The new last mile model
A recent survey conducted by BMI-Tech predicts a growth in developers providing fibre-based triple play services to gated communities. The reasoning behind such a decision would be that the added value that such a network gives to the developer and eventual property owner is better marketability and a higher property value.
To really understand these driving factors one needs to look at two existing components in the property industry:
- Services such as water and electricity
- Finishes such as built-in cupboards and carpet specifications
On a services level, gated communities own the infrastructure within the development. By owning the road, the communities buy the security aspect of access control, whereby which someone can be refused access to the estate as opposed to a public road where any member of public is allowed to use it.
The principle however is quite simple: to own and maintain the infrastructure there needs to be benefit to the owner(s).
Looking at landscaping for example it is quite clear that privately owned open areas are in a far better condition than municipally kept open areas. It is at this level that the privately owned services become a finish, or a feature of the estate, which consequently adds value to the property.
Applying the abovementioned to the telecommunications industry, one has to differentiate once again between non-ownership and ownership of the last mile networks.
Before starting off this differentiation, one needs to acknowledge that the ownership of such a network is not for all LSM levels- it is seemingly more expensive than a public model and not a luxury that everyone can afford- think public transport vs private transport.
The advantages of this system are however as follows:
- True Capitalism and Competition is achieved – Due to the fact that the last mile network is now owned by the users, they have the freedom of choice of switching between service providers, very much in the same way that one can switch between cellular networks by changing the SIM card. This model as opposed to the old model where an operator would literally entrench itself in the development, creating a major barrier to entry for the competition, will see providers tendering for estates as a whole as opposed to individuals having to accept whatever package the entrenched provider offers.
- Total Integration of Services is achievable – As the network is owned by the estate any signal can be transmitted over the infrastructure, giving scope for additional cost savings: This includes CCTV, Remote Electricity-, Gas- and Water Metering, PABX VoIP calls on the estate, Intranet services too mention but a few.
- Better Infrastructure – Estates can purchase the best of breed technology and the highest specifications as opposed to getting whatever infrastructure is available.
- Additional Services – As services are directly linked to the carrier technology, a better carrier technology means that technology intensive applications such as Video on Demand can be delivered.
- High Service Levels is purchasable: By contracting privately owned companies such as ATEC, the residents on the estate can enjoy superior service levels linked to a service level agreement for the delivery of services and management of the network. An example of this is the ATEC 3 Way promise, which guarantees the end-user the following on the same day of occupation of the unit:
–Fixed line telephony, Intercom connection and a fax number
–Internet connectivity and a working e-mail address
–Registration on the estate’s database, allowing physical access to the estate as well as digital access to the estate’s online services through the ATEC e-StatePortal
Developers are willing to undertake this expense, because it is a product differentiator that is in demand because of the otherwise unavailable advantages it brings to the eventual land owner.
Listen to Gerhard Loots discuss this issue is more detail in this week’s podcast
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