Enabling through fibre
Fibre is the best thing since sliced bread in the layman's opinion; everyone wants it because there is an expectation that it is fast, says Laurie Fialkov, CEO at Cybersmart.
Gartner predicts that 20.8 billion devices will be connected to the internet by 2020. By comparison, in mid-2016, there were an estimated 6.4 billion connected devices in the world, says Juanita Clark, co-founder and CEO of the FTTH (fibre to the home) Council Africa. "Combine the number of devices, the pace at which it is growing and the applications it is being used for and you can easily see the need for more fibre in the network."
Yet, Clark notes, while companies are still ardently deploying fibre, only 130 000 homes have been passed. "So there are still many, many homes that need to be connected. There are still a few years of intense deployment ahead."
Despite this, Clark believes that South Africa will, in time, see widespread adoption - especially as Internet of Things-connected devices become readily available.
Abraham van der Merwe, co-founder and MD of Frogfoot Networks, estimates that by the end of 2018, the number of homes passed will exceed a million. He adds fibre deployments are currently focused on the larger metropolitan areas such as Cape Town, Johannesburg, Port Elizabeth, Durban, Bloemfontein and Pretoria.
Vox CEO Jacques du Toit says fibre, although having become cheaper, has historically been seen as a business service and not really a home service, even though globally that was the trend. This, he says, has been changing as more players come into the market. "It will definitely, over time, expand into other areas."
However, as Eckart Zollner, head of Business Development at NewTelco SA, a Jasco company, notes, the focus has shifted from laying new fibre to getting customers to buy into infrastructure that has been laid already so the investment can be justified.
Lehlohonolo Mokenela, industry analyst in the digital transformation practice at Frost & Sullivan, adds that uptake of fibre in South Africa has been mixed, with relatively more commitment from enterprises than consumers. "Despite the increase in bandwidth following the landing of undersea cables, operators in South Africa, like in other parts of the continent, are still struggling to extend fibre access to the wider population."
Fibre is referred to as an endgame technology, so the technological advances will come on either side of the actual fibre strand itself.Jacques du Toit, Vox
Du Toit adds that fibre is not a technology that is going to be replaced in the short term. "We can't predict it, but we don't believe it will be replaced for at least the next 20 to 30 years. Fibre is referred to as an endgame technology, so the technological advances will come on either side of the actual fibre strand itself. That fibre strand, theoretically, has a huge amount of capacity that should see us through for the next couple of decades. So it will become what people use for telecommunications, entertainment, browsing, just about everything that requires some sort of connectivity."
Yet, Zollner notes trans-country routes are still being built, and routes between the likes of East London to Port Elizabeth to Cape Town are still waiting for the promised fibre links. "Rural areas are seeing more of a focus on wireless than fibre and this is likely to remain the case, unless fibre is project-driven to support a large industrial or corporate operation. Fibre providers are also still building multiple trunk routes for resiliency."
Reshaad Sha, chief strategy officer at DFA, says fibre is capital-intensive and requires sufficient demand to reach a price point that is palatable to the market. Fialkov adds that because of the investment involved, it is going to be at least five years before fibre is available in most areas in South Africa at fibre-to-the-home pricing.
Kevin South, head of SEACOM Business, Channel, says ISPs and telcos are willing to invest in new fibre to the home and the business, but are being held back by slow municipal approvals to lay cable and the use of old technology and processes to put fibre in the ground.
5G needs fibre and lots of it.Juanita Clark, FTTH Council Africa
Yet, as Greg de Chasteauneuf, CTO at Saicom Voice Services, notes, although government must get involved, if you look at fibre deployment from a commercial perspective, it may be about finding an application that can become the enabler to cross-subsidise the cost of the fibre infrastructure. "For example, if communities are spending money on or will be spending money on an application that requires fibre, it may be a viable reason to enable connectivity in those areas."
Clark says there are a few topics that are making people talk, and sometimes scratch their heads. "Right now, the conversation around the Internet of Things is really taking off, and mostly revolves around increased machine-to-machine communication, software-defined networks and 5G," she says. "5G needs fibre and lots of it. This is because it's not just your phone and your computer anymore that wants to connect to networks. Home appliances, door locks, security cameras, cars, wearables, pet collars, and so many other inert devices are beginning to connect to the web. It all comes back to the IoT."
Dial-a-Nerd MD Aaron Thornton believes fibre is revolutionising what is possible for people in their homes and small businesses. "On the home front, one is now able to monitor systems, staff and family from remote locations because of a much faster connectivity solution through connected cameras."
Clark says consumers mostly use fibre for good internet connectivity, although the gaming industry is also growing rapidly. Streaming is rising as consumers can watch what they want, when they want, while online shopping is growing rapidly as it provides people with the ability to shop at any time - even late at night, she adds.
