The high cost of rolling out fibre to customers' premises is forcing MTN Network Solutions to consider each business's application on a case-by-case basis.
MTN Network Solutions CEO Mike Brierley says, while fibre will eventually help make vast quantities of bandwidth available to SA business very cheaply, the market is still in the initial stages where there is no economy of scale.
The company announced its FibreConnect offering last September, having rolled out fibre infrastructure in Sandton, Rosebank and parts of Randburg as part of the initial pilot phase.
MTN is also rolling out a 5 000km national fibre network that will cost the company up to R1.3 billion, enabling it to expand its fibre reach.
Fibre roll-out is a big capital cost, requiring the company to balance demand for the connectivity with the price of going to the customer's business, he says. "We have to consider the roll-out on a case-by-case business," he says.
Brierley would not state how many fibre customers MTN NS has signed since the launch of the offering. However, the company has seen some success with the offering, he says.
He adds that the price of fibre connectivity will go down as competition gets stronger between MTN, Vodacom, Telkom and Neotel in that space.
Fixed-line operator Telkom fired the first volley with its fibre offering, and MTN's offering is only the second round, he says. "We haven't seen the right price yet," he says.
Paradigm shift
Brierley notes that companies wishing to roll out fibre also have to be willing to invest heavily in the infrastructure. This means that they need to know well in advance what they will do with the bandwidth, he says.
"Fibre introduces a completely new paradigm to the market place, so companies have to rethink their IT strategy," he says.
The impact of the upcoming abundance of bandwidth will not be restricted to corporates only. iBurst head of product development Antony McKechnie recently noted that cheap bandwidth capacity that will come from the undersea cable projects will also force Internet service providers to change their business models.
Margins will be squeezed and ISPs will have to find other ways to generate revenues," he says.
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