Last week, we discussed how Starlink would impact Econet’s mobile network business. Today, we will examine the impact of Starlink on Econet’s sister company, Liquid Intelligent Technologies (Liquid), which is in the internet infrastructure business. Firstly, to understand the impact Starlink may have, we need to understand how Liquid makes money.
I loved the breakdown (as always!). Thanks for bringing data into the conversation.
IMO, margin compression looks like the biggest medium to long-term risk for Liquid. It will impact how they handle current debt obligations and approach any future leverage efforts. It's also a significant concern for all Zimbabwean entities that face substantial hurdles in securing capital. You've already articulated in previous articles how the telecoms model is partly built on infrastructure-related capex.
Liquid and EWZ have been good at this and, as such, are the most exposed. They've built part of their competitive advantage around this. But, it won't matter now when it's stacked up against LEO tech which leapfrogs all of this.
RE the enterprise segment - Liquid will have to do a lot of work to endear themselves to their clients. Wouldn't be surprised if SLAs are coming under review. Like you said - CFOs are all about cost-cutting and the noise that Starlink has made feeds into that. Everyone else who provides enterprise services who was outpaced by guys like Liquid could, to some degree, consider the playing field as slightly evened, for now.
I loved the breakdown (as always!). Thanks for bringing data into the conversation.
IMO, margin compression looks like the biggest medium to long-term risk for Liquid. It will impact how they handle current debt obligations and approach any future leverage efforts. It's also a significant concern for all Zimbabwean entities that face substantial hurdles in securing capital. You've already articulated in previous articles how the telecoms model is partly built on infrastructure-related capex.
Liquid and EWZ have been good at this and, as such, are the most exposed. They've built part of their competitive advantage around this. But, it won't matter now when it's stacked up against LEO tech which leapfrogs all of this.
RE the enterprise segment - Liquid will have to do a lot of work to endear themselves to their clients. Wouldn't be surprised if SLAs are coming under review. Like you said - CFOs are all about cost-cutting and the noise that Starlink has made feeds into that. Everyone else who provides enterprise services who was outpaced by guys like Liquid could, to some degree, consider the playing field as slightly evened, for now.