[By Duncan McLeod]
SA will soon be awash in cheap international bandwidth. The challenge is getting that bandwidth into the hands of consumers and companies. So, news this week of the launch of a new fibre operator is encouraging.
Eassy. Wacs. Ace. Main One. These are the names of new cable systems that are either in the works or already under construction. Together with the Seacom cable in the east and the Sat-3 system in the west, they promise a flood of cheap international bandwidth.
But there are two challenges: expanding the national backhaul that connects the country’s towns and cities, and improving the access networks that connect people to the network of their preferred telecommunications operators.
In national backhaul, a lot is already being done to break Telkom’s monopoly. Government-backed Broadband Infraco is set to launch soon, providing an alternative to Telkom.
And MTN, Vodacom and Neotel together are building a national fibre network to link Johannesburg, Durban, Cape Town and other towns and cities. The same three companies are also deploying fibre links in metropolitan areas and bringing fibre infrastructure closer to businesses and homes.
This expansion will take time, but many of the top 200 companies are already able to tap into fibre not controlled by Telkom.
The real challenge will be bringing fibre to small and medium enterprises and, ultimately, into people’s homes. Pulling fibre is an expensive proposition. That’s why many analysts have suggested that SA should opt for wireless alternatives. But the economic benefits of high-speed fixed-line access are enormous.
Though it’s unlikely SA will get fibre to the home any time soon — mainly because the population is spread out over a wide geographical area — there are encouraging signs of activity in the business market.
A new company, Metrofibre Networx, backed by former Absa CEO Steve Booysen, plans to take high-speed fibre into buildings across the country, starting in Gauteng. The company, headed by former executives from Dark Fibre Africa, a privately owned fibre backhaul provider, plans to invest hundreds of millions of rand, if not more, taking fibre directly into business premises.
CEO Malcolm Kirby says Metrofibre Networx is specifically not focusing on SA’s top 200 companies, which are already fairly well served by Telkom and other operators.
Rather it has identified large companies at the next level down, as well as smaller enterprises, as its target market.
It will soon begin building the first phase of its network, connecting businesses in Pre- toria and Centurion. Sandton, Bryanston, Rosebank and Midrand will also be targeted.
Though Metrofibre Networx has no plans (at least not yet) to build fibre into residential estates and into people’s homes, it is encouraging that private investors are stumping up the cash to get into the infrastructure game.
It’s likely there will be a domino effect in SA telecoms as prices tumble and services improve.
The first domino to fall was international connectivity. Then we need competition in national and regional backhaul. That domino is already starting to wobble.
Lastly, that bandwidth must be delivered cheaply to business and retail consumers. That’s starting to happen through a combination of wireless and fibre, though it’s early days yet, and much more investment is still needed. Regulatory intervention to open up Telkom’s copper network to rival players will also help speed up the process.
SA consumers have long complained about high broadband prices and poor service. The good news is the dominoes are falling, one by one.
- Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
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