MTN is expanding one of Africa’s largest fibre networks as it signed a deal with an infrastructure investment company worth more than R6bn in the next two years.
The group’s newly rebranded infrastructure unit Bayobab — formerly MTN Global Connect — has entered into a partnership with Africa50 to develop Project East2West, “a terrestrial fibreoptic cable network connecting the eastern shores of Africa to those on the continent’s west”.
In recent years, MTN has ramped up its fibre-building efforts in Africa where it already operates the continent’s largest mobile network. Friendly competition to see which company can have the largest cross-continental fibre network appears to have developed between the JSE-listed group and Strive Masiyiwa’s Liquid Intelligent Technologies.
Both companies purport to have more than 100,000km of fibre assets on the continent, with MTN having a stated goal of reaching 135,000km by 2025. While Liquid has tended to focus on the Cape Town-to-Cairo route, covering the south-to-north axis of Africa, MTN and its partners are looking at the east-to-west pivot.
MTN’s new partnership is set to invest up to $320m (R6.113bn), connecting ten countries by 2025.
“For landlocked African countries, Project East2West will improve latency by almost two-thirds and increase capacity to support high-quality broadband access. In this way, it will level the playing field and ensure that everyone has a fair chance to succeed in the digital world,” MTN group CEO Ralph Mupita said.
The partnership will offer substantial improvements in data traffic for internet service providers, mobile network operators and hyperscalers operating in these countries, says the group. It will also bridge the bottlenecks in global internet traffic landing in and going out of Africa.
It is expected to cut latency up to 65% on the east-to-west route. In telecommunications, latency refers to the time delay between sending and receiving a signal on a network. Low latency is associated with a positive user experience while high latency indicates poor user experience.
While the race is on for African dominance, MTN and Liquid are dwarfed by the trove housed in Telkom’s Openserve, which owns 170,000km of fibre assets.
Other large fibre operators on the continent include Johannesburg-based Seacom, as well as Silicon Valley giants Facebook and Google, which have put billions into wrapping Africa with undersea cables.
Investor rush
Africa50 is described as an infrastructure investment platform “investing in bankable projects, catalysing public sector capital, and mobilising private sector funding, with differentiated financial returns and impact”. It has 34 shareholders, including 31 African countries, the African Development Bank, the Central Bank of West African States (BCEAO), and Bank Al-Maghrib.
Africa50’s involvement points to growing interest from the investment community and financial institutions in telecom infrastructure projects, particularly fibre.
Seacom recently received backing from the International Finance Corporation (IFC) in the form of a $260m loan. An affiliate of the World Bank, the IFC specialises in financing private enterprise investment in developing countries through loans and direct investment. The IFC has also made equity and debt investments in Liquid, for a total of about $250m.
In SA, fibre network operator Metrofibre secured R5bn in funding in July last year from Standard Bank to increase its network expansion to 500,000 homes by 2025. Also in 2022, Western Cape-based Octotel secured R2bn in financing from RMB to boost its network rollout, particularly in SA’s outlying parts.
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