Fibre is firing in Jozi - TechCentral

Fibre is firing in Jozi

Johannesburg skyline at night (image: South African Tourism)

Johannesburg skyline at night (image: South African Tourism)

The uptake of fibre to the home (FTTH) in Johannesburg is proof that the days of 4Mbit/s ADSL connections are numbered.

Telkom, which had rolled out fibre to 38 000 households by August last year, has committed to raising that number to 500 000 by December 2016 and to a million homes by 2018.

Nevertheless, there are still many suburbs in Johannesburg that are not within Telkom’s immediate plans.

Telkom’s FTTH currently offers download speeds of up to 100Mbit/s, allowing you to download a 4,7GB DVD in less than seven minutes and a full music album in eight seconds. Unlike ADSL, fibre speed does not have an “up to” qualification. It guarantees you the maximum speed.

Despite FTTH being a substantially expensive business — Vumatel CEO Niel Schoeman says it would cost tens of billions of rand to bring fibre into every suburb in Johannesburg — more companies that install the infrastructure continue to enter the space, going into areas where Telkom has delayed or overlooked.

Vodacom and MTN both have FTTH divisions, while Cell C plans to launch its own offering in this quarter. MTN alone spent R3bn on the roll-out of national fibre in the year ended September 2015 and, according to MTN South Africa acting chief technology officer Sidney Arnold, more investment is anticipated for 2016.

“The number of suburbs with a fibre connection equates to 26% of the suburbs in Johannesburg,” says Arnold, “and the range of the fibre network is over 2 000km.”

Dark Fibre Africa has the largest fibre footprint in South Africa, leasing its networks to a wide range of Internet and telecommunications providers, and has shown that owning a fibre network is good business.

All the Internet service providers, including the likes of MWeb and Webafrica, pay rent to companies like Dark Fibre in order to offer fibre to their customers. The customer is not obligated to have a contract with the infrastructure developer, so it is also convenient for them. Meanwhile, Vumatel has rolled out fibre to 18 Gauteng suburbs and plans to surpass the 100 000 mark this year.

Price-wise, the charges vary. There is a once-off connection fee which ranges from R1 500 upwards and the monthly fees vary depending on the package and your chosen service provider. Metrofibre Networx head of FTTH Jacques de Villiers says its cheapest uncapped line, which is for 10Mbit/s, costs about R1 050/month. “Our capped equivalent goes for about R550. That’s for a 10Mbit/s line, capped at 20GB,” says De Villiers.

This is a lot cheaper than the amounts being bandied around this time last year. Juanita Clark, CEO of the FTTH Council Africa, says this is because fibre is becoming cheaper as companies share their infrastructure and spend less money on their own deployment.

Getting fibre in your area
“Unfortunately deployment of fibre is a slow process and it takes time,” Clark says. “By the time a company breaks ground, they have already made a massive investment.”

That is why companies need to do feasibility studies based on confirmed orders from people within the area before they can begin building the infrastructure into that area. The cost is not in the fibre itself, but in digging trenches in which the fibre cables are laid.

De Villiers says it costs R400/metre of fibre cable, and that is without the equipment at the front and back of the connection — the server, and the router on the customer side. He says that depending on the distance from an existing fibre network and the size of the area that needs to be covered, they could need an initial commitment of up to 40% of all the residents in order to go ahead with a project.

Vumatel CEO Niel Schoeman

Vumatel CEO Niel Schoeman

Says De Villiers: “You get the early adopters, who as soon as we approach them ask where they can sign. They can’t wait to get fibre. Then there are others who wait for something to happen, so when they see us digging up the roads and payment, then they sign up. Others will wait and see until their neighbours tell them how well it’s working. The last category is made up of those people who have ADSL contracts with various service providers that they can’t get out of, so they don’t sign.”

He says raising capital remains the biggest obstacle to the business model for fibre, which is why most of the uptake has been in affluent areas.

“Ninety percent of the technology that is used is imported, so you can imagine what impact the rand has had on fibre businesses. We have approved projects for R160m and we’re already doing a capital raise for R500m.”

