According to research by African Bandwidth Maps, expansion of fibre networks has brought dozens of new towns, cities and countries within the reach of high capacity networks for the first time. In the last five years, over 150 million more Africans have become within reach of fibre networks.
This is only set to continue, with multiple businesses seeing the appeal in getting into the space. Cell C chief executive officer (CEO) Jose Dos Santos describes it as “fast growing and exciting”.
“We see FTTH becoming more accessible to many communities as new entrants roll fibre out in the form of open access networks. In other words they put the fibre down and allow multiple service providers to compete on service and diversified value,” he said.
Competition is on the rise. Telkom has South Africa’s largest fibre network, with 149,000km of fibre laid, providing access to 56,000 homes. Telkom is planning to provide 500,000 homes with fibre by December 2016. But other companies are increasingly entering the fray.
Telkom’s managing executive for group communication Jacqui O’Sullivan, who says her company welcomes the extra competition, knows why.
“Everyone’s getting excited about fibre broadband, and with good reason, as fibre networks currently offer the fastest and most reliable connection speeds,” she said.
“FTTH allows download speeds of up to 100Mbps, allowing you to download a standard definition 4.7GB video in under seven minutes. An entire music album can be downloaded in eight seconds. With a fibre connection, streaming music, movies and online games for multiple users is as easy as child’s play.”
It is not just in South Africa where companies are sensing the opportunities. David Eurin is chief strategy officer at Liquid Telecom, which has deployed FTTH networks in Kenya, Zimbabwe, Zambia, Rwanda and Uganda. Though FTTH only really got going as an industry two years ago, he says it has become big business.
“FTTH transforms the way internet is used in Africa. Mobile networks and satellite networks have much larger coverage but need to share the capacity between many customers. This in practice limits the customer experience to a few Mbps downloads and much worse uploads,” he said.
“FTTH offers up to 100Mbps upload and download service, and can be easily upgraded to 250Mbps each way. This opens the door to many applications, such as IPTV, video services, security services, WiFi offload, multi-Gibabyte game updates… It also has a faster response rate than wireless solutions.”
Content is the real winner
“There are many exciting opportunities in this space, but primary among them are content and multimedia services,” dos Santos said. “You can see similar trends rising in South Africa to those that have been developing internationally over the last few years. Companies like ShowMax and Netflix are just two examples of the potential content services that are now available in the South African market.”
Richard Boorman, head of communications at ShowMax, agrees.”From our point of view, it’s likely to be a major source of growth. We’re already seeing healthy usage based on mobile, fixed mobile and ADSL connectivity, but SVOD really comes into its own when FTTH is readily available,” he said.
“We’re finding that one of the key barriers to adoption of internet TV is concern over data costs. The rollout of FTTH presents another way to get around this concern over data costs as most of the packages are uncapped or at the very least offer a generous data allocation.”
There are still limitations, however. Eurin says FTTH requires heavy investment, and at this stage is only viable in the most affluent neighbourhoods of large cities.
“However, with economies of scale it can be expected to expand towards middle-class areas in medium sized towns in Africa,” he said.
Alan Knott-Craig Jr, who has started an FTTH business of his own in HeroTel, says delivery is key.
“With the exception of small players like VumaTel, no one is moving fast, so consumers are becoming frustrated,” he said.
“Cell C joining party simply drives up awareness and grows consumer demand. The question is whether they can deliver services as fast as they promise. The more players, the better for consumers.”
Source: IT Web Africa