who want to invest in network infrastructure?:”There’s been a lot of enthusiasm about what we’re doing (from these kinds of operators) and a lot of operators are now less keen on investing in big capital projects, particularly as ARPUs decline.”

“We want to be a well priced network, not charging monopoly rents with first world service levels on the network with self-healing rings and engineers on the ground to attend to faults. We’ll provide an end-to-end managed service at more than competitive prices. We’ll provide good prices the like of which have not been seen.”