TelOne to get US $98 Million, for home & backbone fibre by year end

The government is working to ensure that a US $98.6 million loan from the China EximBank meant for the expansion of TelOne’s fibre network is mobilised by the end of 2015. Delivering the 2016 national budget statement yesterday, Minister of Finance, Patrick Chinamasa said that the funds will capacitate TelOne in its “expansion and modernisation drive during 2016”.

Talk of this funding and expansion/modernisation project is not new. The contract was awarded to Huawei back in 2010, but getting the project started has faced major delays. It’s not clear therefore what hurdles have been cleared to ensure that the project goes underway this time.

Chinamasa listed the following 5 components of the fibre expansion and modernisation project that the money will fund:

• Bulawayo – Beitbridge, US$11.4 million;
• Bulawayo – Victoria Falls, US$5.7 million;
• Mashonaland North upgrade, US$4.8 million;
• Last Mile Connectivity, US$37.2 million;
• Infrastructure upgrade , US$37.9 million.

The minister said however that TelOne will contribute its own resources to the tune of US $12 million, money that will mostly be used for the last mile fibre connectivity to homes and public buildings as well as the purchase of network equipment and other service provision capital expenditure.

TelOne is fast catching up to private players in fibre rollout both into homes and backbone. This is ofcourse a great thing for consumers in general but for the market structure specifically as more players providing terrestrial fibre connectivity only means that IP transit prices will be driven down by the competition.

ISPs in Zimbabwe will have more choice buying wholesale internet services from a number of players. It also means these ISPs are able to choose who to rent infrastructure from for fibre to the home. Currently there’s limited choice as there hasn’t been significant coverage of fibre in residential areas.

Liquid Telecom, Powertel, Telecontract and TelOne themselves, have have laid fibre around in Harare and parts of Bulawayo but there are still many residential suburbs that have no coverage at all; medium to high density suburbs in Harare and Bulawayo, and whole cities without home fibre outside these two.