Broadband for Africa
Communication Solutions (Comsol) in partnership with one of its shareholders, Convergence Partners, is seeking to build a portfolio of wireless broadband data operations across multiple countries in Africa. An investment company called Convergence Wireless Networks (CWN) has been formed for this purpose.
CWN will investigate opportunities to secure spectrum/licences in high economic growth areas in Africa with a view to participating in the roll-out of networks (as a strategic, minority financial investor) in those markets. "The potential for growth in wireless broadband usage across the continent is massive given the low existing base of penetration," says Iain Stevenson, CEO of Comsol. Currently the total number of broadband connections in Africa numbers approximately less than three million, the majority of which are 3G connections, he adds.
Stevenson says that CWN will take up strategic equity interests in and supply value-added services across the entire wireless broadband market in Africa from equipment supply, to network installation, ongoing network maintenance, licensed spectrum acquisition, wholesale network operation and even ultimately to retail network operations. "CWN will work in conjunction with local country partners and existing players either in the technology arena or existing network operators," says Brandon Doyle, MD of Convergence Partners.
Wireless broadband technologies offer significant advantages for the African continent including equipment that is suitable for harsh weather conditions, standards-based technologies such as WiMAX demonstrating performance in excess of current 3G offerings, networks that are relatively inexpensive and easy to deploy and accessibility to regions that lack physical infrastructure, he adds.
Doyle says that CWN has identified countries in Africa that offer the best growth potential for wireless broadband networks on the basis of economic status, political stability, key communication statistics, size of the market, spectrum allocation, regulatory framework and licence award processes, existing operators and availability of financing.
In addition, operations will be favoured where synergies can be leveraged with other telecommunication infrastructure projects in which Convergence Partners is involved on the continent, such as the SEACom undersea fibre optic cable which will be ready for service in June of next year. "This is part of our investment philosophy of creating strategic partnerships across our portfolio," says Doyle. Other Convergence Partners investments that could be involved are companies within the Dimension Data stable.
Convergence Partners has a majority equity stake of 75% in CWN and Comsol holds the remaining 25%. "Comsol will design the appropriate networks for the local conditions and provide all the wireless infrastructure and ongoing network maintenance on all deals concluded," says Stevenson.
Convergence Partners will be responsible for identifying suitable investment opportunities in African territories offering the strongest growth potential for wireless broadband services, which could be either start-up wireless networks or existing licence holders. It will also identify potential equity partners for the investments and assist these companies with implementation of their expansion plans, including with funding and joint development of business plans.
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