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FTTH battle ahead?

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 30 Oct 2014
Two fibre deployments in Parkhurst have raised questions around infrastructure duplication.
Two fibre deployments in Parkhurst have raised questions around infrastructure duplication.

The Johannesburg suburb of Parkhurst - where the first handful of Vumatel's fibre-to-the-home (FTTH) recipients were switched on this week - has also over recent weeks seen fibre being rolled out by Telkom.

The nature of Telkom's rollout is not yet clear, but ITWeb expects feedback on this from the company during the course of the day.

Vumatel, meanwhile, says Telkom is "definitely rolling out fibre", although at his stage it is in the dark as to whether this is for FTTH. Vumatel CEO Niel Schoeman says Telkom's rollout appears to be only in pockets and on a relatively small scale.

Should this amount to infrastructure duplication, says Schoeman, the company fails to see the sense in it, even though competition is healthy.

Open access

Vumatel is not a provider of services itself, rather it is an open access fibre provider - meaning it provides independent infrastructure to all Internet service providers (ISPs) to serve their customers.

"The logic is simple," explains Schoeman, "Having a third party, who does not compete with the ISP for the customer's service, investing in the infrastructure is by far the most effective capital investment model.

"The biggest component of the investment in FTTH is the laying of the fibre. Open access networks allow all ISPs to effectively share the same investment. This effective sharing of the infrastructure by several ISPs results in the most efficient use of capex as duplication of investment is eliminated. It also creates a level playing field for ISPs to compete for customers."

Since Vumatel's fibre network is open access, Schoeman says the company sees no reason for Telkom Retail not to offer its services across its network to customers. "We would welcome that - and see it as a win-win for both parties. Given our pricing for the use of the infrastructure, compared to what Telkom Wholesale charges ISPs, it should make sense for Telkom not to duplicate expensive infrastructure.

"It will be interesting to see how this develops here in the short term, and if Telkom Retail will compete for customers with other ISPs on an equal footing, across infrastructure that is not controlled by their wholesale division. In Parkhurst, this has not been our experience and they appear to have decided to duplicate the infrastructure."

In June, Telkom said it would roll out fibre to 20 suburbs in Johannesburg, Pretoria, Cape Town and Johannesburg by the end of the calendar year. Just under two weeks before Telkom's FTTH announcement, it emerged Parkhurst would soon have access to FTTH, thanks to the local residents' association.

In all, Vumatel has earmarked 42 suburbs in Johannesburg and Cape Town, where it will deploy a similar open access fibre network. The company partnered with Vox Telecom and two other companies to deploy FTTH broadband in Parkhurst. Vumatel expects to have provided FTTH to 100 suburbs in the next three years.

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