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

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.”

2. 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.

3. 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

Article source: http://www.balancingact-africa.com