STEVEN BOOY­SEN’S RACE TO GET FI­BRE INTO HOMES

The fi­bre land grab is well un­der­way, and for­mer ca­reer banker, Steve Booy­sen, is in the race to get fi­bre rolled out to ur­ban South Africans with his com­pany Metrofi­bre Net­worx. It is a David-and-Go­liath sce­nario in the fi­bre-to-home mar­ket, as Metrofibr

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“Our size al­lows us to be ag­ile and make fast de­ci­sions, which en­ables

us to quickly adapt to cus­tomer re­quire­ments.”

march 2016 was a heck of a month for banker-turned-telecommunications en­tre­pre­neur, Steve Booy­sen. Bil­lion­aire Pa­trice Mot­sepe has backed Booy­sen’s Metrofi­bre Net­worx to the tune of R220m. The deal rep­re­sents an 18.14% stake for Mot­sepe’s African Rain­bow Cap­i­tal (ARC) in the fi­bre net­work and in­fra­struc­ture provider.

“We are cur­rently in the process of rais­ing R400m ad­di­tional cap­i­tal to grow the busi­ness,” Booy­sen ex­plains, adding: “The African Rain­bow Cap­i­tal in­vest­ment is part of that cap­i­tal-rais­ing process. We still need to raise a fur­ther R180m to com­plete the cap­i­tal raise – any in­ter­ested in­vestors are wel­come to con­tact me,” he says, not wast­ing any op­por­tu­ni­ties to make his pitch.

The in­vest­ment is re­quired for Metrofi­bre Net­worx to ex­pand its net­work foot­print, up­grade the ca­pac­ity of the net­work and im­prove the lev­els of ser­vice to its cus­tomers. The com­pany also en­joys ac­tive share­hold­ing from San­lam Pri­vate Equity (SPE), which has rep­re­sen­ta­tion on the Metrofi­bre Net­worx board. SPE in­vested in the fi­bre com­pany in 2013 to grow its own fi­bre net­work, mark­ing the first in­vest­ment of this na­ture for SPE.

When asked how one goes about ne­go­ti­at­ing a deal of this mag­ni­tude, Booy­sen ex­plains that he sticks to ba­sics: “I don’t sub­scribe to op­por­tunis­tic ap­proaches,” he says, “but rather work from il­lus­trated value, backed by a pru­dent busi­ness case, busi­ness model and a man­age­ment team that sub­scribes to, and lives by, a sound value sys­tem.”

Metrofi­bre is a smaller and rel­a­tively newer player in the in­dus­try, com­pared with the pi­o­neers like Vu­ma­tel, the com­pany that launched the first fi­bre neigh­bour­hood in Parkhurst, Jo­han­nes­burg. This gives the com­pany an ad­van­tage, ex­plains Booy­sen, be­cause it is able to build on newer car­ri­er­grade eth­er­net tech­nol­ogy, with­out hav­ing to worry about in­ter­fac­ing with legacy tech­nol­ogy. “Our size al­lows us to be ag­ile and make fast de­ci­sions, which en­ables us to quickly adapt to cus­tomer re­quire­ments,” adds Booy­sen. “We are an open-ac­cess part­ner, al­low­ing other par­tic­i­pants in the mar­ket to com­pete for the cus­tomers’ busi­ness. Con­sol­i­da­tion in the sec­tor is in­evitable and that will re­sult in op­por­tu­ni­ties for cor­po­rate ac­tiv­ity.”

Con­sumers crave faster in­ter­net

As busi­nesses in­crease their re­liance on cloud ser­vices, and with pri­vate con­sumers ea­ger to ex­plore the pos­si­bil­i­ties of video stream­ing, the de­mand for bet­ter band­width and more re­li­able con­nec­tiv­ity has sky­rock­eted. Fi­bre pro­vides a cost-ef­fec­tive step up from ADSL

for such con­sumers.

Fi­bre-to-the-home (FTTH) al­lows con­sumers to ac­cess IP tele­phony and video­con­fer­enc­ing (via Skype, for ex­am­ple) ser­vices as well as al­low­ing them to use high­qual­ity video stream­ing of en­ter­tain­ment ser­vices like Net­flix and Show­max with ease.

Busi­nesses, on the other hand, look to fi­bre so that they can cost-ef­fec­tively im­ple­ment cloud-based so­lu­tions, en­gage a dis­trib­uted work­force or part­ner net­work with­out leav­ing the of­fice, or re­duce tele­phony costs.

Telkom has am­bi­tious plans to pro­vide ac­cess to half a mil­lion homes by the end of 2016, a fig­ure de­scribed as un­re­al­is­tic by in­dus­try pun­dit Arthur Gold­stuck of World

Wide Worx. Nonethe­less, home­own­ers in Jo­han­nes­burg’s “mink and ma­nure” sub­urbs (read Sand­ton and sur­rounds), have been sign­ing up for fi­bre-based in­ter­net in their thou­sands.