That said, there are still many areas, such as Fourways, for example, that do not have fibre. De Villiers says this is because of the costs involved and perhaps a perception of limited affordability.

“If you have young couple who have bought a home for, say, R700 000, you aren’t necessarily going to be able to afford an extra R1 000 or so monthly for Internet,” says De Villiers.

Nevertheless, it is always possible as long as the residents and business owners in an area can come together. The Melville area has one such community which, despite not being among the most affluent of Johannesburg suburbs, will be getting fibre through Vumatel this year.

So, it is more a case of organising than anything else. If you live in a sectional title unit or an estate, speak to your body corporate and get assessments and quotes from various providers and choose the company best suited in terms of how it will affect the levy structure. For standalone homeowners, it is best to get in touch with the resident’s association in your community and find out what progress they have made because chances are, they are already considering it. Communities should register their wish to become an FTTH community at www.ftthcouncilafrica.com.

Residents should be aware that, even though fibre could offer many benefits, there are pitfalls. There have been many reports of water and electricity services being disrupted when the cable network is being laid in various areas. Other companies, like Fibrehood, have an aerial solution, where fibre is strung on poles on both sides of the road, but these can be an eyesore.

Says Vumatel’s Schoeman: “Although the roll-out can be disruptive, we are only in each community for about two months and take as much care as possible with the residents to minimise disruption. The long-term benefits of this future-proof technology far outweigh the initial disruption in the roll-out… The central suburbs of Johannesburg should all have fibre infrastructure within the next two years.”

  • This article was first published on Moneyweb and is used here with permission

33 Comments

  1. Please remember South Africa’s Highest density populated area, the West rand, especially Roodepoort

  2. Ofentse Letsholo on

    Big ups to all those who are getting it, I hope y’all take full advantage of it…meanwhile some of us need to buy mobile data bundles 🙁

  3. A cap of 20GB is like 40 minutes of time on the net (assuming this >> [[Telkom’s FTTH currently offers download speeds of up to 100Mbit/s,
    allowing you to download a 4,7GB DVD in less than seven minutes]] is your line speed) and you were downloading through this time, say a few games bought on Steam.

    So what do you do for the rest of the month then? : )

  4. Fibre is still painfully expensive. A 10mbps with 20gb cap is not only a ridiculous proposition, but at R550 it isn’t very far below what a 100GB 10mpbs ADSL line would cost. The real issue is that everyone is digging and nobody is co-operating. The industry always talks about sharing infrastructure, but so far nobody has acted on this. All talk and profits.

    I think the most poignant thing I heard about Fibre last year is that it grabs all the headlines, but is available in fewer Jozi suburbs than Nandos.

  5. Very true. As a 10mbps user I am very unhappy with fibre prices. They are cheaper, but not by much and they tend to offer crappy packages that share no reality with fibre usage. 20gb on 10mbps is a joke. My line idles through that in less than a week.

  6. Ofentse Letsholo on

    Well James problem is the crappy MTN coverage “everywhere I go” especially at home it’s beyond disastrous. So if only they would partner with Vodacom I’d jump right now.

  7. The best part for me is that most of these service providers are independant from #Telkom. Thier service levels are a lot better.

    I’ve been battling with Telkom to fix my ADSL line since December 94CRK010116. I’ve phoned and tried to be polite and follow the correct channels and nothing has happened. I posted my complaint on their Facebook page a number of times and I get a standard message where they keep telling me that they have escalated the matter and someone will attend to my issue shortly but it has still not been sorted out. Another thing I see is that they remove the complaints from their Facebook page so that people can’t see how many people are complaining about their bad and lack of service. Spoke to my neighbour who was also down and she logged a call after me and her issue was sorted out last week Tuesday. Why couldn’t they just fix both our issues at the same time?

    My advice to people looking into ADSL is DON’T do it!!! Rather get Iburst, Neotel or and LTE product from CellC, MTN or Vodacom their service is much better than Telkom’s non-existant service. Even Wait for Fibre Luckily my ADSL is on month to month now so I’m going to cancel it and move.

