Liberia creates Special Purpose Vehicle for landing station and national fibre backbone
Liberia probably has one of the smallest bandwidth markets in Africa but it has recently created a Special Purpose Vehicle consortium that has signed up as a member of the France Telecom-driven ACE cable. Russell Southwood spoke to Angelique Weeks, the Chairperson of the Board of Commissioners of the regulator, the Liberian Telecommunications Authority about how it was possible to do this.
The Special Purpose Vehicle consortium currently has four shareholders: the Government of Liberia (60%); Libtelco, formerly LTC, the Government incumbent (20%); Lonestar, the MTN subsidiary (10%); and Cellcom, the Israeli-owned mobile operator (10%). The Government and Libtelco shareholdings have been paid for by the World Bank.
Currently, this leaves the other two mobile operators (Comium and Libercell, now owned by HITS) out in the cold but according to Chairperson Angelique Weeks, the Government will sell part of its shareholding to them:”Comium and Libercell were not in a position financially to come in (when we started the SPV). But both have expressed interest and we plan to bring them in very soon, some time in 2011. We have consultants to help us sort through the various models and they don’t start until January so some after their work is complete.”
In terms of governance, any shareholder needs at least 10% to have a seat on the Board. According to Weeks:”We’re trying to decide whether to have a co-operative, a private entity or a hybrid of the two.” By co-operative she means that the SPV will have no staff but devolve operational tasks to its shareholder parties. By private entity, she means that the SPV would contract a management partner or employ its own staff.
The aim is to recycle the money put in by the World Bank into the task of building a national fibre backbone in the country. So the shareholdings sold to the new parties (Comium and Libercell) will generate money that will go into this task. The aim is to take this money with further contributions from the World Bank and to start a fibre roll-out. This is ambitious in a country that has only a modest electricity grid but offers a number of economic benefits for the country. What has not been settled is whether this task will be managed by a separate Private-Public Partnership (PPP) or simply run through the cable landing station SPV.
So what will be the extent of the network?:”Ideally it will provide a loop that covers the limits of the country and connects up its major community centres. Then we can use microwave to extend beyond the fibre backbone.”
Will it create cross-border links?:”We talked to Guinea and Sierra Leone at the ACE signing and suggested a loop to them connecting the three of us. Arguably, Cote d’Ivoire could be part of the same network. It would provide some redundancy as we might be vulnerable with a single landing station. It’s a good idea but it will come further down the road.”
But how will a country with as small an economy as Liberia absorb all this new bandwidth?:” I think there are two areas that we have to focus on to create growth. The operators need to create content that will encourage users to use more bandwidth. For example, in Ghana they were able to watch the World Cup on their mobile handsets. We need to implement e-Government, e-health and e-schools and all of these things will be facilitated by better bandwidth”.
“Potentially shareholders can sell capacity across borders. This is allowed within the scope of the ACE agreement but it places some restrictions on doing this. I think currently we could only sell to other ACE consortium members but this may change in the long run. We hope the future’s bright and we understand the economic growth and development that will be spin-offs from the cable. We can’t afford not to have the cable. Open access is the way we should go. We need to protect consumers and investors.