Meet Parkhurst’s fibre pioneer

The lack of response from a telecommunications industry slow to roll out fibre to the home led the residents of the Johannesburg suburb of Parkhurst to take matters into their own hands. Driving the initiative is Ryan Hawthorne, the unlikely hero leading a project that is likely to attract intense interest. By Regardt van der Berg.

Parkhurst's fibre-to-the-home pioneer Ryan Hawthorne

Parkhurst’s fibre-to-the-home pioneer, Ryan Hawthorne

The quaint “village” of Parkhurst is one of my favourite weekend spots and I often visit its pubs and eateries with the missus. So, as the resident of a neighbouring suburb, news that Parkhurst is planning to roll out fibre broadband to all homes and businesses piqued my interest.

What was of particular interest was that the roll-out of fibre to the home (FTTH) — something that barely exists in South Africa — was not being driven by one of the big telecommunications operators but rather by a community fed up with poor broadband connections.

The man leading the project is Ryan Hawthorne, a 34-year-old economist who specialises in competition and economic regulation at his consulting firm Acacia Economics. Hawthorne, who previously worked at the Competition Commission and in the telecoms industry at Neotel, is also an associate of the Centre for Competition, Regulation and Economic Development at the University of Johannesburg, working there as a part-time researcher.

I meet him at his upmarket Parkhurst home to get a better insight into the suburb’s plans, and what they could mean for the deployment of high-speed fibre infrastructure elsewhere in the city and in South Africa.

The early adopter
As he opens the door to greet me, I notice that he’s wearing a Pebble, the smart watch that was developed with money raised through the crowd-sourced funding platform Kickstarter in 2013 — a sure sign he’s an early tech adopter. His home has the telltale signs of him being a cord cutter — there’s no satellite decoder, just a PC connected to a large-screen television. He tells me he is a big fan of Netflix, the US video-on-demand provider that hasn’t actually launched in South Africa yet but which is viewed by a growing number of consumers willing to jump through a few technical hoops.

As we settle in at his dining room table for the interview, I ask Hawthorne about his background and how exactly he came to be driving a high-profile project to wire up an entire suburb to the kind of broadband most South Africans can only salivate about.

While working at Neotel, Hawthorne became involved in the fibre broadband project in the Maboneng district in downtown Johannesburg, a project led by entrepeneur and former telecoms industry executive Mark Seftel. The Maboneng project was the inspiration that ultimately led to Parkhurst idea. “Parkhurst seemed like a natural place to do it,” he says.

It was not until February this year that things really got going for the Parkhurst initiative. Hawthorne describes the day he saw somebody posting a comment on the “I Love Parkhurst” Facebook page about a plan to roll out of closed-circuit television cameras in the suburb, which required fibre to be deployed. That sparked the idea: he immediately thought about deploying fibre to the entire neighbourhood to serve the CCTV cameras and using the same infrastructure as a broadband network.

Hawthorne started “harassing” the Parkhurst Residents and Business Owners Association (Praboa), but admits he did not have to do much convincing. The association met a day after he e-mailed them and they started to meet potential suppliers soon thereafter.

Following Google Fiber’s lead
Hawthorne says that the original plan was to use the City of Johannesburg’s street poles to deploy the fibre. This is a technique used by Google Fiber, a division of the Internet giant that is building fibre access networks in selected US cities. Google is installing fibre on existing above-ground infrastructure, eliminating the need to dig trenches and reducing costs.

But the residents’ association’s letters to the city seeking permission to use their their poles went unanswered.

They proceeded to contact vendors and soon after starting receiving “some really cool proposals”.

One proposal, from a new venture called Vumatel, seemed particularly interesting.

Vumatel’s proposal offers open-access fibre to the home with no infrastructure costs to the neighbourhood — just a monthly access fee. It is offering a 1Gbit/s fibre connection for R1 300/month.

“That’s the same amount I pay for my 4Mbit/s Neotel WiMax connection,” Hawthorne says.

Vumatel will create a system that allows residents to pull fibre into their homes from special distribution cabinets located outside each property. This system is enabled by consumers, who simply buy a kit from a local shop to access the fibre node.

The costs
Rolling out fibre is not a cheap exercise. Hawthorne estimates that the cost for a self-funded roll-out runs into the millions. The backbone infrastructure alone could cost north of R5m, while the fibre drop to each property could run to an average of R4 000. “Based on the number of stands in our suburb, each resident would have to lay out just over R6 000 for a complete FTTH solution — and that’s if every resident signs up. This is not really feasible in any neighbourhood.

