Wednesday, June 3, 2020

BoFinet takes full control of national fibre

BY BONNIE MODIAKGOTLA

Botswana Fibre Network (BoFiNet) has scored a major victory after government decided to bundle together its extensive fibre network and hand it over to the state-owned enterprise. This comes three years later after BoFiNet lost out to a private company ÔÇô Liquid Telecom in a bid for Botswana Power Corporation’s fibre network.

Dorcas Makgato – minister of Transport and Communication, on Wednesday in parliament said government is implementing the National Broadband Strategy which was approved in July 2018, and one of the strategy’s recommendations was to consolidate all government owned ICT infrastructure.

“In essence, broadcasting networks; Water Utilities Corporation (WUC) fibre networks and the Botswana Power Corporation (BPC) fibre networks into a single asset bundle and to have these managed by the Botswana Fibre Networks (BoFiNet),” Makgato said.

The minister revealed that the fibre networks and broadcasting facilities will be made available to all market players on an equitable, non-discriminatory and open access basis. The separation and transfer of these facilities is scheduled to be completed by end of 2019/2020 financial year, which is due to start in April.

Makgato’s announcement comes almost a year later after government put a stop to a joint venture between the state-owned power utility BPC and Liquid Telecom, one of Africa’s leading independent data, voice and IP provider. In 2016, BPC and Liquid Telecom announced that they have entered into a joint venture for the establishment of a wholesale telecommunications service provider.

At the core of the deal was an agreement that Liquid Telecom will tap into BPC’s expansive infrastructure, creating a new telecoms network provider with extensive reach across Botswana. Liquid Telecom was selected as the preferred joint venture partner following a competitive bidding process, in which five local (including BoFiNet) and international telecommunications companies submitted bids.

The joint venture was to operate under the name Liquid Telecom Botswana, with BPC taking 42.5 percent stake in the newly created venture. The two partners at the time said the structure of the deal will enable BPC to make more effective use of its existing assets, while allowing Liquid Telecom to better serve the network needs of its wholesale and enterprise customers in and outside the region.

However, the initial deal was derailed last year after the Ministry of Transport and Communications proposed a change to the business model, barring the new venture from using the national optic fibre including that of BPC. This decision was approved by cabinet in May 2018, two months before the completion of the National Broadband Strategy.

“The decision was to help speed up and actualize universal access to optic fibre in the country and BPC infrastructure lent itself to the achievement of this strategy. As a result of this, Liquid Telecom Botswana will have to apply directly to Botswana Fibre Networks (BoFiNet), if they are to use any optic fibre,” said Eric Molale, minister of Mineral Resources, Green Technology and Energy Security, in parliament last year when asked give an update on the progress of this joint venture.

At the time it was also revealed that Liquid Telecom Botswana was facing a hurdle in obtaining a telecommunication licence from Botswana Communications Regulatory Authority. Molale said the licence application process has been put on hold as other government ministries are in the process of reviewing Liquid Telecom Botswana’s business model.

By time of going to print it was not clear if BOCRA had finally approved Liquid Telecom Botswana’s license, a year after it was made. BOCRA did not respond to emailed questions from Sunday Standard. What is also not clear is whether Liquid Telecom will pursue its original business model now that it has to deal with BoFinet – it’s supposed main competitor.

Liquid Telecom began life as the satellite and voice operator Econet Satellite Services, which was founded in 1997. Rebranding to Liquid Telecom in 2004, the company went on to launch the high-speed, cross-border fibre network linking southern Africa to the rest of the world in 2009. The company supplies fibre optic, satellite and international carrier services to Africa’s largest mobile network operators, internet service providers (ISPs) and businesses of all sizes. It also provides payment solutions to financial institutions and retailers, as well as data storage and communication solutions to businesses across Africa and beyond.

While Liquid Telecom, the leading independent data, voice and IP provider in eastern, central and southern Africa, is largely unknown in Botswana, the owner of the company is well known. The company an affiliate of Econet Group, a conglomerate founded by Strive Masiyiwa, an enterprising Zimbabwean billionaire who first came to international prominence when he fought a five-year constitutional legal battle leading to the removal of the state monopoly in Zimbabwe’s telecommunications sector.

The landmark ruling is regarded as one of the milestones in the opening up of African telecommunications to private capital. But in Botswana, Masiyiwa is well known as the man who established Mascom, the leading network service provider. It was recently reported that Masiyiwa is set to become a major shareholder in Mascom, up the 7 percent stake to 60 percent after MTN decided to dispose its entire 53 percent shares in Mascom.

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