South Africa’s fight to become a global broadband powerhouse

For years, South Africa’s telecommunications sector was under state control, limiting investment, slowing its development, and holding back Internet access.

However, persistence from challengers of the state monopoly helped transform the sector into one of the most successful in the world.

In the years before the turning point of South Africa’s broadband journey, known as the “Altech case,” Telkom took several measures to cement its telecoms sector monopoly.

In 1997, the company attempted to become the country’s sole provider of Internet services.

However, the Internet Service Provider’s Association (ISPA) opposed this, and Icasa’s precursor, the South African Telecommunications Regulatory Authority (Satra), ruled against Telkom.

Around the same time, Telkom and its new international shareholders inked a deal that placed the company above the law.

This was revealed in an academic article titled “Another instance where privatisation trumped liberalisation: the politics of telecommunications reform in South Africa – a ten-year perspective”, published in 2007.

According to the authors, Telkom’s shareholder agreement with Thintana Communications contained clauses stipulating that neither company would have to abide by legislation that violated their agreement.

The Thintana Communications consortium comprised US telecoms group SBC and Telekom Malaysia.

A former SBC operative in South Africa told the article’s authors that their strategy was very clear: “Maximise the value of Thintana’s investment during Telkom’s five-year exclusivity period and then exit quickly.”

This five-year period was meant to be from 1997 to 2002.

However, the Telecommunications Act that allowed Telkom to hold onto its monopoly was only replaced by the Electronic Communications Act (ECA) of 2005.

After the ECA came into force, there was a major turning point in South Africa’s broadband history.

The pivotal moment was a court battle involving the Independent Communications Authority of South Africa (Icasa) over network operators’ right to build their own national infrastructure.

Although known as “the Altech case”, it involved several industry stakeholders.

Altech sued Icasa and won the ability for everyone to convert their old licences to one of the ECA’s new individual electronic communications network service (I-ECNS) licences.

Around the same time, vendor-neutral data centre Teraco launched its first data centre. It would later play a critical role in making high-speed broadband affordable.

By 2009, the licence conversions were underway, allowing all licensed operators to build their own network infrastructure.

That same year, Seacom launched in South Africa, breaking Telkom’s monopoly on submarine capacity, which the SAT-3 cable had afforded them.

Thanks to these developments, Mweb launched the country’s first uncapped ADSL service in 2010. However, for the service to be sustainable in the long term, it began campaigning for free and open peering.

Peering refers to the voluntary interconnection of separate networks on the Internet to exchange traffic between their users.

In 2011, Teraco launched the NAPAfrica Internet exchange point. It took the baton from Mweb and championed free and open peering.

NAPAfrica also encouraged major content owners and distribution networks like Netflix, Google, and Akamai to bring their content to South Africa.

In 2012, two more submarine cables were connected to South Africa, WACS and EASSy, providing resilience and additional capacity.

African undersea cables in 2024. By Steve Song / ManyPossibilities.net
African undersea cables. By Steve Song / ManyPossibilities.net

The final piece of the puzzle was the “last mile” — the fixed line connections running into people’s homes, which Telkom had dominated for decades.

The beginning of the end of Telkom’s fixed-line monopoly came in 2014, when an unknown little company called Vumatel began building a fibre network in Parkhurst.

Vumatel’s arrival ignited a gold rush in fibre-to-the-home (FTTH) connectivity. Others quickly followed its lead, and a land grab ensued.

By 2017, thanks to NAPAfrica championing free and open peering, the cost of bandwidth had plummeted. The price of a 100Mbps uncapped fibre service had plummeted to R1,000 from R5,500 in 2014.

This was because content owners were essentially now paying for international transit, and open peering meant local bandwidth was almost free.

That same year, Vumatel announced its plan to provide 100Mbps to people in townships for R89 per month in an attempt to bridge the country’s digital divide.

One way it proposed doing so was using aerial fibre instead of traditional trenching.

Although the ambitious price point remained elusive, others followed suit, including Telkom’s Openserve, Frogfoot, and Metrofibre.

This is a market where many operators are now racing to provide coverage, including several new entrants.

Vumatel said at the end of 2023 that their “focus remains on the commercialisation of our products within dense lower-income areas, such as Alexandra, Johannesburg and Kayamandi, Stellenbosch.”

Similarly, Frogfoot also said it aimed to provide its fibre-to-the-community service to underserved areas in Vrygrond and Philipi in the Western Cape.

As of 2024, South Africa has a plethora of subsea cables connecting to our shores, including the massive Google Equiano cable launched last year.

The Facebook-backed 2Africa cable started going live this year.

Equiano’s arrival has been most welcome, likely saving South Africa from a massive network outage in 2024 when five submarine cables connecting to the country had become unavailable due to breaks.

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South Africa’s fight to become a global broadband powerhouse