“The truth is that telecoms executives don’t get excited about a few hundred residents spending upwards of R1 000/month. For us, it is more about getting them interested in the suburb,” Hawthorne says.

Praboa wants potential suppliers to respond to a request for proposals it has issued by 30 May. He hopes to get the ball rolling as soon as possible thereafter.

Feedback from Parkhurst residents has been “very positive”, says Hawthorne.  In the two months since a survey was issued to canvass input from residents, there has been a positive response of about 10%. He says at least 30% positive feedback is needed to to make it viable.

The suburb suffers from ageing infrastructure and residents have long complained about poor ADSL speeds in the area, thanks in part to the fact that the area is far from a Telkom telephone exchange.

He’s hoping to get enough people on board to make it feasible. Apart from the security and enhanced broadband infrastructure benefits, FTTH will enhance property values. He adds that content providers, including MultiChoice, could leverage the fibre infrastructure to deliver full 1080p or even higher resolution services.  — © 2014 NewsCentral Media

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  • Shisno

    Government should focus more on IT infrastructure in SA. They have no idea on the economical positive impact this will have and also support small tech businesses, entrepeneurs and also increase the demand for devices that require high-speed internet to function properly.

  • http://www.bmi-t.co.za Tim Parle

    Nice one Ryan! All the best with this venture.

  • Nkosinathi

    I commend what Ryan did as time has proven that corporates and gov dont give a flying F*ck about people, we need to capitilize on this and make money in the process, Ryan has taken a very little fraction of the market from the big boys…as they are denying us quality,good one on you….now approach surrounding suburbs and soon enough…bam!!!!!!!!

  • Nimue

    The ultimate in DIY! (Shame the article is so badly written and un-edited…)

  • v_3

    I suspect that government does NOT want people getting video-friendly internet – it will cannibalise SABC & Telkom. This is why it has dragged its heels since the days of minister “Poison Ivy”.

    Too conspiratorial?

  • http://www.acaciaeconomics.co.za/ Ryan Hawthorne

    Thanks Tim!

  • http://www.acaciaeconomics.co.za/ Ryan Hawthorne

    Exactly – and there is lots of interest from lots of vendors so it is really only a matter of time before a second residential fixed line network gets built.

  • Greg Mahlknecht

    >Too conspiratorial?

    I used to think that, but an almost flawless 20 year history of appointing particularly useless struggle buddies in leading positions responsible for communications, make it very tempting to believe there is a concerted effort to retard and control communication to the poor in this country. An educated voter generally isn’t an ANC voter.

  • Greg Mahlknecht

    Will you be permitted to share the feedback from vendors so that others interested in trying to find a partner to service their neighbourhood can benefit from this information? I understand some of the information might be NDA’d or specific to your project, but there will be tons of useful stuff in there nonetheless.

  • Werner Ackermann

    What is the small print on that VumaTel proposal?

    4Mbps for free (monthly) sounds awesome, and R499 for 50Mbps is excellent, but how much data can you actually pull?

    R6k + R1500 + R1000 once off is not much if the actual quality is consistent.

  • http://www.acaciaeconomics.co.za/ Ryan Hawthorne

    I could host a google plus hangout some time to take you through some of the proposals? Whatever is out there in the public domain is basically what the vendors have said could be made public – it might be a little bit early to release everything else right now. (Please start accepting calendar invitations on Google Plus Greg – there is at least one there waiting for you!).

  • Greg Mahlknecht

    Cool – no rush.. maybe when the May30 deadline is hit, you can do a G+ hangout with all the proposals? I’m sure there are a number of people around the country who’d be interested in the results, and attend.

  • Greg Mahlknecht

    That’s the line only… the next slide has the bandwidth packages you need to bolt on top of that. Sadly, no uncapped – hopefully by the time all the proposals are in, someone will come with some flavour of uncapped solution on top of the Vuma network.

    It’s R800 for 10mbit ADSL uncapped from Afrihost – and they constantly complain that most these charges are from over-inflated Telkom IPC charges, etc – it’s time for them to put their money where their mouth is and deliver amazing value outside the Telkom network.

    Not a good sign – I find it quite disturbing that Afrihost are quoting R600 for a 300gig FTTH package, and R600 for a 300gig (150+150) ADSL package. Hopefully it’s just because of the low user count in the project, as opposed to the scale they have with their national ADSL subscriber base.

