By Graham Beneke, Technical Pre-Sales Specialist at Datacentrix and Chairman of the Internet Service Providers’ Association (ISPA)
Fibre optic technology could catapult the African internet economy into the future, in much the same way that the cellphone revolutionised communication on the continent in the early part of the century. In fact, market analysts, Ovum, predict that fibre connections to homes and businesses in Africa will grow strongly in the next few years – to pass the one million threshold in the year 2020.
Once laid, fibre promises speeds and distances that are orders-of-magnitude better than South Africa’s copper-based DSL technology which has, rather painstakingly, characterised the country’s internet journey to-date. Those lucky enough to have a fibre connection in their households enjoy incredible speeds, ultra high-definition video streaming, low-latency online gaming, and other benefits.
And, in the business context, the fibre that is being laid to office parks in major metros will enable next-generation digital business, advanced machine learning and artificial intelligence, cloud computing, enterprise mobility, big data, video conferencing, enhanced collaboration tools, and the like.
Unfortunately, for most companies, this exciting promise of fibre-powered digital transformation remains tantalisingly just out of reach. Reaching that one million connections mark within the next couple of years seems unlikely, at the current pace.
A few years ago, the biggest throttling point to local internet ambitions was the lack of international links. But now, we have a wealth of undersea cables – from Seacom, to EASSy, WACS, ACE, MaIN OnE, TEAMs, and LION. Awkwardly-named, but immensely powerful, these cables present a staggering array of backhaul options for local ISPs and network providers.
With the international bandwidth challenge now effectively solved, the irony is that a new local challenge has surfaced, “the economics of fibre”.
South Africa, like most African countries, suffers from some inherent problems when compared to some of its international peers. The market size of individuals and businesses is relatively low, when compared to the vast geographies in which we live and work.
Consider the sprawling low-density office campuses that continue to sprout between Johannesburg and Pretoria, or the new business hubs in Cape Town’s northernmost regions, for example. Contrast this with the tighter, taller office arrangements in the skylines of Tokyo or Manhattan, and the problem of density becomes apparent.
Simply put, the economics of fibre requires substantial users in the same area. It’s a physically resource-intensive process to dig up roads, divert traffic, and lay expensive fibre infrastructure.
Currently, not enough companies can justify the price of a new fibre installation. And, at the current demand, fibre providers can’t rationalise lowering their price. So we struggle on with our creaking DSL networks, in a chicken-and-egg dilemma, a market-failure of sorts, which may need government intervention to resolve.
The Australian government, for example, addressed the problems of fibre’s “initially unattractive” economics, with stimulus measures designed to get more fibre into the ground and into the office.
The local regulatory and municipal approvals frameworks need to change, to encourage the deployment of fibre into South Africa’s major business centres. Currently, signing a fibre contract, to actually seeing the results, can take anywhere from three to 12 months. As local companies increasingly compete head-on with powerful digital enterprises – the likes of Amazon, Netflix, and Google – this is far from an ideal scenario.
For now, fibre connections remain the preserve of affluent residential suburbs, and large corporates headquartered in higher-density business districts. It will take smart, enabling government policies to change the current “economics of fibre”, and speed up its roll-out into other areas.