Streets are humming
Next time you’re cursing the trenches and gaping holes in SA’s roads – being dug by telecommunications companies to pull new ducting for fibre-optic cables – consider this: all the electronic communications traffic carried by all the operators in SA today would use less than 3% of the potential fibre capacity in one of those new ducts.
Such is the expected growth in demand for broadband over the next decade that nearly half-a-dozen operators are laying fibre ducts across SA’s main cities and along the national roads.
And in the wake of a recent Pretoria high court judgment, which found that Internet service providers and other companies with value-added network service (Vans) licences could build their own networks in competition with incumbent operators, more operators could soon be trenching the roads.
But one company, Dark Fibre Africa (DFA), believes the situation could become untenable. DFA, an independent company that is building a national fibre network on which it hopes to lease capacity to licensed operators, says instead of every operator digging up the pavements, they should share the fibre routes.
DFA, whose shareholders include Community Investment Ventures (CIV), VenFin and Absa (which is also providing financing of R950m), is planning to invest R2bn in fibre networks in the next couple of years, R1bn of it in Gauteng alone.
CIV, which has investments in the communications, IT services and power & energy sectors, is headed by businessman Joe Madungandaba. Empowerment firm New GX Capital, headed by former public enterprises director-general Eugene Mokeyane and his business partner Khudusela Pitje, has a 37,3% stake in CIV, which in turn holds an effective 60,2% of DFA.
DFA is the company responsible for the narrow slits that are dug along streets, using specialist machines imported from Europe. The capacity DFA is deploying is enormous. Each of its ducts has the potential to carry 2 016 fibre pairs – two fibre pairs are enough to carry all of Vodacom’s traffic between Durban and Johannesburg, it says.
So far, DFA has rolled out 200 km of fibre in Gauteng at a cost of R600-R800/metre. It also plans to build national links, but these typically cost a third of urban fibre deployment.
The company does not believe that too much cable is being laid. On the contrary, DFA director Malcolm Kirby says SA is simply playing catch-up with Europe and the US.
Fellow director Richard Came says when enormous lengths of dark fibre – fibre that isn’t yet lit up for use – were laid in the US and Europe in the late 1990s, many predicted there would be an oversupply until 2020 or even 2040. “All that fibre has already been taken up,” he says.
There is insatiable demand worldwide for bandwidth, with construction of new, high-capacity undersea cables leading to an acute shortage of cable-laying ships. Vast terrestrial fibre networks are being built across Eastern Europe, Asia and elsewhere, Came says.
SA is just getting started, he says. The recent court judgment is good news for DFA, especially as many of the companies that will soon be able to build their own networks do not have the financial wherewithal to deploy their own fibre networks. Not all are likely to get permission from the metros to dig up streets either – residents of the big cities are already up in arms over the first wave of trenching.
This is certainly a game for those with deep pockets. DFA has a fleet of six trenching systems – including mechanical diggers, trucks and ground-penetrating radar – which cost R15m each.
The company, which hopes to be cash-positive by 2011, signed up Vodacom as its first customer earlier this year and recently sealed deals with a cellular operator and an Internet service provider.
Came declines to name the companies, but Cell C has confirmed to the FM that it is in discussions with Dark Africa Fibre. Cell C CEO Jeffrey Hedberg indicated recently that the company would build a wireless broadband network. To do this, it will need a high-speed fibre network to connect its base stations.
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