ISOCEL to launch first FTTH service in Benin, first in capital Cotonou and then more widely

8 June 2018

Top Story

FTTH roll-outs have slowly been made in a range of African countries but the recent news that Isocel will roll-out an FTTH service in Benin is a clear sign that even in smaller markets users will not miss out. Russell Southwood spoke to Robert Aouad, Founder and CEO, Isocel Telecom about his plans.

Q: When will you launch your new LTE network?

A: We finally decided not to go with LTE. A number of ISPs that have deployed LTE have had bad experiences, like YooMee in Cameroon and several other African countries. So we thought about it and are putting our efforts into fibre where the investment and ROI will be safer. We are signing a contract with the Benin electricity utility company this week and the regulator ARCEP has given us an official decision to deploy fixed fibre. The new digital law has been signed by the President and ARCEP will need to rewrite licences to take into account the new law which will be a slow process. An exception has been given to us by ARCEP. When Canal+ tried to deploy FTTH 2 years ago they were stopped. We have taken the time to get everything in place.

We’ll start by rolling out the first 70 kilometres to the most suited areas: business and high-end residential customers located in the capital, Cotonou. Early in 2019 we will continue the roll-out once we have concluded an investment agreement with Banque Publique d’Investissement who will put up 6.5 million euros and we will put in 1 million euros.

Q: So where will the second phase roll-out go?

A: It will still be in the south of Benin but it will go to a wider range of areas. In all we will build 350-400 kms over the next two years. We did a geo-marketing study using Open Street map. We will have teams on the ground going door-to-door so that we can clearly identify potential customers. We will not go to areas where there is not enough income to support the roll-out.

Q: What will be the balance between high-end residential customers and corporates?

A: The SME/corporates element will be 60-70% and the high-end residentials 30-40%. This will change as the roll-out gets wider and after 5-10 years. Wider uptake will take some time.

Q: At what speeds and at what prices?

A: The residential customers will get at least 10 mbps for US$40-45 per month and corporates will get 20-30 mbps at US$200 per month.

Q: How many customers do you think there will be?

A: In the first instance, thousands but over 5-10 years 20-25,000. We will be the first company to sell Fibre-To-The-Home in Benin so we will have first mover advantage and we’re not starting from nothing. We will be shifting existing customers to the fibre where there is coverage and improving our wireless network for those not covered so they will get a better service.

Q: What do you think your FTTH customers will do with all their bandwidth?

A: It will be different by segment. Corporates will use it for data transfer, cloud services, VoIP and video conferencing. Residential customers will use it mostly for Netflix-type streaming and gaming. iroko TV content is being sold by Canal+ and when we have the access networks in place that can provide high throughput, there will be a market for these kinds of services.

Currently potential customers are using fixed LTE devices indoors but the behaviour of customers will change. There will be more bandwidth buying but the cost per GB will change. Our FTTH service will be unlimited so it will be much cheaper.

Q: You’re also lining up a satellite service. How are you targeting that?

A: We’re working with Yahsat who are launching a new KA band satellite and we’ll be using this for areas where is no connectivity. We’ll be putting up a solar panel and a hot-spot for villages without 3G or with only poor connectivity.

Q: You’ve also been working on getting cheaper wholesale bandwidth to Niger. How’s that coming along?

A: It’s now around US$100 per mbps at STM16 level and at around US$2-300 at STM1 level.

Q: How does that compare to what’s being paid in Benin?

A: In Benin, it’s around US$50 at STM1 level so it’s 4-5 times the cost in Niger due to the high cost of the backbones.

Q: There were plans to split up the wholesale and retail parts of the incumbent telco, Benin Telecom. Has anything happened with that?

A: Not really. The idea is still to create an asset company and put the more healthy assets into it and find a private company to run this asset. There appear to be no options for the service part of the company.

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