Says Thornton: "A year or two ago, maybe one parent would have had an iPad that gets shared around the family...but now with fibre and a fast connection, everyone in the family is on their phones reading the news, updating a blog or chatting on Facebook. In addition, there are likely multiple other mobile devices on the home WiFi, and now TVs, DStv and gaming consoles are all being added too.
"The average home connected to fibre these days can have up to ten or even 15 devices connected quite easily and this will continue to grow as manufacturers add internet functions to their devices to add to the user's overall experience."
The business case
Added to this is the fact that online learning and telecommuting is also increasing, Clark says. Adds Van der Merwe: "With high-speed fibre, we've now also seen that the work-from-home concept is a reality and an increasing number of businesses are allowing more flexibility for their workforce."
However, Du Toit says there are a myriad other uses that have not even been conceptualised yet. "The capacity that is going to be available will give rise to new technology. Overnight, new technologies can pop up and drive uptake in usage. The technology itself will become more universal than any other fixed connectivity option. Availability will drive innovation and solutions enabled through fibre."
The point is if your company is not in the tech space you should not exclude the fibre boom as a growth opportunity.Laurie Fialkov
Zollner notes a stand-out trend that his company is seeing is that consumers have more choice available to them from service providers than ever before. "The range of services is expanding exponentially, driven by demand and more capacity. The applications environment is also opening consumers up to more providers, more innovation and better pricing than previously known."
Clark says the uptake of fibre means self-service will become more prevalent as it allows consumers to do business at any time of day - outside of normal hours. "Just consider the banking world. Who can really remember the last time they stood in a bank?"
Van der Merwe believes that businesses will increasingly move from selling standalone products deployed at each customer to centralised services and rely on scale and micro-billing to drive revenues.
Zollner adds that vendors and service providers need to meet the demands of the new market. "Telephony is moving into the instant messaging (IM) space, social media is being adapted to fit business requirements and interactive mobile platforms are being offered as part of business services. The cloud is becoming more prevalent as the availability and reliability of fibre networks allow them to downscale in-house infrastructure and leverage X-as-a-service platforms in their stead.
"Vendors and service providers, telephony or not, are going to need to adapt to the new way in which people are choosing to engage, or they may be left behind as more agile players leapfrog them."
As new business models emerge, enabled by fibre-based high-speed connectivity, she says businesses that do not drive their own digital transformation will be left behind
Thornton adds one benefit of FTTH is when consumers need IT support. "As much as 80% of the desktop and server support we currently offer is completely remote, meaning we never need to delay our service to our customers and are working from our office."
There will be a significant decrease in on-site IT support staff, says Fialkov. "The cloud brings a host of Software-as-a-Service opportunities."
Fialkov notes there will be a five-year run of business supporting fibre, such as fibre import companies, fibre support companies, and fibre design companies.
Fibre encompasses a large number of industries, says Fialkov. Industries it affects include labour, construction, materials, import, engineering and design - as all these sectors are involved in the value chain when it comes to laying the cable, he says.
"The point is, if your company is not in the tech space, you should not exclude the fibre boom as a growth opportunity. You do not need to be a cloud service provider to leverage off opportunities as a result of fibre."
Du Toit adds fibre is the true fourth utility after water, power and municipal services. "It is that important to households going forward."
What's driving FTTH growth
1 - Landing of several undersea cables - Prior to the arrival of the SEACOM, WACS, EASSy and MainOne cables in South Africa, the bulk of international telecom traffic was transmitted through the SAT3 cable, which was exclusively controlled by Telkom. The cables not only increased connectivity, they also created competition, resulting in prices plummeting.
2 - Landmark court case - In late 2008, Altech, then under the leadership of Craig Venter, won a court case against the Communication Department. Altech argued that under new telecom legislation, companies had the right to roll out their own networks, but the state insisted that they had to depend on Telkom's infrastructure ? government holds 40% of Telkom. Altech's victory opened the door for FTTH to start rolling out its own networks.
3 - Broadband price war - In 2012, MWeb took the unusual step of pushing through steep cuts in its uncapped ADSL products. It wanted to get its consumers to no longer treat broadband as a scarce resource. It got its wish. This move prompted its rivals to lower prices and led to consumers demanding (and being able to afford) more bandwidth-intensive services like Showmax and Netflix.
4 - New technologies - A combination of new tech ? cloud computing, a growing number of cheaper, powerful smart devices and the establishment of neutral datacentres ? has also played a part in driving growth. The smart devices enable consumers to do sophisticated, data-intensive tasks, the cloud makes better use of storage and the neutral datacentres like those set up by Teraco provide a place for companies to exchange data.
5 - Lack of investment in fibre - A shortage of fibre is one of the main reasons FTTH companies are finding strong demand for their service. Prior to their arrival, consumers had to depend on Telkom's ADSL infrastructure, which is limited, to get access to high-speed data services.
This article was first published in the June 2017 edition of ITWeb Brainstorm magazine. To read more, go to the Brainstorm website.