Convergence Partners, Google, IFC and Mitsui & Co. have agreed to invest up to $100m in CSquared, a broadband infrastructure company focused on building wholesale metro fibre optic networks and enabling internet access in Africa.
The investment will help improve broadband connectivity in a region where the lack of dependable internet access impairs economic growth, competitiveness, and the development of basic services.
CSquared will operate as an independent company headquartered in Nairobi, Kenya with cumulative capital commitments up to $100m.
CSquared has operational networks in Uganda and Ghana and plans to deploy networks in further countries.
The transaction is subject to customary closing conditions.
“This project demonstrates IFC’s commitment to increasing affordable and reliable internet access under the global Digital Infrastructure Initiative,” said Aniko Szigetvari, Global Head of Telecom, Media and Technology Investments at IFC.
“By supporting broadband business models that promote shared infrastructure, the initiative will reduce entry barriers and deployment costs in the telecommunications sector, increase affordability, and enable the development of digital economies.”
Africa lags behind most regions in broadband internet access — only 6% of Africans have access, making it difficult for the region to achieve its human and economic potential.
In a predominantly wireless environment like Africa, mobile networks depend upon high speed and reliable optical fibre to connect to cellular towers to enable them to provide high quality, wireless broadband services to customers.
Furthermore, fibre is becoming an increasingly important way for end users to directly access the Internet, especially large businesses, small and medium enterprises (SME), educational institutions, research organizations, and residential estates.
Still, fibre optic cable is expensive – just one kilometer can cost between $15,000 and $30,000—and Africa needs at least half a million more kilometers.
Deploying and operating infrastructure on a shared basis can help lower installation and consumer costs.
CSquared aims to offer high-quality, affordable wholesale services to all licensed operators.
CSquared has built more than 800 km of fiber in Kampala and Entebbe, Uganda; and more than 840 km of fiber in the Ghanaian cities of Accra, Tema, and Kumasi. More than 25 internet service providers and mobile network operators now use the company’s fiber networks to offer broadband services and 4G data to end users, with over 1,200 tower and commercial building sites connected directly to CSquared’s fiber infrastructure.
Marian Croak, Vice-President at Google, said: “We believe that together under CSquared, we can get more done to roll-out and operate affordable, high-speed, and reliable infrastructure to expand internet access in Africa. Project Link is demonstrating the impact of shared wholesale infrastructure, and we’re excited to see CSquared bring more infrastructure to more service providers and their customers.”