My Small Business 18.1.2016 01:36 pm

Fibre is firing in Jozi

Fibre optic cables | AFP PHOTO

Fibre optic cables | AFP PHOTO

Proliferation of fibre to the home in Johannesburg to grow in 2016.

The uptake of fibre to the home (FTTH) in Johannesburg is proof that the days of 4 megabyte per second (Mbps) ADSL connections are numbered. Telkom, which had rolled out fibre to 38 000 households by August 2015, has committed to raising that number to 500 000 by December this year and to one million homes by 2018.

There are, however, still many suburbs in Johannesburg that are not within Telkom’s immediate plans.

FTTH currently allows for download speeds of up to 100 Mbps, allowing for the download of a standard definition 4.7 GB video in less than seven minutes and a full music album in eight seconds. Unlike ADSL, fibre speed does not have an ‘up-to’ qualification. It guarantees you the maximum speed.

Vumatel CEO Niel Schoeman says it would cost tens of billions of rands to bring fibre into every suburb in Johannesburg but more companies that install the infrastructure continue to enter the space, going into areas where Telkom has delayed or overlooked. Vodacom and MTN SA both have a FTTH division, while Cell C plans to launch its own offering this quarter. MTN alone spent R3 billion on the rollout of national fibre in the year ended September 2015 and, according to MTN’s acting chief technology officer Sidney Arnold, more investment is anticipated for 2016.

“The number of suburbs with a fibre connection equates to 26% of the suburbs in Johannesburg,” says Arnold, “and the range of the fibre network is more than 2 000 kilometres.”

Telkom’s fibre footprint for central Johannesburg

Telkom Fibre Map

 

 

 

 

 

 

 

 

 

 

 

Screen Shot 2016-01-17 at 10.45.53 PM

 

 

Source: Telkom

Behind Telkom, DFA has the largest fibre footprint in SA, leasing its networks to a wide range of internet and telecommunications providers, and has shown that owning a fibre network is good business.

All the internet service providers (ISP), including the likes of MWEB and WebAfrica, pay rent to companies likes of DFA in order to offer fibre to their customers. The customer is not obligated to have a contract with the infrastructure developer, so it is also convenient for them. Meanwhile, Vumatel has rolled out fibre to 18 Gauteng suburbs and plans to surpass the 100 000 homes mark this year.

Price-wise the charges vary. There is a once-off connection fee, which ranges from R1 500 upwards and monthly fees are thereabout but vary depending on the package and your chosen ISP. Metrofibre Networx head of FTTH Jacques de Villiers, says its cheapest uncapped line, which is for a 10 Mbps line, costs about R1 050 per month.

“Our capped equivalent goes for about R550. That’s for a 10 Mbps line, capped at 20 gigabytes,” says De Villiers.

This is a lot cheaper than the amounts bandied around this time last year. Juanita Clark, CEO of the FTTH Council Africa, says this is because fibre is becoming cheaper as companies share their infrastructure and spend less money on ‘deployment’.

Getting fibre in your area

“Unfortunately deployment of fibre is a slow process and it takes time,” Clark notes. “By the time a company breaks ground they have already made a massive investment.”

That is why companies need to conduct feasibility studies based on confirmed orders from people within the area before they can begin with the infrastructure rollout. The cost is not in the fibre itself, but in the digging up of trenches in which the fibre cables are laid.

De Villiers says it costs R400 per metre of fibre cable, and that is without the equipment at the front and back of the connection (i.e. the server and the router on the customer side). He says that depending on the distance from an existing fibre network and the size of the area that needs to be covered, they could need an initial commitment of up to 40% of all the residents in order to go ahead with a project.

Says De Villiers: “You get the early adopters, who as soon as we approach them ask where they can sign. They can’t wait to get fibre. Then there are others who wait for something to happen, so when they see us digging up the roads and pavement, then they sign up. Others will wait and see until their neighbours tell them how well it’s working. The last category is made up of those people who have ADSL contracts with various service providers that they can’t get out of, so they don’t sign.”

Even though the company is owned by Sanlam, De Villiers says raising capital remains the biggest obstacle to the business model for fibre, which is why most of the uptake has been in affluent areas.

“Ninety percent of the technology that is used is imported, so you can imagine what impact the rand has had on fibre businesses. We have approved projects for R160 million and we’re already doing a capital raise for R500 million.”

A matter of organising

That said, there are still many areas, like Fourways for example, that do not have fibre. De Villiers says this is because of the costs involved and perhaps a perception of limited affordability.

“If you have a young couple who have bought a home for say R700 000, you aren’t necessarily going to be able to afford an extra R1 000 or so monthly for internet,” says De Villiers.

Nevertheless it is always possible as long as the residents and business owners in an area can come together. The Melville area has one such community, which will be getting fibre through Vumatel this year.

If you live in a sectional title unit or an estate, speak to your body corporate and get assessments and quotes from various providers and choose the company best suited in terms of how it will affect the levy structure. For standalone homeowners, it is best to get in touch with the resident’s association in your community and find out what progress they have made because chances are, they are already considering it. Communities should register their wish to become a FTTH community atwww.ftthcouncilafrica.com.

Residents should be aware that, even though fibre could offer many benefits, there are pitfalls. There have been many reports of water and electricity services being disrupted when the cable network is being laid in various areas. Other companies, like Fibrehood, have an aerial solution, where fibre is strung on poles on both sides of the road, but these can be an eyesore.

Says Schoeman: “Although the rollout can be disruptive, we are only in each community for about two months and take as much care as possible with the residents to minimise disruption. The long-term benefits of this future-proof technology far outweigh the initial disruption in the rollout… The central suburbs of Johannesburg should all have fibre infrastructure within the next two years.”

To find out whether you are already able to get fibre, click here.

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