  • Dave Baker

    Telkom are looking at replacing our Copper with FTTH.
    No commercials yet

  • Davebee

    I have also been picking up some straws in the wind from local contractors that Telkom is baby-steps preparing to hook up their new fibre to exchange street cabinets on the customer side with fibre to the home and office. That would make business sense anyway.
    Could this be the ultimate reason behind the Telkom staff reduction initiative that is coming up?
    Why keep on staff who are not going to be necessary to maintain a copper network? Again, it makes business sense.

  • Eric Martinsich

    It is my opinion that many of you do not know what is hapening with fibre rollout. Western Cape local municipality has rolled out fibre to most of the buildings and will be selling fibre space. Gauteng will get a massive rollout soon with Altech and Durban is preparing for their rollout. The Railways has conected up all of the country and Telkom has all their backbone in place. Telkom is on the point of rolling out to the home customer.

  • Greg Mahlknecht

    Do you have any information on these projects? Strange that nobody’s picked them up. Western Cape we’ve heard about ; Altech I haven’t seen anything – any idea of coverage areas? The railways having “connected up all of the country” is a little vague and sounds too good to be true. We know about Telkom’s trials – a few dozen dwellings – but the last I read they planned on limited roll outs in gated communities toward the end of the year, not widespread FTTH.

  • Eric Martinsich

    Hi Greg. You can go and look by any railway station and see the optic cables in the air. there is more than one on some lines.

    http://www.news24.com/Technology/News/MTN-launching-high-speed-fibre-broadband-20140424

    http://mybroadband.co.za/news/broadband/88601-fibre-to-the-home-from-telkom-in-2014.html

    http://www.news24.com/Technology/News/Vodacom-eyes-national-broadband-rollout-20131112

    http://www.ujuh.co.za/altech-to-roll-out-r12-billion-gauteng-broadband-network/
    These are only some players and fibres are being installed continually. ask any cable accessories company. all those trenching throughout the country where the colour ducts are been laid in trenches is for fibre. C Cell and others laying backbone fibres linking Durban, gauteng, cape town etc.

  • Dave Baker

    So far Telkom have been most engaging with our neighbourhood. MTN have as well.
    Of course things move slowly but that is not surprising given the replacement project.

    Eventually the whole country will go Fibre… This is the normal course of technology. Out with the wagon, in with the car. But when the car arrived people didnt switch immeidately

  • http://www.acaciaeconomics.co.za/ Ryan Hawthorne

    The more the better! There are lots of metro networks out there but no real residential fibre rollouts other than in some gated communities and the odd trial here and there. Telkom talks a very big game – and they have all the advantages in the world in rolling out a fibre to the home network (existing poles, ducts, etc.) – but they are focused on their business customers (trying to buy BCX for example, again). For example, Telkom installed MSANs in Craighall Park, next to our suburb, more than 6 months ago (and probably going on for a year) but they are still not live (for reasons unknown, perhaps due to power). We need at least two fixed line networks to residences in South Africa in order for competition to heat up, prices to fall and quality to improve. Google Fiber in the US for example is rolling out the third fixed line network in many cases, and this has caused incumbent cable and copper incumbents in those areas to reduce prices and increase speeds significantly.

  • Dirk de Vos

    Great idea: As Greg Mahlknecht says, the real value will be in the processes & procurement protocols so that the project can be repeated elsewhere. The quicker broadband connectivity is seen as a utility, the better. Start out with a type of suburb based Armed Response business model and push it to become like water, sewerage and lights. If Telkom had any sense, it would create, with local residents, suburb level ISP’s which deal not only with the last mile but offer its fibre backbone in on the transit level. The only potential trouble with this project is its own success. Too many Parkhurst residents take it up and use their capacity and there will be significant contention in available bandwidth up the chain. Lot’s of luck on this one!

  • Greg Mahlknecht

    We’re aware of the Vodacom and Telkom ones – trials at this point, and limited roll out near the end of the year. My name’s already in for the MTN one.

    Didn’t know about railway stations, but that sounds strange – running fibre backbones in the air doesn’t sound like a great idea!

    The Altech one seems to be for government and commercial use – eThekwini’s had that kind of thing live for a few years now. Doesn’t look like it’ll filter down to FTTH any time soon.
    The big problem is that most the actual live stuff (Metros, Altech’s project, Neotel) isn’t targeting consumers. You mention the mobile operator backbones – I’ve researched and engaged extensively with MTN on the trenching for their infrastructure, and it doesn’t seem that it’s very relevant to FTTH roll-outs unfortunately… because one such cable runs right past my house :(

    Fibre backbones are becoming a dime a dozen, nobody seems to be laying the last mile between that and the homes.

    You seem to have knowledge of disparate fibre projects around the country, but haven’t manage to connect the dots as to how they impact on FTTH delivery.

