Broadband 2.0
The explosion of the Internet has meant that global data bandwidth has dwarfed voice bandwidth. This makes Vint Cerf’s words “IP over everything and everything over IP” quite prophetic, and this is becoming increasingly obvious in South Africa.
Telkom, Vodacom, MTN and Neotel are investing heavily in fibre-based, new-generation networks.
In these networks internet protocol (IP) is the de facto bearer of all future services, and has not only made network distance less relevant but also given rise to true convergence of services such as voice, broadband and content.
According to Neotel there is a rapid migration to IP in the enterprise segment, with the adoption factor in Europe and US moving from 28% in 2005 to 74% by 2008.
True broadband
While the backhaul network architecture is an important factor in the delivery of any telecoms service, last mile access is equally important in the provisioning of broadband.
South Africa’s fastest broadband service currently is 4Mbps ADSL from Telkom, followed by Vodacom and MTN’s 3.6Mbps HSDPA services.
Neotel however feels that “to deliver rich, real-time content, we can now talk of ‘Broadband 2.0’, providing speeds of multiple Mbits/s per customer simultaneously".
The company points out that these speeds must however not be the technological upper limit of the last mile access technology which is often mentioned, but rather the sustained throughput experienced by the end user.
Neotel said that triple play services – a combination of broadband, voice and video – is currently the benchmark, and that the true broadband market is distinct from the 3G mobile environment.
Neotel has indicated that fibre-to-the-home (FTTH) is in its broadband roadmap, and that this technology is most suitable to provide consumers with true broadband services.
Telkom may however have a head start on Neotel to provide triple play services over its network through its existing copper infrastructure and by shortening the local loop for the delivery of ADSL 2+. ADSL 2+ can provide speeds of up to 24Mbps as long as the quality of the copper is good enough and the local loop length is short enough – typically less than 1.5km.
Neotel has, however, indicated that apart from the odd chance of a successful local loop unbundling process, it has no plans to use copper in any part of its network. This, the company said, is partly due to the continued problem of copper theft.
Broadband prices
According to Brian Nielson, research director at BMI-Technology, prices in the telecoms and broadband space will continue to fall.
“Probably the best example of competition starting to really bite in South Africa has been in the broadband internet services arena. Until recently this competitive behaviour has been largely driven by the mobile operators, which have introduced globally competitive mobile data prices in South Africa,” said Nielson.
“When Neotel launched its fixed wireless voice and data services in April 2008, this added a new dimension of competition in the broadband internet market, due to the attractively prices data packages, including those for seriously data-intensive users.”
The effect of Neotel’s pricing is yet to be seen in price and service adjustments from Telkom, Vodacom and MTN, but as the company expands its coverage and starts to increase its market share consumers can expect the big three to respond.
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