Africa's Liquid Telecom is known as one of the continent's biggest investors in long-distance fiber, but the operator has also been expanding into the metro and residential markets and is now even getting into the content business.
In this second part of an interview with Telco Transformation, David Eurin, Liquid Telecom 's chief strategy officer, talks about the operator's metro moves, FTTH ambitions and long-term vision. (See Liquid Telecom's Eurin Targets Africa's Enterprise Sector.)
Telco Transformation: What are your expectations about growth and pricing trends in the metro market, which increasingly seems to be a focus for Liquid Telecom?
David Eurin: For metro we've got three types of customers. Mobile operators are relying more on us to deploy metro networks to connect base stations. That is going well because the trend is to have fiber to all base stations. For us there is a big rollout to do that. The price points we can get are making the investment worthwhile in the long term. Second, there is enterprise. We need metro to be sufficiently deployed for efforts to bring fiber to buildings to be minimal, so either we pass right in front of them or it's the next block. The amount of cost we need to recover from this client is then quite small because it's shared. That business is also booming. We've invested in most of the capital and secondary cities in the countries where we already operate. We are going to continue and target new markets where we'll see the same model.
TT: Which markets are the most promising?
DE: In our footprint, we see a lot of growth in Rwanda and Uganda. There is also a lot of growth in Tanzania, where we are not present. Nairobi has growth but is extremely competitive with people deploying a lot of assets and therefore the price points are very low. It's big but almost too competitive for its own sake. South Africa is also doing quite well for the enterprise and for the third kind of customer, which is FTTH. That is probably the largest investment we've been making -- deploying tens of thousands of connections to key areas in key cities like Lusaka, Bulawayo and Harare. We are now starting in Nairobi and Kigali and we're looking at Kampala.
As we've done with our metro network, as soon as we see there is a pocket of premises or residential areas or building blocks that are able to sustain or pay for service as a community we deploy FTTH with GPON technology. That is a long-term investment because the ARPUs are low compared with the size of the investment. But for us it is also again to make use of our greater network to bring connectivity all the way to people that need it.
TT: So it makes sense to do this as you are expanding the metro network? It improves the net present value?
DE: That's right. It's something that starts quite quickly and then you need to be patient and explain the service to more and more people. We have introduced a lot of interesting price plans and we're now introducing value-added services on top of that to make the connectivity valuable. So we are moving into TV. We have launched a sister company called Ipidi TV, which is a video-on-demand and TV service. We are busy working on other value-added services that will appeal to households and small businesses.
Next page: Future visions