Fiber Wholesaling: Botswana’s Model for Success

Providing cheap, affordable, and widely available high speed internet is of interest to both a country’s government and private sector. Yet, internet prices across much of Africa are still high, and capacity through fiber is often too expensive for end users to purchase. However, adapting a wholesale model is one method to offset high costs. A wholesaler acts as an intermediate selling fiber capacity to resellers who provide internet to end-users. Wholesalers sell large amounts of capacity at low rates, which operators can purchase instead of constructing new long-haul fiber backbones – the lower costs carry over to end-users.

Botswana, a landlocked country in southern Africa recently implemented new telecommunication policy to encourage wholesale.  Each year thousands of international tourists flock to northern Botswana to experience the country’s pristine wilderness.  Botswana is known for its wildlife – the country is home to over 100,000 elephants, the largest population on the African continent.  The tourism industry has grown, and along with it, the demand for cheap, fast internet at hotels and lodges.  This presented a challenge: Botswana accesses high speed submarine cables via neighboring South Africa and Namibia, and these borders are far away from tourism hubs such as the Okavango Delta and Chobe National Parks. In 2007, state-owned Botswana Telecommunications Company (BTC) completed the Trans Kalahari National Backbone, expanding fiber connectivity into rural areas. However, costs still remained high and many hospitality facilities could not afford last mile connectivity.

To address this problem, in late 2012, Botswana’s government pushed for a wholesale model and split the state-owned Botswana Telecommunication Corporation (BTC) into two separate entities: BOFINET and BTC. BOFINET took ownership over long-haul fiber assets, and BTC would act as a telecom operator. This split was the first step toward the privatization of BTC. BOFINET began to sell wholesale capacity to BTC and private operators like Mascom (MTN) and Orange. As a result, operators could focus on providing end-user/last mile connectivity while using capacity purchased from BOFINET for long-haul connectivity. BOFINET resources could prioritize fiber expansion, upgrades, and the development of a cost-effective, long-term wholesale model.  The results are visible; BOFINET’s establishment has decreased internet tariffs by almost 40% in Botswana.

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Figure 1: Botswana’s fiber network, data extracted from InfraNav™ HIP Consult’s interactive fiber database. A preview of InfraNav analytic capabilities is also included; statistic includes completed and under construction fiber.

HIP Consult’s InfraNav™ and its analytical capabilities can be used to assess the effectiveness of the BOFINET network. Our calculations indicate that today, the long-haul portion of the BOFINET network involves approximately 4,300 km of fiber, with approximately 1,000 additional kilometers under construction along the following routes: Sekoma-Tsabong, Sehithwa-Mohembo, and Maun-Ngoma-Kasane. These new links will increase rural internet penetration to approximately 15,000 additional people living within 5 kilometers of BOFINET fiber, resulting in an overall 500,000 people across the entire network. More importantly, the new links will create a fiber loop in northern Botswana, ensuring that resort towns like Kasane, Kazalunga, and Maun will have access even if a fiber is cut.

In the next phase of InfraNav’s development, HIP Consult’s mapping team plans to incorporate other key infrastructure data. In Botswana, hospitality facilities are an important part of the country’s economic infrastructure and require access to fiber to provide high-quality internet to support a thriving tourism industry.  Both hotels and internet providers need to know the distance between a facility and long-haul fiber to help determine the cost of constructing last-mile/end-user connectivity.

Please contact us at maps@hipconsult.com to request additional information, ask questions or express interest in our data and InfraNav™.