Though no serious investments have taken place yet to bring high-capacity fibre infrastructure into South Africans’ homes, Neotel chief technology officer Angus Hay says it will happen. “It is inevitable,” he says.

Hay, speaking at a fibre telecommunications conference on Friday organised by FTTH Council Africa, says the penetration of fixed-line broadband in SA is low compared to many other markets. He says there is a stark contrast between fixed-line broadband penetration — estimated by Hay to be about 2% — and mobile voice, where penetration as measured by the number of active Sim cards in service is over 100%.

“There’s a pretty fundamental mistake here and it is having a very significant effect on SA as a global competitor,” Hay says. “We are starting to slip down global rankings on every economic indicator [because of this].”

Citing research by Telegeography, Hay says that between 2001 and 2005, SA plummeted down the rankings compared to other African countries. “We are continuing to drop against other African cities [and] it’s only a matter of time before somewhere like Lagos [in Nigeria] overtakes us.”

He describes the situation as a “fundamental problem with broadband in this country”.

“There is a bad habit in this industry of treating bandwidth like a commodity,” Hay says. “Bandwidth is not oil. One day oil will run out and the price will carry on going up forever until at some point we will have to stop using it. Bandwidth is not like that.”

Hay says that “to a good approximation” bandwidth is “infinite”. “What costs money? It’s not the bandwidth that costs money.”

Rather, the costs in delivering high-capacity fixed-line broadband lie mainly in digging trenches and getting cable infrastructure into businesses and homes. The industry, Hay says, needs to think of “smart ways” of reducing these costs.

He says some people think mobile broadband will come to the rescue. But he says mobile and other wireless technologies will serve as an adjunct to high-speed fixed-line systems. Because of spectrum limitations, mobile can’t deliver the sort of capacity people will demand.

The problem is SA’s copper access infrastructure, operated by Telkom, is a “legacy technology”. Over time, Hay says, fibre to business premises and homes will be the norm. The challenge is getting there.

“There is still a perception in SA that fibre is this hugely expensive value-add thing that’s never going to happen,” Hay says.

The industry needs to work together to find a way of make fibre-to-the-home a reality in SA, he adds, saying Neotel can’t do it on its own because the initial capital outlay is too high to justify it. “We need partners in this loop that will allow this to happen. We need triggers to make it happen. We need different business models to make this work.”

Hay says a first step should be for all property developers to provide fibre as standard in housing estates and other developments. “You wouldn’t build a house without water and electricity feeds into it. Why is broadband different?” — Duncan McLeod, TechCentral