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MTN goes open access for FTTH

Martin Czernowalow
By Martin Czernowalow, Contributor.
Johannesburg, 17 Jul 2015

Correction

We incorrectly reported that Telkom is not offering open access FTTH.

Telkom Wholesale is in fact offering FTTH access (called Wholesale Fibre Broadband Access) on an open access basis. More details here.

We apologise for the error.

Mobile operator MTN SA says it is committed to an open access business model to provide customers and independent Internet service providers (ISPs) - utilising its fibre-to-the-home (FTTH) network - with flexibility and a "seamless and distinct" customer experience.

The company is deploying this high-speed fibre network in suburbs across the country, and has appointed a team of specialists to focus on the wholesale offering and to begin discussions with all interested service providers. It plans to have a wholesale product ready by the middle of next month.

While Vodacom and Telkom have also recently announced large FTTH deployments around major metropolitan areas in SA, neither company has chosen to go the open access route, and this is what could give MTN a competitive advantage, according to market watchers.

MTN notes an open access network is a flexible platform that will allow any ISP with a valid electronic communications services licence, and which has signed an agreement with MTN, to integrate the services they provide to end-users. This, in turn, will enable a range of service providers to provide their customers with connectivity services via the MTN network.

"The key advantage of an open access network is that residents will have multiple options, and MTN will be holding discussions with a number of ISPs in order to provide its customers with a wider selection," says MTN SA chief technology officer Eben Albertyn.

"Such is our focus on creating an enabling environment to promote cost-efficient and flexible Internet services, that we will have a wholesale commercial product offering for interested fibre-to-the-home Internet service providers by mid-August," says Albertyn.

MTN has already deployed FTTH to the gated community of Monaghan Farm, outside of Johannesburg, and is trenching in a number of suburbs, including Parkmore, Morningside and Lonehill, where it is deploying FTTH in partnership with the respective residents' associations.

"MTN is focused on providing all South Africans with the means to benefit from the digital way of life. This ensures service providers can focus on more tailored and cost-effective solutions instead of worrying about providing the infrastructure for such a connected experience," says Albertyn.

Gaining an edge

MTN says it will have a wholesale FTTH product ready by the middle of next month.
MTN says it will have a wholesale FTTH product ready by the middle of next month.

ICT commentator Adrian Schofield says the move will position MTN as a wholesaler, in competition with the likes of Telkom and Neotel, and points out this could mean a significant competitive advantage for the company over its mobile rivals.

"For the foreseeable future, fibre is the better option than hoping for LTE, because there is no spectrum."

Schofield points out the move makes sense, especially in terms of fibre deployment in upmarket residential areas and office developments. "It makes a lot of sense, if you can capture that whole level of the fibre market and leave the nuts and bolts and accounting in the hands of an ISP that will be doing the last mile rollout."

He says a more cynical perspective would be that this also positions MTN to potentially move into the retail market, by eventually taking over ISPs that are providing last mile connectivity.

Dobek Pater, analyst at Africa Analysis, says the move into the wholesale space could potentially be lucrative for MTN, especially in the local market where telecoms operators need to diversify their revenue streams.

"It is certainly another potential revenue stream for MTN, which will allow the company to supplement its earnings," he says. Pater adds Telkom is a good example of this, as it earns about 40% of its revenue from the retail market and 60% from wholesale.

Pater says MTN's move into the FTTH open access network space would also allow it to compete with other access technologies, such as ADSL and LTE, which are increasingly being deployed in residential areas.

"This is a good move. Rather than try to preclude others from deploying their technologies in an area, MTN can try and generate wholesale revenue by letting other people come onto its network."

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