Subscribe

Fibre: SA's unfulfilled promise

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 27 Jan 2015
Vodacom expects to reach about 150 000 homes and 100 000 business with fibre, within the next three years.
Vodacom expects to reach about 150 000 homes and 100 000 business with fibre, within the next three years.

Video-on-demand, smart homes and the Internet of things are all pushing the need for fibre in SA, but the outlook - despite much noise and tentative moves over the past - remains apathetic in 2015.

While hopes ran high last year amid what seemed to be a flurry of activity on the fibre front, the promise of a fibre nation was left far from fulfilled. And industry watchers say this year does not look much more promising.

Yesterday, Alcatel-Lucent announced it would work with SA's largest mobile operator Vodacom to create a nationwide "converged" fibre network. The operator plans to deploy fibre-to-the-premises in SA's four major centres - Johannesburg, Pretoria, Durban and Cape Town - and aims to connect 250 000 homes and businesses within the next three years.

Vodacom started planning an extensive fibre foray from as far back as 2013, at least. The company's CEO, Shameel Joosub, said in a video message in December 2013 that Vodacom was going to start building fibre to the home and business, and "really start trying to play a bigger role in the fixed space".

MTN and Telkom also announced plans and started making inroads on the fibre front last year, although 2014 did not see the progress many expected to see coming from this.

Slow and steady

BMI-TechKnowledge director Brian Neilson says fibre is a big wildcard in SA at present. "Everyone is keen to get in on the game if it does take off as rapidly as indicated - or at least, hoped. One would need a diverse range of estimates of how quickly that will be, based both on rollout rate and on actual consumer uptake."

Part of why Neilson thinks it is such an unpredictable game, he says, is that VDSL, and even ADSL or LTE for many consumers, is "good enough". He says it is important to note that Neotel and Vodacom - which are hoping for a greenlight from authorities around a proposed buyout deal - can provide LTE as well.

"However, the fibre prices are very attractive - including those from Internet service providers like Web Africa and Vox - so there is a large potential for massive adoption, particularly customers who do not have a good experience with DSL, or those who cannot even get a copper line for love or money."

As an example of cost, Vodacom now offers a 10Mbps Broadband Connect service plan (10Mbps downstream, 5Mbps upstream) for R2 336 per month on a 12-month contract.

ICT veteran Adrian Schofield says 2015 will see a steady increase in the number of consumer and business fibre connections, but it will not reach "tidal wave proportions", due to certain constraints.

"The reality of rolling out cable networks is that it is relatively quick to lay down the backbone to connect the major centres, but the last mile connections are going to take a relatively long time to reach critical mass. The reality is also that the operators will seek the economies of scale, laying connections to high worth, high density residential and business areas."

Ovum analyst Richard Hurst is not much more hopeful. He says SA will only see "some movement" in terms of fibre for consumers and businesses this year. "I expect that - as we saw in 2014 - the same will be [seen] in 2015, with some slight rises in consumer and enterprise connections and services."

The Neotel factor

Joosub previously said Vodacom's big fibre plans hinged largely on its proposed R7 billion buyout of second network operator Neotel being approved. In November, he said the company wanted to try take on Telkom in the fibre arena, to become an alternative fixed-line option - arguing that, however, it would need Neotel's fibre base before it could tackle the incumbent in any meaningful way.

Based on the numbers Vodacom is talking and if the Neotel deal gets okayed, Neilson says it could very well happen that Vodacom steals a march on Telkom in the residential sector, as the company has deep pockets and generally does what it says it will do.

Hurst says fibre-to-the-premises is not as much about winning a battle as it is about the fact that the realisation of Vodacom's plans would mean the injection of some much-needed competition in the fixed-line broadband space - "something that consumers have been waiting and hoping for since the licensing of Neotel".

Schofield says, since Neotel is the second fixed-line operator - "in name if not in fact" - acquiring the company would make Vodacom the de facto alternative.

Share