TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      E.tv: ‘We know we must vacate broadband spectrum bands’

      29 June 2022

      Eskom employees returning to work

      29 June 2022

      E.tv in stunning victory over minister in digital TV fight

      28 June 2022

      It’s official: stage-6 load shedding is here

      28 June 2022

      Stage-6 load shedding highly likely later today

      28 June 2022
    • World

      Pictures: Chinese spacecraft acquires images of entire planet of Mars

      29 June 2022

      Arm aims for leg-up in smartphone games with new chip tech

      29 June 2022

      Warnings of a final bitcoin ‘washout’

      29 June 2022

      Sony launches into PC gaming hardware

      29 June 2022

      Ether holds its breath for the Merge

      28 June 2022
    • In-depth

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022

      Sheryl Sandberg’s ad empire leaves a complicated legacy

      2 June 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Opinion»Duncan McLeod»David vs Goliath in Parkhurst fibre battle

    David vs Goliath in Parkhurst fibre battle

    Duncan McLeod By Duncan McLeod2 November 2014
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Duncan-McLeod-180-profileThe leafy Johannesburg suburb of Parkhurst, one of the first in South Africa to get high-speed fibre-to-the-home broadband, now looks set to be the scene of a turf war between two competing fixed-line telecommunications providers. It’s a David vs Goliath battle that could also help decide which of two competing operating models for delivering home fibre in South Africa is better.

    Stellenbosch-based start-up Vumatel identified Parkhurst as the first suburb for its fibre broadband network, offering blistering fast connections unheard of in South Africa until now.

    For the past few months, the company has been trenching through the streets of Parkhurst and this week connected up the first homes at speeds of up to 1Gbit/s. That’s 100 times faster than the fastest copper-based ADSL broadband available from Telkom. Vumatel plans to have the entire suburb — 2 200 homes, plus businesses — wired up by February and has now identified a further 50 suburbs where it intends duplicating the Parkhurst model.

    But Telkom, which announced earlier this year that it would deploy home fibre broadband to 22 suburbs in well-heeled parts of Johannesburg, Pretoria, Cape Town and Durban before the end of the year, in the past week began begun laying its own fibre in Parkhurst, effectively duplicating Vumatel’s efforts. A turf war between David (Vumatel) and Goliath (Telkom) now looks inevitable.

    But does this duplication make sense? Ryan Hawthorne, the technical adviser to the Parkhurst residents’ association, welcomes it. He says it’s the sort of competition in fixed lines that consumers have dreamt of for years.

    However, Vumatel CEO Niel Schoeman says South Africa can ill afford infrastructure duplication. He says it could destroy the financial feasibility of fibre projects, where the return on capital is already very long. Instead of Telkom’s wholesale arm duplicating Vumatel’s network, its retail arm should be leasing access from Vumatel to provide services to Parkhurst residents, he says.

    Schoeman warns that duplication of infrastructure is hard to justify in a market like South Africa where homes are relatively far apart. “In South Africa, there are long distances between customers. If you really want to make the business case work, you have to share infrastructure. If another player comes into Parkhurst, they will double expenditure and halve the market, making it unfeasible.”

    But for telecoms operators like Telkom, willingly giving up control of the infrastructure — historically their bread and butter — could prove to be a step too far. One has to ask why the company chose Parkhurst as one of its first 22 suburbs to target with fibre broadband after it was already aware of Vumatel’s plans to deploy infrastructure there. The idea of a fixed-line infrastructure rival, even if it’s a small start-up, must displease a company that’s historically had an absolute monopoly.

    In theory, infrastructure competition should help bring down prices for consumers, but in the fibre market, where upfront capital costs are high and short-term returns unlikely, it may make sense to consider a different model.

    Fibre-optic-640

    Unlike the model favoured by entrenched telecoms operators like Telkom, MTN and Vodacom — all of which, by the way, have big plans to deploy home fibre networks across South Africa — Vumatel is providing its network using what’s called the “open-access model”.

    Unlike the incumbents, which favour a model of “vertical integration” — they like to provide the infrastructure as well as many if not all of the services on top of it — Vumatel believes the better approach is to provide only the infrastructure. Internet service providers then lease access to the network on a wholesale basis to provide Internet access and other services to retail consumers.

    Vumatel’s Schoeman and many other players in the fibre industry, including metropolitan and national long-haul operators Dark Fibre Africa and FibreCo, argue that open access is the best model for building this next-generation infrastructure. MTN and Vodacom take the opposing view, while Telkom, intriguingly, has vacillated on the issue in recent months and may even join the open-access camp. If it does, it will signal a significant change in approach.

    In the meantime, Parkhurst looks set to be a fascinating battleground.

    • Duncan McLeod is editor of TechCentral. Find him on Twitter
    • This column was first published in the Sunday Times
    Dark Fibre Africa Duncan McLeod FibreCo MTN Niel Schoeman Telkom Vodacom Vumatel
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleWill Virgin Galactic’s crash end space tourism?
    Next Article Eskom moved to prevent nationwide blackout

    Related Posts

    Telkom Infinite launched: R299 for unlimited mobile data

    21 June 2022

    MTN to deploy 5G in more regions in South Africa

    21 June 2022

    Has South Africa’s advertising industry lost its way?

    21 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Think herding cats is tricky? Try herding a cloud

    29 June 2022

    How your business can help hybrid workers effectively

    28 June 2022

    Hands off our satellite spectrum!

    27 June 2022
    Opinion

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.