South Africa’s telecommunications industry is on the cusp of its next wave of growth, thanks to the growing uptake by businesses and consumers of bandwidth-intensive applications such as cloud services and Internet streaming.
Fast-changing user behaviour is putting pressure on telecoms operators to evolve their business models. It’s thanks to competition from innovative start-ups and small operators that the larger players have had to step up their game in fibre.
We’ve been talking about the cloud and Internet TV for years, but didn’t have the infrastructure to support the concepts. Now it’s finally coming to fruition because new competitors have forced content, application and infrastructure providers to speed up the deployment of new offerings.
It was Conduct Telecommunications’ (now part of Dark Fibre Africa) entry into the fibre-to-the-business market and Vumatel’s entry into the suburban fibre-to-the-home market that galvanised South Africa’s incumbent operators into action.
Today, there’s a flurry of activity in the fibre market, and the way in which businesses and consumers use the Internet has changed radically.
As higher bandwidth speeds on copper and wireless became more affordable, businesses and consumers began dabbling with cloud apps and video streaming. Yet, the user experience wasn’t ideal and many users became willing as a result to pay a premium for faster, more reliable connectivity.
Among businesses, fibre is all about offsite backup, offsite data storage and other software-as-a-service and infrastructure-as-a-service offerings that unleash the true power of the cloud.
In the home, fibre is all about multiple people watching Internet TV streams on different screens. These applications have created a business case for widespread fibre roll-out across the country.
This, combined with the fact that technological innovations have driven the cost of fibre deployment down, means that operators are more willing to take a moderate risk by providing end users with the experience they desire. And the risk has paid off.
Consumers are now clambering for new services and the fibre that delivers the best experience. It seems that every time you turn around, yet another operator has emerged to serve this booming market.
With the competition that is emerging, operators will need to shift their focus to a lean, customer-orientated business operating model to remain relevant. The good news is that fibre will become more and more profitable for them as they reach scale.
A fortunate side effect is that the more fibre is put into the ground, the cheaper it becomes to deploy fibre infrastructure to neighbouring communities.
It may be hard to imagine now, but in the near future you can expect fibre deployments to surge in areas outside the main metros of Johannesburg, Durban and Cape Town.
The capital costs of deployment are falling and the barriers to entry have been removed. It will be economically feasible to deploy fibre even in areas where the average telecoms revenue per user is considered low in today’s terms.
In a few years, everyone will be able to use their Internet connection indulgently – for video calls and media streaming, and real-time backups will become second nature not just for businesses but for residential users as well.
- Suveer Ramdhani is chief development officer at Seacom
