CSquared wants to roll out metronets in more countries and build and buy long-distance fibre in West Africa

24 November 2017

Top Story

CSquared is the offspring of a set of investment partners who believe in shared fibre infrastructure. It has the ambition and the funding to make a difference in several key markets. Russell Southwood spoke this week to Acting CEO, Bhavesh Mistry.

CSquared came out of a deal completed in October this year between Google, Convergence Partners, the World Bank’s investment arm, the International Finance Corporation and Japan’s Mitsui and Co. The different parties in the deal have pledged US$100 million for future investments.

From Google’s point of view, the logic of the deal was that it wanted to co-invest with others. The infrastructure operation did not really fit into existing Google operations and they wanted partners who would bring local knowledge and expertise. More widely, they were all investors who shared a common view on how infrastructure in Sub-Saharan Africa needed to develop.

In terms of assets, the joint company has over 800 kms of Metronet fibre in Kampala and Entebbe and more than 840 kms of Metronet fibre in Accra, Tema and Kumasi. Over the time of its operations, it has over 25 customers, including more recently key mobile operators like MTN. It suppliers broadband connectivity to 1,300 towers and commercial buildings. It also has a partnership with USAID and the Government of Liberia to build a Metronet in Monrovia.

The new company has three areas of focus:

  1. Building more Metronets: It wants to invest in networks in other African cities:”The most viable appears to be Mozambique and we’ve done some work in Maputo. We’re also exploring Abidjan and Nigeria.”
  1. Rolling out or acquiring backbone infrastructure: It is looking at building or operating this kind of infrastructure in West Africa. It has a presence in some markets and is looking at how it can extend this between countries.
  1. Finding partners who want to support roll-out in poorer countries:”We are looking for more Liberia-type projects and we’re speaking to development agencies about it.”

It has done an exercise mapping Metro areas in Africa looking at: potential demand; what infrastructure already exists and regulation around 4G. It sees the high opportunity markets as Nigeria and Cote d’Ivoire; medium growth as Mozambique and Benin and a third category which have growth potential but have some less attractive factors affecting them like Angola and Cameroon.

One of the common assumptions that bought the partners together was a belief in the need to build shared infrastructure:”If there is existing infrastructure, is it of sufficient quality? If the existing owners are willing to sell, then we can buy. We want to use our CAPEX to ensure that we don’t have an overbuild. We want to be a neutral, wholesale business. What we have already achieved in Ghana and Uganda gives some idea and we have now signed with key mobile operators.”

So what does the current state of the market look like to Mistry?:”It’s tough for the mobile operators. Four years ago in Uganda, the biggest player MTN told us we don’t want to work with you. It has now come on to our network. It is also using us in Ghana along with Vodafone. There’s a lot of competition in the enterprise space and we see companies going out and getting their own connections. It’s been tough on the MNOs but they are now doing deals where they don’t own the fibre.”

He also points to MTN’s difficulties in trying to offer a Wi-Fi network across the main metros:”It tried and failed.” There are now two ISPs in Uganda offering a Wi-Fi wholesale network:”As the market matures, ISPs will focus on the Wi-Fi niche.”

On pricing, Mistry says that CSquared has a big advantage:”Our pricing is always different to the market: it’s flat pricing with connection costs. We also offer dark fibre and these things mean we’re well placed in the market. Our prices are lower and our quality is higher because we’re focused on fibre with 99.999 up-time. The MNOs are seeing the performance we deliver.”

So what will CSquared look like in 2-3 years time?:”We’ll have a presence in 2-3 other countries and in addition we’ll have backbone between countries like Nigeria, Ghana and Senegal. We’ll be offering FTTH on a wholesale basis in Ghana and Nigeria in 2018, similar to what Vumatel is offering in South Africa. We will be working with MNOs to be anchor customers.”

CSquared’s web site: www.csquared.com

____________________________________________________________

Digital Content Africa is a fortnightly e-letter covering TV and film, music, social media, media, digital advertising and other digital content and services. It’s essential reading for anyone interested in Africa’s digital transition. We have already produced 100 issues and these can be viewed on this link:

Typical Top Stories will keep your finger on the pulse and have included:

Tecno’s Boomplay Music app attracts 12.5 million users across Africa for music and video, with around 8% time-based payment for content

Summview’s white label VoD and streaming platform designed for Africa is winning over mobile operators and audiences

iflix plans to turn African VoD market on its head and projects 2 million users in two years, local commissions under way

Deezer Next initiative promotes four emerging artists in South Africa with global playlisting strategy and a live event

Kwesé TV signs distribution deals with Africa’s mobile operators for Kwese Play Roku box and mobile streaming – 40% of channels exclusive

If you would like to subscribe, just send an email to info@balancingact-africa.com with Digital Content Africa in the title line.

Smart Monkey TV is our web TV channel that tracks what Africa’s Creators and Innovators are saying and doing. It now has 1891 subscribers. The latest video clip interviews that are relevant for you are below. Subscribe by clicking on this link:

Herman Singh on how MTN sees Africa's digital future...and it's one app

Standard Bank's fashion accelerator Threads - Judges tell start-ups what they're looking for

Inspire challenge entrant Ollie Smeenk, Kukua on getting weather data to African farmers

Lucy K, Mobile Reporting Project, NBC on using phones to record and upload stories to radio and TV

Jehiel Oliver, Hello Tractor on how his start-up pivoted from manufacturing to data collection

Andy Jarvis, CIAT on the 4 things making Big Data in agriculture possible in Africa

Shola Adekoya, Konga on what's changed over the last 4 years and launching Konga Daily

Okechukwu Ofili on e-publishing start-up Okada Books, its authors, readers and raising funds

Jim Teicher on CyberSmart's all-in-one edtech device trialing in Senegalese schools

Keke Lebaka on how African food giant Promasidor uses social media to talk to its consumers

Alpesh Patel on Africa's original start-up Mi-Fone, the hip-hop telecoms brand and why it failed

Abiola Olaniran, Gamsole on partnering with MTN Nigeria on his game Gidi Run