BOFINET Negotiates To Reduce Transit Backhaul Fees

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PORTIA NKANI

Botswana Fibre Networks (BoFiNet) is currently negotiating for the reduction of transit backhaul fees through South Africa and Namibia for the two-undersea fibre optic cables, The Botswana Gazette can reveal.
In recent years the Botswana government acquired stakes in the Eastern Africa Submarine Cable System (EASSy) where it owns 4.5 percent and 4 percent on West African Cable System (WACS) submarine cables, which are managed by BoFiNet.
Being in a landlocked country required BoFiNet to lease backhaul capacity to access the submarine cables. As a result, unit costs thus remain high due to transit backhaul fees through South Africa and Namibia. As a mitigation, plans are underway for BoFiNet to partner with other operators in the respective neighbouring countries.
In an interview, BOFINET Chief Executive Officer Mabua Mabua, expressed with concern that transit costs have been making them uncompetitive, therefore they are fighting to reduce the transit costs per megabyte to below 1 US dollar from 30 US dollars.
“Unit cost transiting through Namibia and South Africa ranges between 30-50 dollars per megabytes per second. We are negotiating to reduce to 1 dollar per unit or less. We have been paying P5million annually to SA only. We are currently looking for a partner through concessions in the long term. We have negotiated lending stations and concessions in Swakopmund-Namibia and Capetown-South Africa,” he disclosed.
In Namibia the project is already halfway, BoFiNet has signed with Paratus Telecom company to own capacity in Namibia.  It is understood that the project which started in August 2017 is expected to be complete this year April. Mabua further said they are expecting tenders in South Africa to close this week.
He further revealed that in Namibia “it will cost us around P50million-P60million once off and very minimal operational costs which will be less than a dollar per meg. By doing so, we will not be exposed to annual lease tariffs because we will have them in a long term.”
In terms of the proposed cost sharing ratio Botswana will sustain 35 percent and 65 percent for other partners.
Looking four years back Botswana’s bandwidth demand has multiplied by 10 and is forecast to exceed ten times in the next five years.
According to Mabua “at the moment in terms of paying for the transit with the current bandwidth uptake we were paying around P25million as transit fees annually in South Africa only.”
BoFiNet vaunt international capacity that runs on the EASSY, WACS and EIG undersea cables to PoPs in South Africa, Djibouti, London and currently exploring other strategic locations regionally and international.
Mabua said they have another company which will connect Botswana to Zambia via Katima Mulilo, therefore Botswana will be able to play in the regional space and sell to other countries.  Only 25 percent will be allowed to be sold outside Botswana on short term leases.
Meanwhile, the EASSy cable is said to be down and Botswana is only servicing from WACS. This publication has established that there has not been any impact, however the worry may only be when WACS also breakdown.
According to Mabua, the EASSy onward connectivity EID broke down between Egypt and Europe in mid-December 2017 and likely to be up by mid-February this year. The is the second breakdown following the one in June 2014, where the cables undersea were reported to have been affected by the moving boats.
With regards to expansion connectivity, EASSy cable was last upgraded two years ago and is due for an upgrade by end of next year, whereas WACS was upgraded sometime in 2017 and is due in 2020.
Mabua added that the amount of bandwidth provided used to be 2.3 gigabytes now it is over 22 gigabytes, and they continuously upgrade. On WACS for instance, there can be 12 operators from 8 different countries and each has their own needs and from the operators, some exhaust their limit hence the need to upgrade the equipment.

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