Friday, November 12, 2010

South Africa - FibreCo, a new operator, is to invest is a network linking major centres

[itweb] FibreCo Telecommunications, the country's newest fibre optic network will be an investment of more than R5bn by Cell C, Internet Solutions and Convergence Partners and will lay 12,000 kilometers of fibre starting next year.

Equity will be split roughly between the three investors and they are currently engaging in geo-surveys to determine cable-laying routes.

The build will be in three phases with the first being a rolling out of a 4,500 kilometer redundant core ring linking Gauteng, Cape Town and Durban to international cable landing stations within two years. This will cost between R1bn to R1.5bn.

Social fibre

As reported by ITWeb in August, the total investment will be around R5bn, but this could increase as the routes are finally selected, conditions such as weather and terrain are factored in, and then finally, the capacity of the cable.

Cell C CEO Lars Reichelt says it was his company that first mooted the idea and then got Internet Solutions and Convergence Partners involved.

"We are a very social company," he quips. "However, we looked at what this country needs and not just what Cell C needs. The real bottleneck is around national long distance networks. There is a lot of fibre coming into the country and this has to be transmitted through the country."

Reichelt says that while other companies, such as Telkom, have stated that they have made huge investments in their networks, especially for the 2010 Soccer World Cup, "... the reality is that these networks are not readily accessible."

Head = Broadband ratio

Convergence Partners chairman Andile Ngcaba says: "There is a ratio that for every 10 units of broadband coming into the country, about 100 units of domestic capacity is needed. Within a few years this country will be receiving 10 Tb/s of broadband and it needs to have that domestic capacity."

He points out that South Africa has already landed or expecting to land within the next two years a number of new undersea cables. These include Seacom and Eassy on the east coast, while on the west coast the building of the West African Cable System has begun and so have extensions to MainOne.

Ngcaba, who is chairman of Dimension Data South Africa and a former Department of Communications director general says the investment is part of an overall vision called "Africa Digital".

"Investments like this are needed to make Africa and South Africa part of the global digital economy," he says.

Different model

According to FibreCo's statement, Cell C's national wireless network will provide the platform for the co-location of optical transmission equipment at their base stations and wireless access solutions for FibreCo's customers.

It says through Internet Solutions, FibreCo has access to deep capabilities in the delivery of value-added networking solutions into the enterprise market, including facilities for the hosting of its customers' optical termination equipment in urban centres. Convergence Partners contributes development and financial structuring expertise.

FibreCo CEO Arif Hussein says the open-access network will be managed in a very different way from the prevailing business model.

"We will be allowing our customers to light their own fibre on the network and we will manage it for them. This will allow them to realise true economies of scale and so they would not have to just buy bundles of broadband as they do now," he says.

Reichelt says that other telecommunications operators will be allowed to join either as partners or to plug into the network.

FibreCo to set telecoms alight

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