BuddeBlog

The small West African country of Benin has been working quietly over the past few years to become a regional hub for international fibre bandwidth. The national telco, Benin Telecoms (BT) has been building terrestrial fibre routes to landlocked neighbouring countries such as Burkina Faso and Niger, allowing them to connect to its landing station for the SAT-3/WASC international submarine fibre optic cable, the only one serving the region. But also other coastal countries in the region are using Benin as a hub – Togo because it doesn’t have its own SAT-3/WASC landing station, and Nigeria because its national telco Nitel is in disarray and not managing its own landing station properly.

The Togo link was extended to Ghana earlier this year, giving Benin a backup route to another SAT-3/WASC landing station, which is important since ships’ anchors have in the past damaged various branches of the cable, causing major outages.

In addition, a second international cable (Glo-1, initiated by Nigeria’s Globacom) reached Ghana and Nigeria from Europe in September, bringing competition to the international fibre bandwidth market in the region for the first time, which should lead to significantly lower prices. Benin may get its own Glo-1 landing station in the future, and the France Telecom-sponsored ACE cable is scheduled to reach it in 2011.

Map of Benin

(Source: CIA Factbook)

However, lower broadband prices will only trickle down to consumers in the region if and when BT and the other national telcos pass the cost savings on. For the time being it looks like most of them are trying to maintain the comfortable low-volume/high price business model of the past, keeping consumer broadband prices high. But this will change as competition intensifies and regulatory pressure on the incumbents to open their markets.

Meanwhile, other companies are already pushing into this lucrative business: Nigerian alternative telco, Phase3 Telecom has teamed up with electricity utilities in Benin and Togo to roll out and operate fibre along power lines, with expansion plans for Ghana, Burkina Faso, Niger and Cote d’Ivoire (Ivory Coast) from 2010.

Benin Telecoms will eventually need fresh capital from a foreign investor to compete in this market. The privatisation of the company, which also operates one of the country’s five mobile networks, has been planned since 2007 but has so far not come to fruition.

For more information, see:

• Benin – Telecoms, Mobile, Broadband & Forecasts;
• Nigeria – Telecoms, Mobile, Broadband & Forecasts;
• Ghana – Telecoms, Mobile, Broadband and Forecasts;
• Burkina Faso – Telecoms, Mobile, Broadband and Forecasts;
• Cote d Ivoire (Ivory Coast) – Telecoms Market Overview & Statistics

This entry was posted on Tuesday, December 1st, 2009 at 12:05 pm and is filed under From Paul's Desk. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.