Botswana Power Corporation (BPC) and Liquid Telecom have agreed to enter into a joint venture through which BPC will lease its excess optical fibres from its network to Liquid Telecom, creating a new telecoms network provider with extensive reach across Botswana.
The agreement was signed by Jacob Raleru, CEO at BPC, and Nic Rudnick, CEO at Liquid Telecom, at a ceremony held in Gaborone.
The joint venture, which will operate under the name Liquid Telecom Botswana, will enable BPC to make more effective use of its existing assets, while allowing Liquid Telecom to better serve the network needs of its wholesale and enterprise customers in the region.
BPC owns and operates an optical fibre cable network that is embedded on some of its high voltage transmission lines. This fibre network will be commercialised for the first time in order to provide networks services across the country.
BPC Board of Directors approved the commercialisation of its network in March 2016, and following a period of competitive bidding, Liquid Telecom was selected as the preferred partner.
The use of BPC’s infrastructure will be granted to Liquid Telecom Botswana 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, which is 42.5%. Liquid Telecom will be the majority stakeholder in Liquid Telecom Botswana.
BPC, a parastatal utility which was formed in 1970, is responsible for the generation, transmission and distribution of electricity within Botswana to areas approved by the Government. BPC owns and operates an optical fibre cable network that is embedded on some of its high voltage transmission lines. This optical fibre network is currently being used for the safe and reliable operation of the power system network and for corporate wide telecommunications services. This optical cable network has some unused capacity that could be used for commercial purposes. This spare capacity then prompted the Corporation to explore ways in which it can commercialize its fibre optic network. This would enable BPC to make more effective use of its existing assets, and to provide a new infrastructure-based network operator to stimulate competition in the Botswana telecommunications market.