Togo: New LTE entrant Teolis wants to offer rural education opportunities and takes an optimistic view of the country’s frozen monopoly provider

20 April 2018

Top Story

After years of talking about more competition, the two licensed newcomers – GVA and Teolis - have finally launched. Both will need to compete in a market where wholesale provision is still largely the monopoly of state incumbent Togo Telecom. Russell Southwood talked to Michel Bagnah, President du Conseil Administration, Teolis about his future plans and how he sees the market.

According to Michel Bagnah, the idea for Teolis came out of three concerns:” Firstly, we wanted to put in place the best technology for the Togolese. The current actors do not offer high quality services to users. Secondly, we wanted the operation to be different. We wanted to offer 24-hour service response and to have operational efficiency. We wanted the company to be able to respond to feedback and so we have a team that works on customer services. Thirdly, we want to be able to offer freedom. Why? We want to push connectivity in rural areas and give them the opportunities as well. We have a partnership with the Virtual University in Senegal. We want to give them the opportunity to study even if there are no physical facilities. Education from all over the world is part of the free we want in place”. Any Togolese company will tell you that it’s hard to get technical issues fixed by Togo Telecom after 5pm on weekdays.

Because of its focus on the corporate sector, Bagnah takes the view that the company needs to have a pan-African approach so that it can service multinationals that have operations across the continent:”We are not too ambitious. We want to give the right service to the right people and put in place a telecoms network in Africa through linking with companies who offer similar services in other countries through partnerships. We’re selling to corporates so we need to offer global services across Africa and be a preferred partner in each country in Africa”.

The focus on corporates comes out of the need to make a faster return on investment for its shareholders:”We are focused on corporates. We need financing. In our business case, corporates are the place where the investment needed is minimum and the return is maximum. We have 10 big customers and 40 SMEs. It’s not just connectivity but we can also offer additional products for corporates including: video surveillance, interconnection with rural agencies, security, web hosting and cloud services”. He wants to break even in six months.

Launched at the end of February, Teolis is currently focused on two types of offers: one direct to corporates and the other for mass markets:”We also have Teolis Zone where we will sell Wi-Fi hot-spots to retailers. They will then sell it to users at CFA53 (US10 cents) for 20 MB. We also want to be able to offer a residential service and will build our network to do this”.

At present its LTE network only covers the capital Lome but Bagnah adds:”We will need a separate network for the mass market which the Government has asked us to put in place. We’re raising money for this mass-market network and hope to have it in place before the end of 2018”.

But both of the new challengers are more or less stuck with Togo Telecom as their only wholesale provider. Like most coddled state incumbents in this position, it has a long-held reputation of the wrong kind: its wholesale prices are high and its network quality is low.

“In terms of wholesale bandwidth, we are obliged to buy from Togo Telecom. We want to be able to buy independently and particularly to work with partners in Ghana and Benin. Wholesale prices are currently too expensive for us”. It also uses (more expensive) VSAT connections.

So how does Bagnah feel about being the position of Togo Telecom?:” It’s semi-open and we can work on things improving. We can argue for things going further. It’s not a binary position. If we can prove a need is not being met, a real need, we can discuss this with the Government. If we have money, we can get about providing for it. The future will be value-added services and that is what we will be in a position to offer”.

The Government announced in July 2017 that it would separate Togo Telecom into three entities, separating out its wholesale function. But at a local level there is considerable scepticism that the same old, same old management will be able to produce a different result even if you put everything in different containers. As a clear defensive move, the monopoly provider signed an exclusive deal with the state power utility CET to lease its fibre.

GVA (Group Vivendi Africa) has plans to roll out Fibre-To-The-Home (FTTH) and is working with Canal+ to offer a box that delivers the pay TV operator’s channels.

Furthermore, earlier this month the Government also launched a network of public Wi-Fi hotspots in the capital Lome (the Carrefour Deckon, the port area, the University of Lome, Independence Square, and at a number of hotels, bars and restaurants), with the ultimate aim of blanketing the nation with high-quality internet connectivity. By 2030, Togo expects that all those with no internet at home would have access to a hotspot nearby, ‘that is within a 5km range at least’.

By comparison with other francophone African countries, the level of revenues from data has only grown slowly. This largely down to three main reasons: until recently the absence of 4G (Government-owned Togocel and Moov are launching this month); high prices and poor quality of service for end-users.

Will Teolis be offering a neutral data centre?:”Not yet. We’re thinking about it. We want to start with a neutral data centre with partnerships with Microsoft and Amazon. In the end we want to have both local and global infrastructure. Legislation under ECOWAS requires that corporates have their data replicated outside of the country”.

The company is 100% Togolese owned with the funds raised in Togo and from Togolese in the diaspora. It plans to raise and invest CFA3 billion over the next 5 years and has spent CFA211 million on its licence. The holding company is Next Step Fada based in Paris. According to an interview Bagnah gave to Jeune Afrique on 15 March:”(It) brings together different investors from the diaspora…I have no political actors among my financial partners. I think one must choose between politics and business.” His father was a former director of the Togolese Office of Phosphates and was awarded the Grand Officer Mono by President Faure Gnassingbe on the 56th anniversary of the country’s independence in 2016.

The latter is unlikely to let Togo Telecom out of his hands as he faces continued opposition within the country. During protests last December, the Internet was switched off for several days and if providers have their own networks, this kind of switch-off becomes harder.

However, leaving aside these sharp-end considerations, Togo Telecom remains fir the Government an attractive source of patronage in a number of ways that mean that this Gordian knot is unlikely to be cut any time soon. But like Michel Bagnah we must remain optimistic that the Government will see sense and open the market for wider investment.


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