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Mauritius Liquid Telecommunication enters Zambia

By Michael Malakata, ITWeb’s Zambian correspondent.
Johannesburg, 18 Jul 2011

The Zambia Competition and Consumer Protection Commission (CCPC) has unconditionally authorised the formation of a joint venture between Copperbelt Energy Corporation and Liquid Telecommunication of Mauritius, that will provide services on a high-capacity, fibre-optic network.

The joint venture, called CEC Liquid Telecommunication, is set to fuel stiff competition in Zambia's already highly-competitive telecom market. CEC is a privately-owned company that provides electricity to the mines in bulk. It also owns and operates fibre-optic network in major towns in the country.

Two other companies - the Zambia Electricity Supply Corporation (Zesco), a government-run power utility company and Zambia Telecommunication Company (Zamtel), a telecom service provider - are already providing telecom services on fibre-optic networks connected to the East Africa Submarine Cable System under the Indian Ocean through Namibia.

Each partner has an equal stake in the $30 million joint venture, which will be incorporated in Zambia.

The application for a joint venture was made in April this year but awaited CCPC's final approval.

While CEC already commands a 40% market share in the fibre optic, CCPC spokesman Brian Lingela says: “the commission believes that the company would not abuse its dominance by engaging in any anti-competitive conduct”.

Liquid Telecommunication is a data, voice and IP provider, supplying wholesale fibre optic, satellite and international carrier services to telecom operators in developing countries.

The company provides high capacity fibre optic technology and plans a 4 000-kilometre ring fibre network in Central Africa. It owns and operates one of the largest regional fibre-optic in Southern Africa, connecting and providing services in Botswana, SA, Kenya, Lesotho, UK and Zimbabwe. The fibre optic network is estimated to exceed 8 500 kilometres by the end of 2011.

Liquid Telecommunication is also continuing to expand its regional network, incorporating a number of metro networks in major cities in the region. In Zambia, the company will provide wholesale capacity and terrestrial Internet bandwidth. The company already claims it will not participate in the retail market.

Investigations by the CCPC board found that the proposed joint venture would not raise competition concerns in terms of increasing barriers to the entry in the market by other companies.

Instead, Lingela says the CCPC board expressed hope that the transaction would result into some efficiencies particularly because Liquid Telecom has a regional reputation in the provision of fibre optic network from which CEC would benefit.

CEC's strategy is to grow and diversify its business by pursuing viable opportunities in the energy and telecommunication sector.

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