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International Fibre Bandwidth Hubbing, a Lucrative Business

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 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.

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. 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.

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.

By Paul Budde, Managing Director of Paul Budde Communication – Paul is also a contributor of the Paul Budde Communication blog located here. Visit Page

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