CraigPark Residents Association (CRA) chairman Ryan Roseveare says its project will cover about 2 500 homes at a total cost of R4.7 million through aerial fibre (about a tenth of the cost of what trenching would have cost). He notes the initiative has generated "huge interest" from other associations that are tired of waiting for telcos to put fibre in the ground.
Schoeman notes between 10 and 20 other homeowners' associations have engaged the company to "some degree" and residents are "inundating" the company for a similar service.
· Parkhurst starts trenching FTTH
· Thumbs-up for Parkhurst FTTH
· Craighall Park readies for FTTH
Residential demand for more data, faster, and at cheaper prices, comes at a time when several of SA's telcos are also gearing up to deliver their fibre offerings.
Slow off the ground
Telkom has already announced it will deploy fibre to 20 suburbs in Johannesburg, Pretoria, Cape Town and Johannesburg by the end of the calendar year. Vodacom and MTN also plan to put down more fibre in a bid to connect additional homes and businesses in the fixed space. Yet, Vodacom's ambitions to take fibre connectivity en masse to businesses and homes hinges on it being successful in its bid to buy Neotel, for which it has bid R7 billion.
MTN's fibre offering, an "aggressive deployment", will initially be offered to high-density urban areas, like upmarket gated communities, boomed-off suburbs and high-rise buildings.
However, independent telecoms analyst Samantha Perry notes the telcos are likely still working on a viable business model that allows for returns, and will not harm the core company. She explains it costs around R25 000 per installation point for the telcos, and they need between 40% and 80% uptake from gated communities before they can rollout.
Yet, Parkhurst and Craighall are able to offer access at a once-off connection fee of around R2 500. Costs range from an entry-level price of around R399 to about R1 490 a month, depending on the offering selected, a price both suburbs contend is much cheaper than the comparative ADSL offerings.
Schoeman adds companies such as Vumatel have a more nimble business model that sees the fibre as a 16-year asset; and not something that must generate returns within five years.
Perry says suburbs taking the matter into their own hands – which is legal – is fantastic, as long as they have experts on board so they will not be left with expensive white elephants. She notes this move should spur operators to move up their deployment models, as it shows the demand for high-speed, reliable, cost-effective broadband.
Schoeman explains about 40 suburbs – in wealthier Johannesburg and Cape Town areas – will go into the project pipeline soon, as residents will be asked to sign up for the initiative to gauge interest. Once a commitment level of between 30% and 35% is reached, these will go onto the development list.
Once 2017 is reached, by which time Vumatel expects to have connected 100 of South Africa's thousands of suburbs, Schoeman expects costing to have come down enough to make economic sense for the company to spread its wings into less wealthy suburbs. "Residents have been neglected; the infrastructure should be in place."
Schoeman says, although smaller scale rollouts such as these operate on a difficult model, he anticipates competition.