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Press Release
29 January 2009

Sharing is caring

CENTURION, Gauteng – 29 January 2009 – The recent announcement by MTN and Neotel of a near R2 billion investment in a national fibre optic long haul, or inter-city network, points to an increasing trend towards the sharing of infrastructure rather than each operator building its own. Richard Came, a director and shareholder of fibre laying company Dark Fibre Africa, said the venture endorsed the concept of infrastructure sharing, which it had been promoting for two years and which was the accepted norm in international markets. MTN SA’s managing director Tim Lowry admitted that it had made no sense for both it and Vodacom to build base stations along the country’s major routes as they rolled out their respective GSM networks. Lowry said by working together on the national fibre network, each party would save between R400m and R500m. Came said even building their own, MTN and Neotel would have saved money on transmission costs, at Telkom’s current tariffs. Considering the trend towards infrastructure sharing, Vodacom’s apparent exclusion from the deal appeared peculiar. But, it seems likely that Vodacom will join the two operators at a later stage.

Vodacom said it had been building metropolitan fibre networks for the past two years and had also been closely involved in the discussions around a national fibre network: “Vodacom will make more information about its transmission plans available at the appropriate time.” Deloitte media specialist Danie Crowther said in some Asian countries, governments had actually put the building of national fibre optic networks out to tender. He said although it went against the grain in terms of wanting to deregulate telecoms markets, the issue of duplication of infrastructure meant it was possibly necessary to regulate this end of the market: “It doesn’t make sense for a country to duplicate.” The hard economic times of 2009 could see a fundamental change of ideology, with regulators determining that a single network with shared ownership and open access was the way forward, Deloitte said, as part of its predictions for 2009 in telecoms. In South Africa, Icasa does not regulate the actual laying of cable; it only falls within Icasa’s scope once the cable is actually lit, which is why Dark Fibre Africa can play in this space as an infrastructure provider, not an operator. But, the SA National Roads Agency; in the case of long haul routes, and the metropolitan municipalities, where the metro networks and last mile to people’s homes and offices are concerned, determine the laying of fibre by allowing access to dig up roads and pavements.

Dark Fibre itself focuses on the most profitable metro layer. Came said the long haul would always only be the preserve of a handful of operators. The next phase of fibre rollout would be the numerous adjacent access roads and arterials, followed by the last mile connection into buildings, office parks, gated communities and private homes, Came said. Although wireless would play a role, it would not be able to deliver on the requirements of broadband applications in years to come. He believes that fibre to the home or office will be commonplace five years from now. Came said city metros were taking a far more assertive stance in not allowing operators to duplicate disruptions on the same route and this would force operators into sharing civil engineering infrastructure. Dark Fibre estimates the cost of the actual civil engineering work (as opposed to the cost of the fibre cable itself) can account for up to 80% of a project’s costs. Already there has been considerable duplication in the metropolitan areas, on the metro network layer, with everyone from Telkom to Neotel, MTN and Vodacom laying its own fibre, particularly in the Sandton/Rosebank area where there have been continued disruptions for three years now.”Going forward, we expect sharing to become the norm as a combination of pressure from the metros’ authorities and pragmatic application of limited capital dictate a more mature approach.” This duplication, says Came, is also why it and others have experienced numerous cable breaks along the way. Dark Fibre was, through one of its sub-contractors, recently responsible for a cable break on Neotel’s network in the Sandton /Rosebank area, which affected a number of Neotel’s customers. But Came said while unfortunate, this should not have caused outright failure on the network as Neotel’s transmission equipment would normally reroute traffic via a redundant route, if that existed on this route.

DFA is the premier wholesale, open-access fibre-infrastructure and -connectivity provider in South Africa. We finance, build, install, manage, and maintain a world-class fibre network to transmit metro and long-haul telecommunications traffic. We started rolling out our fibre network in 2007, and to date, we have deployed over 13,000 km of ducting infrastructure in major metros, secondary cities, and smaller towns. Our network runs with an industry-leading uptime of 99.98%. We lease our secure transmission and backbone fibre infrastructure and provide associated connectivity services to telecommunications operators, Internet service providers, media conglomerates, tertiary education institutions, municipalities, government organizations, and other businesses, large and small, on equal terms. DFA is a Level 3 B-BBEE Contributor on the ICT Sector Codes.

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