Cape Town next for last-mile fibre player

Conduct Telecommunications plans to spend R500m in the next 12-24 months taking high-speed fibre infrastructure to 100 precincts. By Duncan McLeod.

Conduct Telecommunications, a fibre-optic infrastructure developer, plans to spend R500m in the next 12-24 months expanding high-speed communications networks to 100 precincts around the country.

The company, which is backed by international private equity firm The Birchman Group, will begin construction of its first fibre precinct in Cape Town in the next few weeks and is also expanding its presence in Johannesburg.

MD Johan Pretorius says Conduct Telecommunications, which has received debt financing from the Industrial Development Corp, plans to spend as much as R5bn in total in the years ahead as it builds fibre infrastructure, first to business premises and later, once the business case becomes more compelling, into residential homes.

The company, which built its first fibre precinct in Illovo, has expanded to nine active nodes in Johannesburg, including Hyde Park, Rosebank, Illovo, Chislehurston, Bryanston and Rivonia. Construction of a network in the Cape Town suburb of Claremont will begin on 1 November, with plans to expand to other parts of the country’s largest coastal city in 2013.

In Johannesburg, new fibre will be laid in Woodmead, central Randburg, Rosebank, Parktown, Sunninghill, Rivonia and Bryanston in the months ahead.

Like metropolitan and national infrastructure player Dark Fibre Africa, Conduct Telecommunications provides “unlit” fibre to Internet service providers rather than serving end users directly. It provides the fibre on an open-access basis. Service providers, in turn, have begun supplying connections to businesses of between 2Mbit/s and 1Gbit/s, Pretorius says.

“We are not trying to turn ourselves into an operator,” he adds. “We are a last-mile infrastructure provider only. Lighting the fibre and backhauling it is best left to the experts.”

Although Conduct is focused on providing connectivity to small and medium-sized businesses, over time Pretorius expects the focus to shift to delivering fibre directly into people’s homes. “We do have a model for FTTH [fibre to the home] but the market is still some time away,” he says. “We need to go to the SME market first, before FTTH will open itself [to us].”

Even then, fibre will only be offered to residential areas that fall into what Pretorius calls the “richer demographic”.

Despite Telkom’s multibillion-rand investment in higher-speed technology for its copper network, Pretorius says FTTH will eventually become a necessity. “This is a way for Telkom to sweat its copper infrastructure a little further.”

Even though he believes home fibre will be offered in SA, Pretorius concedes that Telkom’s plans to increase speeds over its copper infrastructure could push back the big FTTH investments that he believes are inevitable. “How long will 40Mbit/s be good enough? It’s going to be a big jump for the consumer, but how long will it hold you for?”  — (c) 2012 NewsCentral Media