PTA Bank has approved $11.5 million as loan for Burundi Backbone System (BBS) to build a national fibre optic network in Burundi.
The network will connect all 17 provinces of Burundi and will facilitate connection to the international submarine cables landing at Dar-es-Salaam and Mombasa through border point connections with neighboring countries. The project will be implemented in three phases.
Speaking after the approval, David Easum, the CEO of BBS stated that the loan would play an important role in financing a project of national importance to Burundi.
“The loan would revolutionise the telecommunications sector by bringing the benefits of high speed, high bandwidth connectivity at a more affordable cost. An immediate impact of the project will be to increase the internet and mobile penetration in Burundi making communication services available to a larger part of the population.”
Burundi Backbone System is made up by four telecom operators including state-owned Onatel, Leo Burundi (owned by Orascom), Africell, and Cbeinet, which is an internet provider.
Burundi, which is one of the emerging markets in telecommunication, has managed to attract the $11.5 million loan that will be paid in ten years.
According to the country’s Finance Minister, Tabu Manirakiza, the project, which will set up an African telecommunication network, is being financed by an PTA bank in a pure pan-African effort.
“The financing for the Burundi Backbone Systems Company (BBS) was approved by the board members of PTA Bank at a meeting in Nairobi early in April while it was signed in Burundi, mid May 2013 in Bujumbura between BBS and PTA Bank CEO.
Burundi, a landlocked country, will benefit from the connection, and will also rely on Rwandan infrastructure and Tanzania’s network, which is still under construction.
The project will help the landlocked country Burundi connect to international fibre-optic cables for the first time. Consequently, the country will end dependency on satellite connections, which are expensive and somewhat unreliable.
In less than 15 years, 5 telecom operators have tried to increase their subscriber base. These operators are Leo Burundi, with a penetration of 25 percent and 1.5 million subscribers, Econet Wireless, Africell, Onamob, and Smart Mobile. Hit telecom license was withdrawn last year by the Government.
Despite the increase of the telecom companies; prices remained high and Burundi will profit from the decrease of telecom prices with the new fibre optic network.
“It will also see Burundi’s bandwidth prices drop significantly. Currently, telecom operators in Burundi pay dearly for Mbps per month for international bandwidth”, the East African reported, adding that internet users in Burundi pay some of the highest rates for connectivity in Africa.
Recently, Burundi Finance Minster, Tabu Abdallah Manirakiza said that the land-locked country will test its network in June 2013, after the agreement in Bujumbura.
In 2008, the World Bank with a funding of about $10.5 million encouraged Burundi to start network activities with Chinese company, ZTE chosen to execute the technical installation under government scrutiny.