One of South Africa’s oldest ISPs launches open access fibre network

Cybersmart has launched an open access fibre network with a unique product structure, promising partner Internet service providers an opportunity to create innovative products.

While the service is extremely price competitive, Cybersmart founder and CTO Laurie Fialkov told MyBroadband that he is excited to provide ISPs with the tools to escape the current market conditions where the only variable is price.

Established in 1998, Cybersmart is one of South Africa’s oldest and most successful ISPs.

When asked whether their fibre network operator (FNO) would trade under the Cybersmart brand or a different name, Fialkov said it was not an easy decision.

“There was much internal debate as to whether we should call the FNO Lightspeed, and the ISP Cybersmart,” he said.

“However, we are launching in Cape Town, and our Cybersmart brand is strong here, so we are sticking with Cybersmart Open Access as the FNO name.”

Cybersmart is differentiating itself from other fibre providers in more ways than one. Fialkov said they also designed and manufactured their own customer premises equipment (CPE).

“There were a couple of obvious issues not addressed by current off-the-shelf hardware,” Fialkov said.

One major issue is that fibre cables are exposed and easily damaged with regular wall boxes and optical network terminals.

Fialkov said they wanted to ensure their CPE design protected the fibre.

He also didn’t want different power supplies for the router and fibre CPE as it creates a support nightmare.

“You need to have one power supply powering both, so they are both on or both off,” he said.

“This is particularly relevant if there is load-shedding and a mini UPS involved,” he said.

“Our CPE can take input voltage ranging from 5V to 12V, allowing you to use the router’s power supply for both the CPE and the router.”

Fialkov said they also wanted the CPE to present a visual alarm if the fibre is broken or the router is not plugged in.

“We want a zero-touch environment when dealing with the ISP,” explained Fialkov.

“Now, the troubleshooting for the ISP is simple: log a fault if the fibre light is red; otherwise, the problem is on your side.”

Additionally, ISPs can order, troubleshoot, and activate services via a portal and API.

“This nonsense that other FNOs impose where you always have to wait for activation is gone on our network,” stated Fialkov.

“If the CPE is on site and an activation request comes in, it will activate immediately via API or the portal.”

Fialkov said they developed two variants of the CPE — 1Gbps and 10Gbps version.

“We managed to manufacture the 1G CPE under $12 (R219), which we believe is way below other FNOs’ input costs,” he said. The 10G CPE is being manufactured for under $50 (R910).

“The lower capital outlay, which relates to a lower build cost per unit, allows us to offer aggressive pricing,” said Fialkov.

Asked about the underlying fibre technology they are using, Fialkov said that they have selected wavelength division multiplexing passive optical networking (WDM-PON).

“Our solution is ‘fibre-count-efficient Active Ethernet,'” he said.

“There are 18 unique wavelengths on Coarse WDM, allowing nine customers per fibre without any contention,” explained Fialkov.

“On Dense WDM, there are 80 unique wavelengths, allowing 40 customers per fibre without contention.”

Regarding the speeds and price points they will offer the ISPs and end users, Fialkov said this was their unique selling point.

“Unlike other FNOs, which effectively charge a percentage of revenue according to speed, we don’t take more margin as speed increases,” he explained.

“We charge a flat rate for a dark fibre access circuit plugged into a 1Gbps or 10Gbps Ethernet port.”

Fialkov said their 10Gbps access circuit will launch in the middle of next year.

“The ISP can decide to offer any speed to their customer, and their cost to us remains the same,” stated Fialkov.

“This means ISPs will be incentivised to offer higher speed packages because their margins will be significantly more on those packages,” he continued.

“The effective margin on our network will be double what they could achieve on any other FNO’s network in some cases.”

Fialkov said this would allow ISPs to offer fibre at high speeds — as opposed to the average fibre package that is still being limited to ADSL-type speeds.

“Furthermore, because our rate to the ISP is fixed irrespective of speed, they can easily develop products similar to our retail 500Mbps Lightspeed product.”

Cybersmart’s Lightspeed service offers user-configurable upload and download speeds.

“Perhaps an ISP will develop a product with a ‘boost option’ where you can pay a small fee to boost your service for a specific timeframe,” he said.

Fialkov explained that Cybersmart Open Access is segmented into two categories: business broadband and fibre-to-the-home (FTTH).

Regarding pricing to ISPs, he played open cards.

He said a 1Gbps network-to-network interface (NNI), which is actually a pair of 1Gbps NNIs — one for business and one for FTTH — is R2,499 excluding VAT for both.

Similarly, a pair of 10Gbps NNIs is R5,999 for both.

Cybersmart charges a once-off R5,500 setup fee for NNIs, and Fialkov said they can be delivered to any of Teraco’s locations, as well as most of the Cape Town data centres.

That includes Cybersmart’s data centre in Canterbury and the WIOCC data centre in Claremont.

“It was important for us that the FTTH NNI was separated from the business broadband NNI, so that the ISP can manage their oversell ratios differently for business and residential users,” said Fialkov.

“It’s also possible to get multiple NNIs across separate locations for redundancy.”

With respect to access circuits, Fialkov said they are charging R520.87 with a R520.87 activation charge for 1Gbps FTTH.

For a 1Gbps business broadband access circuit, the VAT-exclusive price is R694.78 with a R694.78 activation fee.

“If you benchmark these prices against what other FNOs offer, it is similar or lower than their lowest speed (usually 50Mbps) offerings,” said Fialkov.

“There is also no barrier to entry like some FNOs impose, where in some cases you must have R40,000 monthly spend to be onboarded. If you have a licence, then there is no other hurdle.”

Fialkov also said they are running a Black Friday special.

“Any ISP who signs up between Black Friday and 20 December for the 1Gbps NNI will get all their access circuits installed for free until April Fool’s,” he said.

“If the ISP subscribes to the 10Gbos NNI, the free period extends to 1 July.”

Asked about their launch coverage footprint, Fialkov said they specialise in connected buildings.

“There are close to 1,000, which equates to around 60,000 opportunities that we can activate immediately if the CPE is in place already, or within seven days if not,” he said.