Orange and MTN team up on $47m Guinea-Bissau project

By:
Jason McGee-Abe
Published on:

West African country where only 3.8% of the population use the internet signs deal with World Bank and operators to link with subsea cable to Europe and rest of Africa

The government of Guinea-Bissau has signed a memorandum of understanding (MoU) with the World Bank, Orange and MTN for a $47 million project to link the country to the African Coast to Europe (ACE) subsea cable.

Orange and MTN Group will form a consortium with Guinea-Bissau. “The World Bank unlocks $31.596 million in the form of a loan to connect Bissau to the international fibre-optic cable,” said the finance and transport ministries in a statement, which added that Orange and MTN will provide around $8 million each over a five-year period, which makes the total amount for the project $47 million. 

The new fibre spur will be owned and operated by a consortium, Bissau Cabo. The government created a special purpose vehicle (SPV) and has divested its shares in the SPV to the private sector. Orange Bissau and MTN Bissau hold a combined 51% stake, while the government will have the remaining 49%. 

The World Bank recognises that the country “lacks the enabling environment for private sector-led growth due to poor infrastructure, low levels of human capital, and poor public services”. The Bank adds that Guinea-Bissau’s transport, logistics, electricity, water and telecommunications infrastructure is “in a woeful state”.

Sector liberalisation has stimulated the telecommunications sector in Guinea-Bissau during the past two decades and the country, which ranks 117th of 187 countries on the UN Human Development Index and 172nd of 189 countries in the World Bank’s Doing Business rankings, will become the fifth country in West Africa linked to Europe.

The plan dates back some time, but n 2011, the political situation in the country led to a de facto government preventing it from going ahead. World Bank documents said: “There is no ‘open access’ (shared) entry point for international connectivity in Guinea-Bissau, and each operator is thus constrained to deploy its own satellite, microwave or fibre-optic networks to bring international connectivity in Guinea-Bissau. Deploying such networks is costly and their reliability is limited.”

Public investment in the ACE infrastructure will complement other public investment in the ICT sector. The ACE subsea cable infrastructure and the future domestic backbone will be interconnected with the upcoming Organisation for the Development of the Gambia River (OMVG) power lines, which include fibre crossing Guinea-Bissau. This interconnection will ensure full redundancy of the ACE infrastructure, securing international connectivity at all times.

The project contributes to the World Bank’s twin goals of ending extreme poverty and promoting shared prosperity.

Access to the ACE submarine cable and the future West African Power Pool regional infrastructure will reduce the cost for the countries neighbouring Guinea-Bissau and will result in positive effects on prices and capacity, increased availability of end-to-end high-capacity bandwidth at competitive rates and hence broadband provisioning within the region. This is the view from the Africa Infrastructure Country Diagnostic report which highlights the importance of regional integration, including international infrastructure. 

“Providing Guinea-Bissau with diversity of access to international connectivity via access to the ACE submarine cable is vital to achieving an acceptable level of service reliability (currently inadequate due to cuts on existing terrestrial cable connections) and competitive pricing.”

The news comes after African operator InterCEL+ announced that it was to build a wireless network to connect the ACE subsea cable across the neighbouring republic of Guinea. The project is set to provide a significant boost to local economies across Guinea, offering businesses affordable access to fibre-like broadband speeds. Guinea-Bissau will be the last coastal country in the region to link to a subsea cable.

At the signing ceremony to establish the consortium in July, Fidélis Forbs, minister of transport and telecommunications, said the project will help the development of Guinea-Bissau.

The Guinea-Bissau project is due to be completed in 18 months and officials said it would improve internet speeds and reduce communication costs in a country where only 3.8% of individuals are internet users.