Liquid Telecom’s agreement to acquire Neotel was one of the most eye-catching telecoms deals of 2016.
In June, Liquid Telecom and investment company Royal Bafokeng Holdings agreed to buy the South African operator from its shareholders, such as India’s Tata Communications, for approximately $429 million. The deal is set to almost double its network footprint across the continent. It will mean that, for the first time, businesses across Africa will have a single access point to over 40,000km of cross-border, metro and access fibre networks.
“After receiving final regulatory approvals, we will start the process of integrating Neotel into the group. We will be able to leverage their extensive assets together with Liquid Telecom’s pan-African network, to provide the best service possible to our customers wherever they are in Eastern, Central and Southern Africa,” says Willem Marais, CEO of Liquid Telecom South Africa, who also serves as a group managing executive at Liquid Telecom. “Moreover, I think Neotel’s new strategic position will be disruptive and beneficial to the telecoms market in South Africa.”
As well as overseeing the company’s operations in South Africa, Marais is responsible for managing Liquid Telecom’s global wholesale sales. Prior to joining Liquid Telecom 18 months ago, he served as chief commercial officer at SEACOM. He previously held several senior positions at Siemens Group and has more than 20 years’ experience in the telecoms industry.
At the time of his appointment, Liquid Telecom Group CEO Nic Rudnick said: “Willem has a great track record of developing long-term customer partnerships and leading negotiations with large scale wholesale telecoms infrastructure transactions in Europe, Middle East, and Africa, which makes him perfect for this important position within our company.”
A new era in South Africa
Prior to the Neotel agreement, Liquid Telecom’s South African presence had been relatively small compared to its operations in Zimbabwe or Kenya. However, over the last 12 months, it has pushed ahead with deploying new infrastructure across the country, as it looks to grow its carrier and enterprise customer base.
“In South Africa, we have concentrated on building out national fibre routes north of the Gauteng province,” says Marais. “Deploying long-distance fibre routes across Africa presents its own unique challenge, and we are continuously exploring new ways to collaborate with our business partners to help address this.”
In November 2015, Liquid Telecom completed a new fibre route connecting Polokwane and Centurion. The route provides MTN Group and other anchor tenants with almost unlimited capacity, enabling cost-effective access to two of South Africa’s major hubs. As an anchor tenant, MTN Group has the advantage of owning dark fibre on the route, which forms part of its wider South African transmission network.
Furthermore, Liquid Telecom is currently in the process of deploying another long-distance fibre route with MTN as anchor tenant.
Active across the continent
Liquid Telecom recently secured a loan of $300 million to support further expansion across Africa. The additional funding will not only support the acquisition of Neotel, but help drive the company’s growth in new markets such as Botswana and Tanzania.
In October, a joint venture with Botswana Power Corporation (BPC) was announced, which will see BPC lease optical fibres from its network to Liquid Telecom Botswana, creating a new telecoms network provider with extensive reach across the country.
Liquid Telecom Botswana will enable BPC to make more effective use of its existing fibre assets, while allowing Liquid Telecom to exploit the network to serve needs of its wholesale and enterprise customers in the region.
In December, Liquid Telecom received final regulatory approval to close its latest transaction in Tanzania, becoming the majority stakeholder of Raha, Tanzania’s leading ISP. Raha today serves over 1,500 businesses as well as a growing number of retail customers with a range of connectivity solutions, including fibre, satellite, 4G and WiMAX. The acquisition provides Liquid Telecom’s enterprise and wholesale customers with direct and faster access to Tanzania and to all Eastern, Central and Southern Africa.
Elsewhere, the company has pushed ahead with its rollout of fibre-to-the-home (FTTH), launching broadband services in Kenya, Rwanda, Zambia and Zimbabwe. These services provide up to 100Mbps internet access to households and small and medium enterprises - the fastest broadband speeds in Africa.
Plans are afoot to build the 10,000km Liquid Sea subsea cable linking Africa to Europe, offering additional capacity of 20-30Tbps to international carriers, in and out of Africa’s East coast. This is up to 10 times the capacity of existing submarine cables in the region, and will further help remove bottlenecks between Africa and Europe. By owning its own sea cable, Liquid Telecom will be able to provide higher and guaranteed service level agreements (SLAs) to its customers.
The best in Africa five years in a row
Capacity Europe was a fitting stage for Liquid Telecom to crown its year of outstanding growth and infrastructure investment. The company collected the Best African Carrier award at the 2016 Global Carrier Awards in Paris, beating off competition from some of the largest wholesale carriers in Africa.
Marais said: “Winning five years in a row is an exceptional achievement to celebrate. I would again like to congratulate everyone at Liquid Telecom, who all have worked hard to make this happen.”
Liquid Telecom has built Africa’s largest independent fibre network which runs from Uganda to South Africa, covering Africa’s fastest-growing economies, often going where no fixed network existed before. The question is, where next for Liquid Telecom?
“In the long-term, we hope to have a significant presence across most African countries,” says Marais. “But as well as connecting more of the continent, we are committed to improving the quality of service and range of solutions offered to enterprise and carrier customers across the region.”