Metrofi­bre Net­worx is one of sev­eral com­pa­nies cur­rently dig­ging up the side­walks and lay­ing brightly coloured ca­bles in the coun­try’s main cen­tres. The com­pany, in which Booy­sen has a solid per­sonal stake, owns and man­ages SA’s first glob­ally com­pli­ant Car­rier Eth­er­net 2.0 (CE 2.0) open-ac­cess fi­bre net­work. CE 2.0 is a next-gen­er­a­tion net­work pro­to­col that pro­vides im­proved ac­cess, scal­a­bil­ity and re­li­a­bil­ity.

Tele­coms is an im­por­tant sec­tor, Booy­sen points out: “Tele­coms is recog­nised as the fourth util­ity af­ter roads, wa­ter and elec­tric­ity (energy). Fi­bre con­nec­tiv­ity is in its in­fancy and the mar­ket will ex­pand ex­po­nen­tially in the next five to seven years, re­sult­ing in count­less busi­ness op­por­tu­ni­ties. It is a fast-paced, ever-chang­ing en­vi­ron­ment. The FTTH ex­plo­sion is an ex­cit­ing space to be in.”

What does the fu­ture hold?

Look­ing to the fu­ture, Booy­sen sees a com­mu­ni­ca­tions in­dus­try that will re­main in flux for some time. “The in­dus­try pulls to­gether an enor­mous num­ber of sup­pli­ers and con­sumers at the fore­front of tech­nol­ogy devel­op­ment, which opens in­no­va­tion at an un­pre­dictable, al­most ex­plo­sive man­ner,” he says, adding: “Gone are music stores, book shops and a num­ber of other sec­tors are strug­gling to rein­vent them­selves [and de­velop] new sus­tain­able busi­ness mod­els.”

Booy­sen warns that con­ges­tion of the wire­less spec­trum, es­pe­cially the fre­quen­cies that al­low for mo­bile ac­cess, is go­ing to place more de­mands on the fixed-line sys­tem – also known as the back­haul. And while the on­go­ing ad­vances in fi­bre tech­nol­ogy im­prove the per­for­mance of net­works, the growth in band­width de­mand is go­ing to out­strip the avail­able in­fra­struc­ture. “Band­width, specif­i­cally to homes, will grow ex­po­nen­tially over the next five to seven years. This growth will be driven by new ap­pli­ca­tions still not known yet – an ex­cit­ing prospect,” Booy­sen adds.

Tech­nol­ogy, he be­lieves, is “the sin­gle big­gest lever­age point to turn the suc­cess of a coun­try”. He con­tin­ues: “The hope is there­fore, that lo­cal gov­ern­ment will em­brace fi­bre op­tic roll-out pro­grammes, which will re­sult in eco­nomic and so­cial well-be­ing for their res­i­dents and en­trepreneurs. A fi­bre­con­nected com­mu­nity has the po­ten­tial to en­able the ef­fi­cient and cost-ef­fec­tive de­liv­ery of ser­vices such as health, ed­u­ca­tion and so­cial up­lift­ment.”

Like most suc­cess­ful en­trepreneurs, Booy­sen has had sev­eral men­tors who in­flu­enced him. “I had four men­tors dur­ing my life­time,” he says, adding: “The first one taught me dis­ci­pline, hard work and that com­mit­ment will stand you in good stead. The sec­ond one taught me to lis­ten to fel­low col­leagues be­cause it will en­able you to take more in­formed de­ci­sions to the ben­e­fit of the or­gan­i­sa­tion. The third one taught me to be­lieve in your­self, be un­con­ven­tional and let peo­ple un­der­es­ti­mate you at their peril. The last one taught me to stick to your prin­ci­ples no mat­ter what, live your val­ues and to be hum­ble about your achieve­ments.”

Ask the banker-turned-en­tre­pre­neur for the great­est lead­er­ship les­son he has learned, and he shares the fol­low­ing: “You never stop learn­ing. De­ci­sion-mak­ers will al­ways make mis­takes – the im­por­tant les­son is not to re­peat them; take swift cor­rec­tive ac­tion and move on. When tak­ing de­ci­sions, lever­age the wis­dom at your dis­posal – of­ten your lead­er­ship team, col­leagues and men­tors.”

“The in­dus­try pulls to­gether an enor­mous num­ber of sup­pli­ers and con­sumers at the fore­front of tech­nol­ogy devel­op­ment, which opens in­no­va­tion at an un­pre­dictable, al­most ex­plo­sive man­ner.”

Pa­trice Mot­sepe Bil­lion­aire busi­ness­man

Arthur Gold­stuck World Wide Worx

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