Liquid Telecom has fibre optic infrastructure running from Cape to Cairo. Its next target: to complete the loop up central and West African back to Cairo. We spoke to Ahmad Mokhles, its group COO, about what's next for the organisation.
Liquid Telecom was founded 14 years ago by Zimbabwean entrepreneur and businessman Strive Masiyiwa. Last July, it achieved what would have been a pipedream all those years ago, connecting Cape to Cairo with fibre optic cable. Under Group CEO Nic Rudnick, Liquid Telecom has deployed infrastructure in 13 countries and some 660 cities. Today though the business is a much different proposition than he or Masiyiwa's would have envisaged all those years ago.
The fast talking and no-nonsense Ahmad Mokhles joined the group a little over four months ago, but you would not know it as he reels statistic after statistic on the group and its development. Having worked extensively in Africa (Airtel Nigeria) and the Middle East (at Dubai-based Etisalat and Qatar-owned Ooredoo), his excitement about the size of the opportunity that connectivity offers is palpable.
The group operates a major wholesale business and is increasingly looking at the market opportunity to provide mobile network operators (MNOs) with bandwidth. With margins falling on calls and texts the growth lies in greater data usage or what Mokhles calls mobile broadband inclusion, as well as financial inclusion, including mobile banking.
The future is data
The African continent has been linked to the internet either through undersea cable (which is still largely the case in West Africa) or satellite. Fibre optic however, according to Mokhles, is the most effective in terms of connectivity speeds and reliability. Here lies the opportunity because networks that cannot offer high quality, affordable and fast data will not survive. Global estimates say that 80% of all traffic by 2020 will be video.
When it comes to their next target on the map, West Africa from Cameroon to Nigeria and Mali to Senegal, Mokhles says the firm will explore all options including co-builds, which will also mean partnering with local players in the market. Liquid Telecom do not release the outlay in terms of capital expenditure to build the network to date, but Mokhles says that raising finance is not an issue, not least because of their track record. They raised nominal proceeds of $730m in a bond last year, with a coupon of 8.5%. The company in 2017 made revenues of $680m and adjusted...