National SA broadband roll-out to cost a fortune

2016-03-31 09:23 - Duncan Alfreds, Fin24
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Broadband. (Duncan Alfreds, Fin24)


Cape Town - South Africa's national fibre broadband roll-out could cost as much as R60bn, according to an international provider.

Government has a stated goal of universal broadband by 2020. However, much of the existing copper infrastructure is unsuitable for high speed services such as high definition video streaming.

The cost for replacing all the copper infrastructure is astronomical.

“If we were to replace all five million copper lines with fibre, it would cost about R60bn. This cost will have to be incurred by the likes of Telkom, Neotel, Vodacom, MTN, Vumatel, DFA and the like,” Suveer Ramdhani, chief data officer at Seacom told Fin24.

Seacom manages the submarine fibre broadband cable that links SA with Europe.

Wealthy areas

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Deputy minister of the department of telecommunications and postal services, Professor Hlengiwe Mkhize, said recently that the first phase of SA Connect would see delivery of around 180 000km of fibre broadband.

Ramdhani said that in SA, about 160 000km has already been developed, but a key challenge remained.

“This fibre, however, is only productive if it connects a significant number of end users to the internet, and that is where the challenge lies.”

A number of fibre broadband players have launched initiatives to deliver services to mainly wealthier suburbs in major centres.

Ramdhani argued that scale of connectivity would result in poorer areas receiving access “soon”.

“Networks grow like the roots of a tree, so it’s only a matter of time before those areas also have access. With each suburb connected, it becomes cheaper to connect the neighbouring suburb and so on. I think it will happen sooner than most people realise.”

Telkom has been identified as the “lead agency” for government broadband roll-out, though officials have not dismissed partnerships with other private sector companies.

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Ramdhani said Seacom is watching the market closely for collaborations that tend to happen once the market reaches a saturation point.

“There is a tremendous underserved market of connecting end-users, so companies naturally tend to collaborate by not building in the same areas. Unfortunately, this tends to happen only after the initial excitement and mad rush to market settles. Thereafter, operators tend to collaborate by sharing long distance and national networks.”

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