From a 33.6kbps modem to a top South African ISP

Cybersmart is one of South Africa’s most successful Internet service providers and a prominent fibre network infrastructure player.

While many South Africans are familiar with Cybersmart and its LightSpeed fibre offerings, not many people know how the company started.

Cybersmart started as an Internet café called Inthenet in Sea Point in 1996 which used a 33.6kbps modem to serve their clients.

Cybersmart founder Laurie Fialkov said their Internet café in the Adelphi center in Sea Point was a hit, with a queue out the door to experience the Internet.

Fialkov and his brother opened a second Internet café down the road and served these two businesses through a 64kbps Diginet line out of their father’s flat in Greenpoint.

Cybersmart is born

Fialkov’s father, a chartered accountant, had a shell closed corporation (CC) called Cyber-Smart, and he asked Laurie whether he liked the name, which he did.

“We therefore started a new venture which supplied the two Internet cafes in Sea Point with connectivity under our current brand Cybersmart,” he recalled.

It was still nowhere close to an Internet service provider, but a few fateful events pushed Fialkov in this direction.

Zaid joins Cybersmart

A carpenter named Hashim was fixing the kitchen cupboards in Fialkov’s father’s flat and he noticed the Diginet setup in the bedroom.

He asked Fialkov if he had a job for his son Zaid. “I said ‘for sure’, he could cut his teeth at one of the Internet cafés.”

Zaid excelled in the technical environment, teaching himself to program and how to administer Linux and FreeBSD.

“He now runs our hosting and VMware division and is a shareholder and director at Cybersmart,” said Fialkov.

Selling analogue lines

Cybersmart started to sell analogue leased lines which was a “pretty damn successful” area for the business.

“I had a bank of Microcom modems all the way up the wall, but our block of flats ran out of copper pairs for the modems,” said Fialkov.

Telkom quoted him R250,000 to provision another 100 copper pairs for his flat, which he described as “a bit excessive”.

“I went looking for a new property and found one in District Six which was only 250 meters from the Barrack Street exchange,” he said.

The property was owned by one of Fialkov’s swimming club friends and they agreed on a selling price of R1.5 million.

“The deposit was R250,000 which was the same as what I would have had to pay Telkom in my existing building,” he said.

“I managed to get a 15-year bond with the R250,000 deposit and that was the birth of Cybersmart’s head office,” he said.

Server room

Cybersmart needed a server room, and Zaid’s father was contracted to build this room with a raised wooden floor.

The picture below shows Fialkov and Zaid working while the server room was being built.

Telkom – “What are you doing?”

Soon after opening their new office in District Six, Fialkov met their Telkom service manager Barry Paterson.

“I still recall Barry asking me what exactly we think we are doing, highlighting that we are going up against a giant,” he said.

Paterson told Fialkov that SAIX has many megabits of bandwidth and that Cybersmart, with its 256kbps Diginet line, would find it tough to compete.

This did not distract Cybersmart from its goal and the company continued to grow its leased-line business.

“Ironically, Barry left Telkom a few years ago and came to work in our wholesale division until he retired,” said Fialkov.

Trenching to the Barrack Street exchange

Cybersmart was paying “a fortune” for Telkom to provision services from the Barrack Street exchange to its office a few hundred meters away.

When Cybersmart’s VANS licence was converted to an ECNS licence it provided the ISP with the opportunity to carry its own bandwidth from the Telkom exchange.

“We asked Telkom whether they would let us trench from our office to the exchange and pick up our services from there,” Fialkov said.

“They agreed and we did out first fibre trench and it was a great investment which was paid off in 3 months.”

Fialkov said it was also the start of Cybersmart investing in its own fibre and ultimately the birth of its LightSpeed fibre services.

Now read: Cybersmart founder’s R44-million mistake

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From a 33.6kbps modem to a top South African ISP