  • Joe Black

    Screw government. All we need from them is a set of rules to operate by and for corrupt politicians to keep their greedy mitts out of the country’s business.

  • Andrea Joubert

    The government will not do that in a million years, it does not suit them.. the kraal comes first.

  • Werner Ackermann

    I just had the PDF for reference, which does not have an additional slide :(
    I personally see no issue with capped especially where data rates are extremely high, but R2/MB is a bit high.

  • http://www.bmi-t.co.za Tim Parle

    The fibre at the railway stations is the ADSS fibre installed by Transnet some years back. Broabdand Infraco utilise the same fibre cable.

    Re the municipal projects, the City of Cape Town has been providing access to its dark fibre network for around a year now. eThekwini have deployed well over 1000km since around 2008 and have been providing MetroConnect services on a wholesale basis to ISPs for a good few years. None of this translates into FTTH at the moment.

  • Greg Mahlknecht

    I don’t like capped because it changes the way you use the internet. You’re always counting the bytes in the back of your mind. Uncapped internet allows you just explore and do stuff without thinking of any limits. I’m 100% happy with soft-caps too, if it keeps prices down and uncapped isn’t a realistic option. If the FTTH options were (say) 250gig or 500gig cap at 50mbit and it’s 5mbit uncapped after that, you can still get stuff done and stream entertainment at SD resolutions. It becomes an inconvenience, not a crippling blow.

  • Greg Mahlknecht

    Yes.. .too much backbone, Too little FTTH
    We actually had MetroConnect at our offices for a few years … nice product, but when Neotel pushed their network out to cover us, we signed up and never looked back. MetroConnect started so well, but just seems to be have left unwanted and unloved – they were YEARS ahead of everyone else, and squandered their lead.

  • Werner Ackermann

    I could accept if it was either soft-capped, or scaled according to your usage.

    EG:

    100GB at R2/GB, every GB over that still costs R2/GB.
    150GB at R1.90/GB, every GB over that still costs R1.90/GB.

    So, if you know you’ll be using more than 100GB it’s still worthwhile to stay in the 100GB package. Anything under 142GB will be cheaper on 100GB package.

    Greatly simplifies provisioning, and still gives a saving to the well-behaved client. And 42GB almost 42% over your ‘package’ is plently of variance.

    I love the after-hours type incentives though – eg 5x data in morning hours, and double between 18h00 and 24h00.

  • Michael

    Great idea. The initial costs seems pretty high but I am definitely watching this one with interest. Good luck and hope this works out

  • Vlak Haas

    It’s interesting that this is called pioneering seeing that companies like SADV, ATEC, Smart Village, Clearline amongst others have been doing FTTH since 2005 in South Africa. Most of these companies offer a funding model, ownership models etc. Bottom line the business case needs to make sense for anyone to put stuff in the ground. Fibre is expensive, but the civil works is even more expensive. It remains to be seen how long aerial fibre is going to stay on the poles, and how messy its going to become. Having a non enforceable HOA doesn’t help either. Yes lots of people interested – please ask them to start paying up those R5000 installs. As the saying goes “talk is cheap, money buys the whiskey”

  • http://www.acaciaeconomics.co.za/ Ryan Hawthorne

    That is true – there are plenty of FTTH connections in gated communities etc. but there are only a few FTTH trials here and there in open suburbs. One of the reasons we went with Vumatel in Parkhurst is because they don’t charge R5,000 for installation – they have taken a long term view on the recovery of capital, as is normally the case in an infrastructure based business (though this is not typical of SA telcos). They also understand the fact that cost per household falls with uptake, which in turn requires low prices.

  • http://www.acaciaeconomics.co.za/ Ryan Hawthorne

    Are you going to join the FTTH Council google plus hangout on Saturday?

  • Greg Mahlknecht

    I’ll do my best, but have some family commitments. Niel has phoned me already, and Telkom say they’re pushing FTTH in to my area, and should release pricing this week, so things are progressing along swimmingly. I really just need a firm commitment from Telkom if they’re doing my area, and if not, Vumatel will give me a thumbs up/down for my rea in a month from now, so I’m actually okay for information – just in a holding pattern pending more information. I guess FTTH roll-outs don’t move that fast, so I need to learn to have a LITTLE patience :)

  • Vlak Haas

    Well best of luck, I hope Vumatel is around in a couple of years. Vodacom Gated went out of business, and they had Vodacom behind them. I understand that some of the existing gated FTTH providers are now charging nothing for install as long as you sign a 24-month contract, have a mate that stays in Southdowns very happy

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