Chris Wood, WIOCC: Lion's share of Africa's market
13 November 2012 |
Chris Wood has overseen the remarkable rise of one of the largest subsea cable consortium groups in telecoms today. The WIOCC CEO shares his African adventure with Kavit Majithia.
Chris Wood, CEO at African cable consortium WIOCC, conducted this interview from the heady heights of Mount Kenya.
Here, while overlooking the breathtaking views, he reminisces about travelling Africa in his twenties. It was the eighties; he was young and carefree with only a few Kenyan shillings in his pocket.
“I once spent two nights and a day on the roof top of a train that travelled across the Sahara desert because my brother and I had run out of money,” he says.
“Today, we go on safari in a luxury car and stay in nice places. In those days, we stayed in a two man tent and listened to elephants thudding and thumping throughout the night.”
And it was those experiences in his early years, which also include trekking through the heart of the African jungle and coming face to face with a lioness, that helped give him the confidence to answer a call from John Sihra, chairman of WIOCC, and take on the role of building a subsea cable consortium from scratch.
Armed with little over $100 million investment supplied by 11 hard-nosed CEOs, controlling some of the largest telecoms companies in Africa, it wasn’t a role for the faint hearted.
Wood joined WIOCC as employee number one in October 2008, and his tasks ranged from employing electricians to fix plug sockets, to hiring lawyers to register the company across the continent.
He holds extensive telecoms experience with roles at WorldCom (now owned by Verizon Business) and Flag (now owned by Reliance). Prior to this, he gained his accountancy qualifications at Reuters, working on the financial side of the business.
After four years as CEO of WIOCC and counting, he claims to “have the right mix of experience required to put together a successful telco”.
Survival of the fittest
On his most recent Kenyan safari, Wood was lucky enough to witness the Great Wildebeest Migration – where over two million of the creatures move between the Serengeti National Park in Tanzania and the Maasai Mara National Reserve.
It was during this he was able to marvel at a cheetah in full flight bringing down an unfortunate wildebeest.
At times his experiences in the WIOCC boardroom must feel as overpowering as Mother Nature. The company now has 14 investors, after adding TelOne in Zimbabwe, Seychelles Cable System Company and LPTIC in Libya in 2010.
“I meet with the 14 CEOs every quarter, and these are people that would never normally meet. They are very powerful meetings,” he says. “Fortunately, we have been able to turn a profit after only two years, when we originally forecasted six, so they are generally happy with the initiative and remain extremely supportive.”
Given the number of companies, there is room for conflict, particularly when two companies from the same domestic operating market come together.
“We have two competing players in Burundi, for example, and that sometimes has the potential for conflict. On the international side, we sometimes find that, whether it’s a WIOCC invested system, different operators and indeed individual shareholders might be chasing the customer. Generally as a rule, we can talk through this and identify the best solution for everyone.”
The operators are, however, united by a collective commitment to WIOCC, according to Wood. “Everyone understands the benefits of being part of something larger,” he says.
As investors in EASSy, WACS and the EIG cable, the consortium’s footprint now extends to over 400 African locations and 700 cities in 70 countries globally, with a terrestrial backhaul network comprising of more than 50,000km of optical fibre.
From the offset, Wood has demonstrated to investors that WIOCC operates as a wholesale business, proving that selling capacity to ISPs and telecommunications operators was not detrimental to their core business.
“WIOCC effectively acts as the international infrastructure provider for the whole group, and each of the shareholders can build out their own network. It mixes fibre with wireless and seamlessly connects to the bigger international cables seamlessly,” he says.
The launch of the EASSy cable in 2010 attracted strong interest from many of the region’s operators, which were all eager to claim a share in one of Africa’s first subsea cables.
However, smaller operators rapidly found they were incapable of raising the means and rapidly became disenfranchised. This is when they turned to Wood’s WIOCC. “It made sense for these companies to plug together, raise external finances to complement their own investments, and have more power on the system.”
In fact, this philosophy helps explain the actual origins of the idea behind WIOCC. Now coined as ‘Africa’s carrier’s carrier’, originally the company’s strap-line was ‘Africa connected the EASSy way’.
