• Liquid Telecom recruits from BoFiNet, BTCL
• Brings competitive data prices
• Brings in top Telecoms Engineers from UK, Nigeria
• Local operators may lose market share
Paul Taylor, who was controversially purged from his position as Managing Director (MD) of Botswana Telecommunications Limited (BTCL) at the end of his contract, may re-emerge in the telecommunications sector, this time as Chief Executive officer (CEO) at Liquid Telecom, the new entrant in the industry.
Liquid Telecom was established through a partnership between Botswana Power Corporation (BPC) and Liquid Telecom Operations based in UK.
BPC entered into a joint venture to form a Special Purpose Vehicle (SPV) with Liquid Telecom, a Mauritius based Telecommunications Company with headquarters in London, United Kingdom (UK), that operates in Democratic Republic of Congo, Uganda, Rwanda, Kenya, Zambia, Zimbabwe, Tanzania, South Africa and the UK.
BPC owns and operates a vast optic fibre network. This fibre optic network has surplus capacity which can be utilized commercially in the Botswana ‘s telecommunications market. The BPC board approved the initiative to pursue its commercialisation in March this year, a move which will see Liquid Telecom utilising BPC optic fibre cables. Industry sources have told The Business Weekly & Review that Liquid Telecom is in negotiations with Taylor, who was shown the door after successfully navigating BTCL through its Initial Public Offering (IPO). The British born Taylor, denied that he was heading to Liquid Telecom, but interestingly, Taylor still stays in Botswana and says he is eligible to work, should he choose to.
“My work and residence permit are in order so I am eligible to work in Botswana,” he said when asked, if he still resides in Botswana or whether he has plans to return to Europe.
Apparently, Liquid Telecom bosses believe in Taylor’s international experience in telecommunications and believe that such experience could fit well in their strategy of bringing in world class telecommunications standards in Botswana. Already, sources say that Liquid Telecom has recruited some people at Botswana Fibre Network (BoFiNet) as well as some senior officials from BTCL, where Taylor was employed. Further, sources reveal that Liquid Telecom plans to shake up the market by introducing highly competitive products that have never hit the domestic market.
On its website, Liquid Telecom says it is the leading independent data, voice and IP provider in eastern, central and southern Africa. The website indicates that it supplies fibre optic, satellite and international carrier services to Africa’s largest mobile network operators, ISPs and businesses of all sizes. It also provides payment solutions to financial institutions and retailers, as well as award winning data storage and communication solutions to businesses across Africa and beyond.
Sources say that through the network of BPC optic fibre cables, Liquid Telecom plans to bring competitive high-speed data packages which would give local operators, Mascom, BTCL and Bofinet a run for their money. The company will seek to bring affordable, high-speed online television packages as some of its key products. In places like the UK, online television is growing in popularity and affordablity, which is what Liquid Telecom wants to bring here. Sources say experienced telecommunications engineers from the UK and Nigeria have also be recruited by Liquid Telecom to come and use their skills and experience here.
Bofinet and BTCL, both majority controlled by government, have failed to meet the requirements by utility provider, BPC to partner with the latter in establishing a wholesale telecommunications company.
BPC struck a deal with Liquid Telecom, a company owned by Strive Masiyiwa, to establish a company to operate under the same name. Masiyiwa’s company will, under the new deal with BPC, competing directly with BoFiNet, a state owned company; BTCL, a Botswana Stock Exchange (BSE) listed company owned 51 percent by government as well as Mascom Wireless and Orange Botswana. The equity stake that each partner will own in the SPV Company will be based on the value of the initial contributions that they make to the SPV, which is yet to be announced.
However BPC will not contribute any capital to the SPV, rather the value of BPC’s equity stake will be determined primarily by the value of the optic fibre, equipment accommodation and maintenance that BPC will be providing.
The use of this infrastructure will be granted to the SPV under an Indefeasible Right of Use Agreement (IRUA). Rather than taking any rental payments, the capital value of the IRUA will be used to purchase BPC’s equity stake. The valuation of the infrastructure amounted to an equity share of 42.5 percent for BPC, while Liquid Telecom owns 57.5 percent.
The operations are expected to commence once all legal requirements have been met. The 57.5 percent equity share of Liquid Telecom will be used for setting up the company and fund operations.