Nic Rudnick, Liquid Telecom: The man who broke Zimbabwe's monopoly
18 June 2012 | Kavit Majithia
Fighting stringent African monopolies as a telecoms lawyer was just the first step for Nic Rudnick, CEO at Liquid Telecom. He explains to Kavit Majithia about his passionate commitment to bringing connectivity to the masses across Africa in the face of restrictive regulatory environments.
Nic Rudnick is able to pinpoint the exact moment in his career when he became an ambassador for the technological development of the African continent.
It was in 1994 when Strive Masiyiwa, now Zimbabwe’s richest man, walked into his office at law firm Kantor & Immerman, where Rudnick served as a fresh faced law graduate. Masiyiwa explained to Rudnick that he wanted to break the telecommunications monopoly in Zimbabwe and bring access to the masses.
Following the longest running set of court cases in Zimbabwean history, Rudnick and his legal team achieved just that. Masiyiwa’s Econet Wireless was licensed and given the right to compete with state-owned Posts and Telecommunications Corporation (PTC). “It is cases like that which have served to develop competition, not only in Zimbabwe, but across the whole continent,” proclaims Rudnick.
Focus on fibre
It also marked the beginning of a fruitful partnership between the two men. In 2003, Rudnick left the legal world to become a telecoms entrepreneur by founding Liquid Telecom. Masiyiwa helped fund the project, which was originally aimed at offering cheap voice services across Africa.
Yet Rudnick quickly leveraged his links further with Masiyiwa and merged Liquid with Econet’s satellite business, a move that positioned the company firmly as an infrastructure provider.
By 2008, Rudnick’s business philosophy had really begun to take shape as the company began its first fibre roll-out in Zimbabwe. At the same time some of the first African cable consortiums were being established as the continent was on the verge of a mass subsea build out.
However, while many companies began leveraging their investments in the continent based on the advent of subsea capacity, Rudnick remained sceptical and “went in irrespective of whether the subsea cables arrived or not”. “Africa was missing something inherently important during this time and it wasn’t subsea cables,” he says.
“What Africa needed was a robust, resilient and high capacity efficient terrestrial network, which would further serve as a transmission network and connect all the African countries. We were told it was impossible, but once we began to get waivers, cross-border agreements and environment consents we knew it was the start of something that would revolutionise the continent.”
Following in the footsteps of Masiyiwa’s Econet, the company occasionally found that establishing cross-border connectivity meant disrupting the status quo: “We are not out there to be disruptive for disruptive sake, but there is an opportunity for Africa that doesn’t exist in other parts of the world; the ability to leap frog pre-existing technologies with the most advanced services because technologies prevalent in other countries have not even reached Africa yet.”
The African Silicon Valley
It may be the lawyer in him, but Rudnick has an unshakable commitment towards helping the little guy. So while he admits Africa’s regulatory environment seems to be changing for the better, Rudnick is now concerned that the previous control of the regulators is instead falling into the hands of the region’s larger operators. He fears that this could restrict the growth of small entrepreneurs at a time when Africa could be on the brink of a technology revolution and therefore needs them the most.
“I think every country in Africa, including landlocked nations, should look at Zimbabwe as an inspiration,” says Rudnick. “Misdemeanours from the past have meant there is now an active regulatory environment but it’s the larger operators that still operate a high cost access model. This is simply an indication of their reluctance to allow technological innovation in Africa.”
Although still in its infancy, he says the region is showing real drive for becoming a technology hub. He also points to how the region can learn from the growth of international tech hubs such as Silicon Valley:
“Silicon Valley is not centrally located,” he says. “In fact, it could be one of the most isolated places in the world. You would think such an iconic place in technological history would have evolved on the east or west coast.”
Rudnick is also aware of the huge disparities in development between African markets: “If you’d have said the Nigerian economy was on track to be larger than South Africa’s a few years ago you would have been laughed at. Now that is likely to happen very soon,” he
says. “It depends on which countries are ready to embrace the emerging tech economic environment to really propel up the ladder.”
Rudnick points to Zambia as an example of a nation on the brink of a tech revolution: “It is a small country in terms of population but it has big plans,” he claims. “It has an excellent regulatory environment and they are looking to make it bigger.”
Drinking from the same pipe
Liquid’s top man has a huge belief that Africa’s development beyond traditional telecommunications services will be driven by SMEs and innovators: “If the regulatory environment is created for the big guys you’ll end up with two or three large operators but a very unsuccessful technology environment.”
Large operators, however, often retain a certain amount of state influence across Africa. Are governments also accountable for restricting growth and maintaining high access costs?
“It certainly used to be the case for the majority of countries and still exists in the minority,” says Rudnick. “In fact, many of the good things that have come out of Africa have come from private enterprise. Look at all the mobile networks across the continent and how successful they are – hardly any of that is on the basis of public enterprise.”
Rudnick believes Liquid can do more to encourage innovation across Africa. He points to the company’s most recent challenge of rolling out infrastructure in the Democratic Republic of Congo (DRC). The country was previously world’s largest landlocked country served entirely by satellite connectivity.
For countries such as the DRC, the initial focus is on grass-roots telecoms service and dealing with issues of resiliency and redundancy. Yet: “Once people get used to high-speed telecoms they begin to expect it – they too are entitled to a high level of service.”
And while Rudnick’s commitment to technology evolution and providing low access costs to achieve this is key to Liquid’s strategy, he appears unfazed by the huge challenge ahead. All across the continent he sees evidence of frustrated entrepreneurs struggling to build businesses because the “big networks are squeezing the little guy out as he is perceived as a threat”.
He says educating regulators, governments and the large operators to realise that the development of the industry hinges on supporting the growth of entrepreneurs is an essential step forward.
“What drives me is ensuring that once the connectivity arrives, people have credible access to it,” says Rudnick. “We are Liquid Telecom because we provide high capacity internet pipes and we want everyone to have a drink from them.”
Ownership: Liquid Telecom Group is a subsidiary of Econet Wireless.
History: Liquid Telecom Group holds the non-wireless interests of Econet Wireless Global. The company was formerly known as Econet Satellite Services.
CEO: Nic Rudnick established Liquid Telecom in 2003 and is currently based in the UK as CEO of Liquid Telecom Group.
Offices: Liquid Telecom is headquartered in the UK with offices in Mauritius, South Africa, Zimbabwe, Lesotho, Botswana, Kenya and Zambia.
Networks: Liquid Telecom owns and operates multiple satellite ground facilities in the UK, Botswana, Nigeria, Zimbabwe, Lesotho, Somalia, Burundi, Niger and Kenya, utilising three satellite transponders. The company’s fibre network currently covers all the main cities in Zimbabwe and extends to Midrand and Isando in Johannesburg and Gaborone and Francistown in Botswana and Lusaka in the Copper Belt in Zambia. Liquid plans to extend its network into the DRC and other countries in the future.
Services: Liquid Telecom specialises in offering wholesale international carrier services through both leveraging fibre infrastructure and leveraging worldwide partnerships. Services include routing management, settlement and billing services, satellite access and bandwidth, transit services, network design, operation and traffic services and internet bandwidth.
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