Priced out of access
WIOCC’s investment into other cables, including EIG, which spans from Mumbai to London, and the WACS cable on the African west coast, was a further reason why Wood had to disperse his attentions from EASSy exclusively.
The WACS launch earlier this year “changed market dynamics” in the west coast, according to Wood, and gave consumers a diverse solution from SAT-3, which was historically extremely expensive. “Selling in South Africa means we can offer a fully redundant solution east and west, allowing for a good diversity proposition for customers.”
This paradigm, however, is not applicable to the entire region, where market watchers often lament on the fact that access prices are too high for relevant operators and consumers to benefit from the increase in connectivity.
WIOCC, as a consortium, certainly enabled smaller players to be part of the bigger African picture, but there are still those being priced out of a highly expensive market.
Wood agrees, but also believes the deployment of terrestrial infrastructure has not been rapid enough. “Ultimately, we have seen terrestrial networks lag behind submarine connectivity, and up until the submarine cables arrived there was actually no point in building national and local access fibre, so no-one bothered.”
He identifies that there was nowhere to take the traffic to, meaning prices naturally remained high. “The bulk of the cost was encountered from the circuits taking the traffic from Johannesburg to London for example, and getting the traffic to the coast meant an 800km trip in some cases.”
While Wood believes the problem is now slowly being addressed, with fibre deployment occurring in many countries in Africa and competition on the networks increasing, the region could still be plagued by the inadequacy of local loops.
“Bottlenecks were on the coast, and now it is being taken inland to the major cities, meaning it is now in the local loop,” he says. “The challenge will be having enough fibre deployed to homes and businesses to allow the prices to come down for the end user.”
He defiantly rejects any idea that it is the role of regulators in the African region to set access prices, stating that “regulated pricing does not work in open access economies”, but does believe they still play an important role in aiding the technological development of the continent.
“There is an urgent need for the creation of an environment that enables private investment, enabling network build-outs. The availability of high-quality bandwidth, competition and high-quality networks will see these economies take off significantly.”
Unlocking the landlocked
Somalia only turned on its first street lights just last month, after a lighting system was donated to the country by the Norwegian government. The country’s communications infrastructure is similarly underdeveloped, and Wood has expressed a commitment to addressing this problem.
“Somalia is far off being connected by submarine fibre, but I see great opportunity for this country, and even the smallest amount of development will make a difference to the lives of the people there,” he says.
There is a similar problem in the eastern side of the Democratic Republic of Congo (DRC), where parts of the country lie too far from the coastline to benefit from increasing connectivity on the west side.
WIOCC has also committed to a strategy to enable connectivity in the eastern part of the DRC, which will come from the eastern part of the continent where its shareholders have built fibre networks through Tanzania, Kenya and Uganda.
While the connectivity needs of landlocked Africa still need to be addressed, Wood believes the future for Africa also lies with the development of local content.
“There is a requirement that local content is kept in Africa. With investment and development of data centres, we can ensure that this traffic is not constantly long hauled out to Europe and Asia.”
Ultimately, Wood has an invested interest in Africa – both in terms of his career and his “passion for the continent” in general.
“I have been part of this development, and the growth potential of this region over the next five years in particular is phenomenal,” he says.
WIOCC was formed in 2007 and operates exclusively as a wholesale carrier’s carrier.
CEO: Chris Wood has led the WIOCC executive team since 2008 and is responsible for all aspects of the company’s global operations.
Customers: WIOCC’s customers include African and international fixed-line and mobile operators, ISPs, infrastructure providers, academic and medical institutions and governments.
Network: WIOCC owns 30% of the EASSy cable and also has investments in the EIG, SAT3, SEA-ME-WE 3 and WACS cables. The company’s shareholders’ terrestrial fibre networks and partner networks interconnect 30 southern and eastern African countries over more than 50,000km of optical fibre, serving more than 400 African locations.
The company is also expanding its reach to more than 12 countries along the west and northern coasts of Africa and its network extends internationally to 700 cities in 70 countries with hubs in London, Port Sudan, Djibouti, Mombasa and Mtunzini.
Products and services: WIOCC offers global connectivity services purchased on a lease or IRU basis, as well as internet transit to London, Marseille or Djibouti and end-to-end managed services.
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