Zimbabwe is in line with its strategic intent of expanding into sub-Saharan Africa and other markets on the continent. It marks its first network expansion into African markets outside South Africa.
Business reporter Melody Chikono (MC) spoke to DFA Zimbabwe chief executive Simon Chimutsotso to unpack how the investment will impact the local information communication technology industry. Find the excerpts of the interview below:
MC: To start with, everyone would want to know what caused the delay in the off-take of the US$60 million investment in the open-access metro fibre networks project that was announced last year.
SC: Following the announcement of DFA's expansion into Zimbabwe, there was a fair amount of preparatory work to be done before launching our operations, which is to be expected with infrastructure projects especially. This included commercial and regulatory approvals and compliance issues.
MC: I understand you are going to launch the project at the end of the month. Tell us more about it.
SC: DFA leases its secure transmission and backbone fibre infrastructure and provides associated connectivity services to telecommunications operators, internet service providers, media conglomerates, tertiary education institutions, municipalities, government organisations, and other businesses, large and small, on equal terms and on an open-access basis.
I'm excited that DFA opened its office in Harare, Zimbabwe, marking its first network expansion into African markets outside of South Africa. The rollout will be carried out by a highly accomplished executive team that will plan and deploy the initial sections of the high-speed Zimbabwean network in Harare, which will be made available on a wholesale open-access commercial basis.
MC: What will be your key result areas during your stay in the country?
SC: Our key results areas are to:
• Establish an open-access network of the highest quality that is supportive of the digital advancement and development of the country;
• Deliver infrastructure and connectivity cost efficiencies to communications services providers that will contribute towards reducing the cost of communications and internet access and bring competitive prices to the Zimababwe telecommunications sector; and
• Evaluate the results of phase one and if our internal requirements are met with good acceptance from customers we will extend the project.
MC: The investment is coming at a time other companies are wrapping up operations in the country due to unfavourable economic conditions. How do you intend to survive in Zimbabwe?
SC: There will always be a need for connectivity in Zimbabwe, especially with the increased demands for data being experienced worldwide. Being in the infrastructure sector, we have a long-term view of our operations.
We believe that the availability of broadband will contribute positively to the economic well-being of the country. Our services play a pivotal role in enhancing Zimbabwe's attractiveness to other investors as infrastructure is a foundational requireme
nt.
Our wholesale open-access business model enables us to deliver economies of scale benefits to communications service providers, including cost efficiencies. We aggregate demand for services and the volume results in these economies of scale benefits. Our skills and experience in this sector also enable us to realise operational efficiencies, resulting in optimal cost structures for our business and operations.
Our investment is well received by the government and investors.
MC: You are also coming into a market where there is stiff competition. How do you intend to beat that?
SC: We believe that competition needs to take place on the services layer since service-based competition leads to improved service offerings and pricing that is to the benefit of the consumer and business end-user.
At an infrastructure level, we need to drive the efficient deployment and utilisation of these assets.
Our wholesale open-access business model, as well as the economies of scale that we achieve through aggregating market demand as well as leveraging off our skill and expertise in this space will enable us deliver efficiently to meet market demand.
We have invested in service orchestration, catalogue-driven order management and process automation in our current business, and will look at transferring these capabilities to the operations in Zimbabwe as well.
MC: How sustainable do you think your project is going to be in Zimbabwe?
SC: Owing to rapid urbanisation within Zimbabwe, there is a huge uptake of mobile voice and data services, which is placing a big demand on transmission infrastructure.
There are many businesses in Zimbabwe that require fibre connections, including mobile operators, Internet service providers, government entities, tertiary education institutions, municipalities, and other large and small enterprises, and we expect that the demand will sustain the project well into the future.
We believe that the experience, efficiencies and scale that we can bring to this project, backed up by the future demand for connectivity, supports a sustainable project going forwards.
MC: Talking of operations, what is your target topline in the first year of operation?
SC: 2019 will be a proof-of-concept phase where we will lay an initial 17km of fibre in Harare. The response from the Zimbabwe market will determine further investment. Our efforts will be concentrated on giving customers a reliable, quality network as we enhance their service experience.
MC: Where does DFA Zimbabwe view itself in the next five years?
SC: Our model is purely dependent on customer expectations. DFA Zimbabwe intends to extend the reach and density of the fibre footprint in a manner that meets potential and emerging market demand.
MC: What policy issues do you think need to be addressed to enable you to efficiently operate in the country?
SC: We are excited to see a number of pronouncements being done by the government of Zimbabwe. We are keenly following the progress in these implementations and hence it is too early for us to comment.
MC: There has been some talk that your project violates the infrastructure sharing spirit. What is your comment?
SC: On the contrary, the core philosophy of DFA is open-access, where all providers associated with connectivity, whether large or small, will have access to the same reliable fibre infrastructure solutions on equal terms.
DFA pioneered open-access connectivity in South Africa. It collaborates with other industry players in other ways, too, such as swopping ducts with other telecommunications companies, performing maintenance on behalf of others on their infrastructure in return for maintenance on DFA infrastructure in other areas to optimise resources. This is in the spirit of true sharing and collaboration.
