Openserve prioritises network modernisation

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 29 Jul 2019
Alphonzo Samuels, CEO of Openserve.
Alphonzo Samuels, CEO of Openserve.

Hurt by declining voice revenue, Telkom subsidiary Openserve is looking to modernise its network.

This emerged in Telkom’s integrated report for the year ended 31 March, published on Friday.

Openserve is the wholesale business unit of Telkom, and provides wholesale products and services to other licensed telecommunications service providers through an open access network.

Headed by Telkom veteran Alphonzo Samuels, Openserve competes against the likes of Vumatel, Vox and Seacom in the fibre space.

According to the report, Openserve contained the revenue decline at 3.3% to R16.9 million (FY2018: R17.5 million), despite voice revenue decreasing by 15.8%.

Telkom explains that the decline in voice revenue was caused by migrating customers from legacy to next-generation technologies, and lower call termination rates.

However, it notes the negative impact was partially offset by fixed data revenue growth of 7.3%, mainly due to next-generation fibre and Ethernet products, which grew by 40.3% to R1.2 million.

Fibre to the base station increased by 3.3% to 7 018 base stations as mobile operators expanded their networks.

The demand for Ethernet services from enterprise customers increased by 55.6% to 37 476 service connections.

“Our focus on homes connected to improve returns is being realised. The FTTH [fibre-to-the-home] connectivity rate increased from 30.7% in FY2018 to 38.4%, slightly below our target of 40%,” says Telkom.

It points out that Openserve upgraded the fibre broadband portfolio minimum access speed to 10Mbps to enable faster broadband access speed and increase data consumption. It also reduced the effective price on IPConnect by 9.1% by providing additional capacity to customers.

“This led to an increase of 11.6% on the average daily data usage for FTTH customers in the fourth quarter. This is in line with our commitment to bring down the cost to communicate.”

Telkom group CEO Sipho Maseko comments: “We are proactively moving customers from legacy copper which was installed since 1974 to new fibre technology and investigate ways to modernise our systems.

“We manage the pressure of the investment cost of deploying the fibre network, with the reduction in cable theft and reduced maintenance costs, improved social impact, better customer experience, and a stronger long-term positioning of the group.”

He notes the social and ethics and risk committees actively monitored matters related to customer service and customer complaints.

“Our newly-appointed group CIO [chief information officer] has the mandate to modernise all our systems’ applications and hardware, and review our processes to improve our overall customer experience,” says Maseko.

Telkom appointed Althon Beukes as group CIO in December.

The telecommunications company says its capital investment focuses on modernising the network, which will future-proof the core network and enable data growth across access, aggregation as well as core networks.

This is the foundation for software-defined networks and network function virtualisation capabilities, the company says.

“Our investment in the national fibre portfolio increased our footprint by 6 400km of fibre, with a total fibre network of 163 800km. 

“We are optimising our capital investment by redeploying next-generation broadband equipment from areas recently covered with fibre, to areas serviced with legacy broadband equipment.”