Multinational consulting and managed services company, the Birchman Group, is entering SA’s telecommunications market with plans, eventually, to invest billions of rand in a national wholesale fibre-optic network to connect small, medium and large enterprises to high-speed broadband.

The company, which has launched Conduct Telecommunications and raised funding from the Industrial Development Corp, has already completed its first project, wiring up businesses in the Johannesburg suburb of Illovo, near Sandton, to high-speed fibre infrastructure.

Conduct provides last-mile access to fibre on a wholesale, open-access basis, meaning it provides the links to third-party Internet service providers that then “light” and sell capacity on the connections.

Conduct MD Johan Pretorius says with the huge investments being made in undersea cables and national long-distance and metropolitan-area fibre networks, the time is right to begin investing extensively in “last-mile” systems.

For now, Conduct is not taking fibre into residential homes, but is rather targeting businesses of all sizes. “The capital efficiencies and the returns in the home market right now are still a bit limited, but it will happen,” says Pretorius.

The company plans to trench fibre to 60 zones across Gauteng and the Western Cape by the end of the year and to accelerate its investments further in 2013 and beyond.

Pretorius says it’s too early to know exactly how much Conduct, which was established by Birchman in September last year, will invest in fibre infrastructure, but he says it could be anywhere between R1bn and R5bn.

It has no plans to sell access and Internet services directly to end-user business customers and will always work with service providers. “We fundamentally believe that the infrastructure and the services need to be separated,” says Pretorius.

The initial project in Illovo provides access to up to 50 business premises, potentially serving up to 130 businesses. The fibre will be lit for service next week.

Pretorius declines to say which service providers will resell access to the network, but he says the company is in active discussions with a number of players. Conduct will announce within the next month which parts of Gauteng and the Western Cape it plans to focus on next. — Duncan McLeod, TechCentral