  8. Greg Mahlknecht on

    That’s just Telkom’s last gasp effort to replace their ADSL income with FTTH income – if you look at the prices, they’re pretty much the same for similar products. Once open access networks become a bit more commonplace, we’ll be looking at R500’ish for uncapped 10mbit and sub-R1000 for uncapped 50mbit. I’m pretty sure that’s where the prices will settle in the medium term.

  9. Yet those aren’t even Telkom’s prices. The FTTH operators are pricing closer to ADSL instead of trying to undercut it. Practically every fibre company is punting this “10mbps with 20gb” nonsense.

    Anyway, Telkom is far from a last gasp. It has over a million ADSL line subscribers – last year a report estimated it would take local fibre more than two years to even come close to half that number. In fact, the most ambitious fibre operator is Telkom – nobody comes close to its 500,000 goal. I think Vox wants to hit around 40,000 in 2016.

    Also, the above article may be inaccurate. As far as I know, Telkom has the largest fibre network in SA.

    So it’s certain that whatever happens in fibre, Telkom will have a big hand in it.

  10. anything would be better than anything from Telkom and their non-existent service. This is not the first time that I’ve had issues with ADSL and I’ve had to wait weeks and weeks and beg and plead to get it sorted out. iBurst has improved a lot though.

  11. Greg Mahlknecht on

    >Practically every fibre company is punting this “10mbps with 20gb” nonsense.

    You’ll notice the vast majority of those are running on Telkom’s fiber network – with a model similar to their ADSL IPC model, they’re setting a base price below which nobody can go. Now and then one of the operators trying to pull that crap on an open network and gets laughed out. Free market FTW.

    >In fact, the most ambitious fibre operator is Telkom – nobody comes close to its 500,000 goal

    … and every month that goes by, it’s clear they’re going to get nowhere near that goal. Around my area, they’re a year overdue on their promises for roll-out, and I know of 2 people in a Telkom FTTH area who are desperately unhappy with the quality of service they’re getting from Telkom FTTH, and now want a “real FTTH” provider.

    This is a problem, because I believe this is a fundamental infrastructure issue that can’t be easily solved – both these people are on overhead lines, and after just a few months the foliage, wildlife and elements are starting to degrade service.

    >Anyway, Telkom is far from a last gasp

    They’re trying to get their customers to pay the same on FTTH they did for ADSL. They think this will work. It can not because they have competition now.

    >Also, the above article may be inaccurate. As far as I know, Telkom has the largest fibre network in SA

    You’re probably right, but that’s largely irrelevant here. FTTH roll out means new fiber has to be laid. The backbones are the easy part, Companies like DFA can roll those out and connect those up far quicker than the last mile can be trenched.

    > So it’s certain that whatever happens in fibre, Telkom will have a big hand in it.

    No doubt, but I think that coming out the other side of the FTTH wave, Telkom will be a very different company, if it stays in the consumer game at all. It’s really bad at it, and hasn’t learned anything from its decades of mistakes.

  12. Exactly what I am saying. What is the point of FTTH and a pathetic 20GB cap. I suppose my real question is why should I bother to move from my 4MB/s connection if this is the sort of ridiculous offering I’ll be given.

    *epic sigh*

  13. The price tag of R500 includes line rental.

    I’m on a 50/5mb uncapped at R1k. Which, incidentally is not far off the cost of Afrihost 10mb uncapped incl. line rental. Trust me I did the math.

    With the stability and speed of Fibre, I am happy with the cost, also considering the fact that I now run everything through fibre including VOD, internet radio, etc. So if you add in the fact that I cancelled DSTV in favour of VOD, I’m actually saving a couple of hundred every month. And that’s aside from the productivity benefits of stable and super fast connectivity.

    FTTH companies have pricing elasticity because they offer a better service than ADSL, You can’t begrudge them making a (marginally larger) profit off that?

    BTW, the week Vumatel finished it’s install in my neighborhood, Telkom arrived unannounced and started installing fibre. They screwed up and promptly cut electricity to one half of the block and then managed to disconnect all phone and ADSL lines for a week to the whole block. Best marketing push for Vumatel ever.

