Build your own Telkom

The fu­ture of tele­coms is pri­vate

Finweek English Edition - - Communication & Technology - BENE­DICT KELLY

IR­RE­SPEC­TIVE OF HOW MUCH fi­bre op­tic ca­ble ca­pac­ity the likes of Telkom, Neo­tel, MTN and Vo­da­com put into the ground, the fi­nal link to the homes of the pub­lic at large – called the last mile – will con­tinue to dic­tate what elec­tronic ser­vices they’re able to re­ceive.

There are cur­rently two op­tions in pro­vid­ing broad­band to res­i­den­tial prop­er­ties: wireless con­nec­tions (from cel­lu­lar op­er­a­tors iBurst and Neo­tel) or wired con­nec­tions from Telkom.

How­ever, for a small group of gated com­mu­ni­ties, lib­er­a­tion from those ser­vices has al­ready hap­pened. A num­ber of com­pa­nies are work­ing to­gether with de­vel­op­ers to wire new de­vel­op­ments, ef­fec­tively elim­i­nat­ing the need for any unit in the com­plex to ap­ply for a Telkom line.

Put an­other way, one of the big losers will be Telkom, which will lose the strate­gic ad­van­tage of own­ing the last mile in some of its most lu­cra­tive res­i­den­tial mar­kets. Once the com­plexes are wired up, it’s pos­si­ble to de­liver phone, tele­vi­sion and se­cu­rity ser­vices via a sin­gle ca­ble, avoid­ing the blight of hun­dreds of satel­lite dishes pop­ping up around the es­tate. Ger­hard Loots, CEO of Atec Sys­tems, says rolling out the last mile is the most ex­pen­sive part of pro­vid­ing tele­coms. By de­liv­er­ing ser­vices over a pri­vate net­work, the com­mu­nity ef­fec­tively takes own­er­ship of that part of the net­work, rel­e­gat­ing the tel­cos to the pro­vi­sion of band­width.

Loots says that’s hap­pened be­cause Telkom has sim­ply been un­able to roll out new con­nec­tions to large hous­ing de­vel­op­ments, leav­ing cus­tomers to re­sort to wireless In­ter­net ser­vices to ob­tain con­nec­tiv­ity.

Arthur Gold­stuck, di­rec­tor of re­search house World Wide Worx, says link­ing con­sumers via fi­bre op­tic is the only way for­ward. “Nei­ther cop­per nor wireless tech­nolo­gies have the ca­pac­ity to de­liver IPTV and video on de­mand ser­vices. You can’t wire a whole city like that but it’s pos­si­ble for sub­urbs and com­mu­ni­ties to build their own net­works.” How­ever, much of that hinges on the abil­ity of value added net­work ser­vice providers (Vans) to self-pro­vide in­fra­struc­ture. While in­side gated es­tates de­vel­op­ers and oc­cu­pants have the free­dom to do what­ever they like, in tra­di­tional sub­urbs res­i­dents would need to find a com­pany with the le­gal right to pro­vide tele­coms in­fra­struc­ture to of­fer such ser­vices.

With the rul­ing by the Pre­to­ria High Court – which ef­fec­tively al­lowed all hold­ers of Vans li­cences to build their own in­fra­struc­ture – that could be one of lit­er­ally hun­dreds of cur­rent Vans li­censees. But if the Min­is­ter of Com­mu­ni­ca­tions suc­cess­fully ap­peals the rul­ing, there will only be a lim­ited num­ber of com­pa­nies with the right to of­fer such a ser­vice.

It’s pos­si­ble for sub­urbs and com­mu­ni­ties to build

their own net­works.

Al­though still in its in­fancy, Loots ex­pects to con­nect around 60 000 users over the next three years, up from 2 500 cur­rently.

Con­cur­rently, both Vo­da­com and Mul­ti­Choice have en­tered the fray: Vo­da­com with the ac­qui­si­tion of a gated com­mu­nity divi­sion from In­ter­net So­lu­tions and (more re­cently) Mul­ti­Choice, with the ac­qui­si­tion of Smart Vil­lage.

Gold­stuck pre­dicts over the next 10 years this tech­nol­ogy will be stan­dard in all mid- to high-level de­vel­op­ments and many sub­urbs will have de­ployed it.

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