Telkom local loop unbundling stalling and FTTH: the silver lining

Telkom’s decision not to unbundle the copper local loop was bad for South Africa in the short term, but will be good for the country in the medium-to-long term, according to Dominic Cull, telecoms regulatory expert with Ellipsis Regulatory Solutions.

Speaking to MyBroadband about the current state and future of South Africa’s broadband landscape, Cull argued that if Telkom had unbundled its local loop like it was meant to (or if Icasa had the capacity and competence to do so), there would have been less incentive for companies to roll out their own infrastructure.

“Fibre-based networks are what we are going to need in order to for South Africa to be competitive on the global stage as demand for media content increases,” Cull said.

Local loop unbundling, or LLU, refers to opening up existing “last-mile” infrastructure — in this case the copper lines that connect people’s homes to Telkom’s network — to other telecommunications service providers.

The basic idea is that these companies would then be able to offer competing services on the same local loop as Telkom, negating the need to roll out duplicate infrastructure.

Cull believes that because Telkom decided against implementing LLU, a number of competitors have emerged to take on the telecoms behemoth’s monopoly in fixed-line access.

Examples of the companies rolling out their own terrestrial fibre optic cable infrastructure in South Africa include mobile operators like MTN and Vodacom, as well as more business and wholesale oriented service providers such as Neotel, Dark Fibre Africa, and FibreCo.

“The failure of LLU as a pro-competitive remedy and the inability of government and Icasa to make spectrum available for the provision of access services has led to an explosion of localised fibre deployments. There is simply no sustainable alternative for the kind of access services being demanded,” said Cull.

MTN and Vodacom started by rolling out fibre to many of their cellular base stations, enabling them to offer high-speed Long Term Evolution (LTE) services on their networks. Both network operators have also started rolling out residential fibre services.

However, the real headway in South Africa’s residential fibre broadband space was made by affluent suburbs in the north of Johannesburg.

Parkhurst announced in May 2014 that it had put out a request for proposal to fibre-to-the-home vendors, with the winning bidder (Vumatel) announced at the start of June.

Vumatel promised the Parkhurst Residents and Business Owners Association that it would roll out a true open-access network, and offer line speeds of between 4 Megabits per second (Mbps) and 1 Gigabit per second (Gbps).

A 4Mbps line would be free, while access to a 1Gbps connection would cost R1,299 per month.

Parkhurst’s apparent success with Vumatel was followed by a similar request for proposals from nearby Parkview, which ended up appointing Dark Fibre Africa as its fibre infrastructure provider.

“My highlight of 2014 was the South African broadband consumer getting off its apathetic behind,” Cull said.

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