  14. Ofentse Letsholo on

    Everywhere I go I get Vodacom LTE even in my kasi so that says a lot about Vodacom’s network investment. MTN man I fought a 4-6yr battle that I lost and had to port eventually.

  15. Fibre is definitely cheaper, but it still doesn’t play well at the bottom end. I don’t need a 50mbps line – if anything I’d like to reduce my internet costs. 10mbps fibre at R500 is ideal, but not if everyone keep offering ridiculous caps. I think 10mbps uncapped fibre should be R500 or less.

  16. Great reply, thanks!

    The overhead fibre point you make is very key. A lot of fibre companies are resellers are starting to opt for that. So I suspect the overhead line problems are going to increase across the industry.

  17. i have to agree, i ported from vodacom back to mtn due to coverage issues.. and thats in hyde park of all places!

  18. You need to compare the costs of fibre correctly. I’m on a 50/5 connection with a 400GB cap (unshaped) for R1000, including a VOIP handset and 1GB of mobile data. This replaced an ADSL account (uncapped 4Mbps R550), a Telkom voice line (R190), and a mobile data subscription (R149). So for effectively R111 more I have more than 10 times the bandwidth and a sufficient amount of data. Plus my landline calls are cheaper.

  19. I’m on Vumatel using Vox as ISP. Check out Vox’s FTTH webpage, they show the various packages available on various FTTH networks. I did include a link in another post but it is awaiting moderation.

  20. Nice, the Vumatel, DFA and Fibrehoods prices are very good. About time, though – packages weren’t this competitive six months ago. Clearly the long-awaited price war is brewing.

    Sadly availability is very narrow – I don’t think these prices can be held as a general standard for FTTH pricing. We need Telkom, Neotel and the other heavyweights to come to the party. I doubt I’ll see Vumatel in my neighbourhood for several more years, if at all.

  21. Nope. I’ve had fibre since last july at this price. It is just Telkom that is keeping prices high.

  22. Andrew Fraser on

    For most of the smaller players, it is all about take-up. If your suburb’s residents can show that 50-70% will take up the service, the providers will come. In Joburg northern suburbs, new roll outs are announced almost weekly.

  23. Greg Mahlknecht on

    Link Africa is installing with a non-binding 40% commitment from residents. It’s surprisingly hard to get that buy-in though, people are so uninterested in becoming part of a movement or cause, they just want to buy the thing, hoping someone else will fill in the forms and questionnaires.

  24. Greg Mahlknecht on

    It’s quite simple. If it’s on Telkom’s backbone, it’s a ripoff. If it’s on someone else’s, it’s cheap. I also believe Telkom solution is technically inferior. They seem to be using their war-chest to tell people they’ll sell FTTH to people, rather than actually rolling it out. I don’t see this ending well for them, they aren’t playing in a protected space any more, and have no real advantages.

    I met with one of the executives of a large FTTH infrastructure player, and he said it’s really quite simple. Telkom’s top heavy and badly managed. Their staff costs and expenses are double industry norms. They can’t afford to compete in a fair market. Maseko is doing a bit to curb this, but that’ll take years and years… simply too little, too late.

  25. Is Link Africa installing aerial or trenched fibre? Aerial is cheaper and faster to implement but more susceptible to environmental influences (cable breaks due to trees, wind, people driving into the poles etc.)

    I’d be interested to see the Vumatel take-up after installation. Fairly confident that it is around 70% in my suburb.

  26. Anakin StealthVader on

    Having looked at the latest Vumatel project here in Randburg I’k also left wondering whether fibre is worth the cost of R1 050/month just to get uncapped at 10Mbit/s. Yes, great, but this is unaffordable for me at the moment. Plus I’m sure there are are hidden charges as well.

    People still have to eat, pay their municipal bills and pay for other stuff on a monthly basis.

    The capped 20GB package on a fibre line becomes very silly as well for R550 p/month.

    Will have to wait for actual data pricing to come down first (as always)…

  27. William Stucke on

    Come, come, James, you know better. It’s a 50 Mbps Line (with a space after the digits and careful capitalisation) as a measure of speed, and the volume of traffic is measured in GB 😉

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