Fibre everywhere
Telkom’s monopoly in the fixed line market has come to an end and many telecoms players are investing in their own fibre networks to compete against the incumbent.
The new Individual ECNS licenses equals the playing field in terms of rights to roll out a network, and a fibre backbone is a much needed asset to be able to compete with a well entrenched telecoms provider like Telkom.
International fibre projects
Various submarine fibre projects are in the pipeline which will compete directly with the Telkom controlled SAT3/SAFE system which currently has a monopoly in the international bandwidth market in South Africa.
The most likely system to land first is SEACOM which will link South Africa to India and Europe at a fraction and the current cost of bandwidth on SAT 3/SAFE.
EASSy is also progressing and has an estimated operational date of 2011, although some investors would like to see it land in South Africa in time for the 2010 World Cup.
And then there are some submarine fibre initiatives on the West Coast of Africa which include the government and Nepad led AWCC/Uhurunet system and a potential new system in which companies like MTN are involved.
National fibre networks
Apart from the international submarine cables, which have attracted a great deal of media attention, there are numerous terrestrial fibre optic projects across South Africa.
Residents in Gauteng, Cape Town and Durban will be used to seeing trenching going on in metropolitan areas, and Neotel is responsible for much of this activity.
The company is aggressively expanding its network – both on the fibre and wireless sides – in metropolitan areas. Neotel has an obligation to cover 50% of the population in metropolitan areas in 5 years and 80% of the total population of the country after 10 years.
Neotel already has a 2 000 km metropolitan fibre network to compliment its 8000 km national long distance network, and is actively increasing the reach of its inner-city network.
Neotel is currently rolling out fibre to the curb and said it is pulling fibre into every building in its fixed line coverage areas, independent of whether the current users of the building will use Neotel’s services or not.
Neotel said that the phased rollout will continue where enterprise customers will be served with fibre connectivity first, followed by smaller businesses and residential customers.
On the international fibre front Neotel already has access to both the SAT 3 and SAFE landing stations and its network is already carrying traffic from these cable systems. The company pointed out that their fibre infrastructure is already in place to carry international traffic from SEACOM when it lands in mid-2009.
Neotel is however not the only one to blame for dug-up roads and pavements. Telkom, MTN and Vodacom are all putting new fibre in the ground.
MTN started building their Gauteng fibre network in the beginning of August. The company plans to connect as many of its nodes in the Gauteng region as possible with its own fibre network.
Vodacom – through Vodacom Business – is well on its way to establish itself as a major player in the corporate telecoms market, and its growing fixed line network forms part of its plans. Two of Vodacom’s fibre rings in Johannesburg and Pretoria have gone live in mid-June and now carrying traffic.
Increased fixed competition and the potential loss in revenue means that Telkom is also actively rolling out fibre to the curb, both to serve its enterprise customers and to shorten the local loop. A shortened local loop is a necessary step to pride higher speed broadband services – typically ADSL 2+ – to consumers.
Not only the metros
According to Brian Nielson, research director at BMI-Technology, once true competition emerges along the international routes, and in the major metropolitan areas, the focus will increasingly shift to national long distance routes.
Currently Neotel provides the only real alternative to Telkom along these routes, but MTN and other players are already investing in their own national fibre infrastructure.
Neilson points out that fibre is also being laid to the pavement in some suburbs, and whole communities are also considering laying their own fibre cables.
“This trend is not restricted to gated communities; management committees in suburbs like Parkmore in Sandton are also actively investigating the option of running their own service, including the option of IPTV services from a third party pay TV player, along with closed circuit TV for security cameras,” said Neilson.
The future effect of all this fibre infrastructure is not difficult to guess: lower bandwidth prices and improved telecoms offerings – especially in the broadband space.
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