South Africa Broadband Update

Interview with FTTX Africa Council CEO, Juanita Clark

Juanita Clark: Leading up to this event, FTTX council conference, the president, Dr. Andile Ngcaba approached me and we, in the last year had a new minister elected and he felt that it was an opportune time to bring some of the top CEOs of the industry together with her, to sit down, to have open conversations about the needs of the fiber industry. So, what happened yesterday was a signing of the Principles of Excellence; a memorandum of understanding signed by the CEOs. Commitment to job creation, ongoing job creation, commitment to ongoing investment in the industry, commitment to future technologies and innovation.

One of the more important commitments is to reduce the digital divide in Africa. It’s ever widening and a concern, but we have not managed to come up with real solutions for narrowing this digital divide. What happened yesterday was a landmark – it’s never happened in the history where industry CEOs have come together and pledged their support to a minister. The more important matter that was on everybody’s mind is to say, “How are we going to make sure that we have ubiquitous access to broadband?”

If we can come together then we can solve this problem. I think too often it’s just finger-pointing and people are saying it is the government’s responsibility and government saying, but private sector is not doing enough. And this was a coming together of minds to say, “You know what, it’s our collective responsibility and we are committed to doing something about it.”

Brad Hine: That’s fabulous. It is landmark in the sense that other communities and FTTX around the world could probably take your lead from this. I see a lot of this working from the other chapters in the world, but as it gets to the communities in the underserved areas of Africa.

What does this agreement mean in terms a mission for the FTTX council?

Juanita Clark: One of the very important things that we’ve been focusing on is to say, let’s not look at what’s different about ourselves, let’s look at what unites us and all of us have personal drivers and we’ve got company drivers and sure enough we are responsible to shareholders and we need to make profits. But what’s also important is that every single person, when you have a one on one with them, and I’ve certainly learned that in my engagement with the CEOs, is that they at a personal level feel that they’ve got a strong commitment towards under-serviced areas and towards people that that can’t afford broadband. And for us it was important and for me personally it was important to put them in a room and to say to them, when you’re out there you’re competing and that’s great and you have to, that’s your job.

But I know that you all know that you all want to make a difference. So let’s come together. Now we haven’t put particular actions to what we signed yesterday, but yesterday was the commitment to say we are going to go out there and we are now going to develop this framework and put those actions in place, determine them, decide what they are and then push this into more. And we’ll want to develop a document that we can take back to government to say if this then that. That for me are the four most important words right now in way we are. If this then that. If you allow us to do this then that will be the result. And everybody agreed on that and the minister certainly has shown a commitment as you’ve seen. She signed every single one of the documents and we’re very excited about what that potentially could mean.

Brad Hine:  I am curious about what led you to this point in your career. Obviously it’s been a journey for you, but where did you start? How did you get to this point in being so involved in FTTX and what have you done in years prior to this?

Juanita Clark:  I’ve always been part of the corporate world. Never thought in my life that I would spend over 10 years in a not for profit. I always thought very differently and I actually founded the organization next year, September it will be 10 years. Started it together with a man called Richard Came who at that time just started a small company called Dark Fiber Africa. It was a startup. They had hardly any staff. It was a vision at that stage.

We work together to establish the organization. We found that there was a role, very few people understood fiber at the time. We would go and talk to municipalities about deploying infrastructure and they were perplexed. They couldn’t understand why we were doing this. We had just come out of a monopoly. We still had only two players at the time in the market that had licenses. There was a big lawsuit against the government. And what happened was that the lawsuit effectively opened up the market and that’s how this came about. More and more companies started looking. Very few people know this, but in South Africa alone, there’s more than 50 fiber network operators. Some of them obviously really small. But we’ve tried to play a role in bringing everybody together. Legislation hardly ever keeps up with market conditions and we found that if we were just going to leave this industry, it would never have looked the way that he does today. So we tried to play, and we still do, try and play a small role in bringing people together, stimulating conversation and yeah, I’m being applauded.

What innovations do you see transforming fiber’s future in Africa?

Juanita Clark: When we started the FTTH council, we had a strong vision to drive fiber to the home deployment. We still believe that fiber is a critical component of network infrastructure and will always believe that and we will always advocate for the deployment of fiber infrastructure. But we also realized that there are other technologies that compliment fiber and especially on a continent like Africa, it’s very difficult in some instances to say you have to have fiber all the way.

What we need is high-speed, quality infrastructure. Fiber will always have a significant role to play in that. We talk to everybody, mobile network operators and I think we’re certainly seeing a lot of convergence especially in South Africa, between fiber companies and tower companies. We will change ourselves and become accommodating to different technologies and bring everybody together and talk about what it means in general to all the industries that rely on fiber and fiber back haul.

Interview with Siphiwe Shandu, Dark Fiber Africa

Siphiwe Shandu:  Dark fiber Africa is a Dark Fiber network provider. We are an open excess carrier network that provides the services industry, particularly from the major perspective or majority of the services are within the metro and the fiber density is within the metro space. My role within Dark Fiber Africa is presales engineering, meaning that I work with the sales team to be able to advise and consult and provide the right product and the right solutions for our customers in that environment.

What do you your customers want from Dark Fiber Africa?

Siphiwe Shandu:  It depends on the client and where they are in the value chain. If it’s a seasoned internet service provider or communication service provider is the generic term, then they most of the time know what they’re looking for. So they come to you and say, I want A, B, C and D and that ABC and D would be, I want a Dark Fiber link between A and B and Dark Fiber link must be two pairs, G652 and the standards. They are seasoned, they know what they’re doing. And then the second option, the other things that we see is that a customer would say, “I’m an ISP. I want a service, I want connectivity. Give me what you have, what do you recommend?”

So those are the types of customers that on from a presales perspective, there’s more value to add to them because they are asking you, in essence, to be a consultant to say that this is your end game and then you need to understand the end game. So this is your end game. You want connectivity, you don’t care about the medium, you don’t care. You just want the end customer to consumer services. And those are the type of customers that we like and which has given us some great reviews, in terms of the net promoter score because they’ve seen that DFA is one of the entities in the market that actually walk with you and work with you and say we’re not just selling a piece of fiber, we’re selling you a value and we’re saying that this is the network that can enable you to achieve your vision as a service provider to your end customer.

At the moment the majority of the fiber, things like more than 15,000 kilometers of fiber, probably 90 to 95% of that fiber is in the densely populated areas. So in the metro areas, and that’s the majority of the place that we serve. But with that being said, and it’s one of the things that we mentioned in one of the sittings at the conference, is that our fiber from a long distance network perspective, it passes all of these small towns or the underserved areas as you mentioned, but we don’t have the right business model to actually get those connected, even though the fiber is running. I think it’s one of the concerns from the South African perspective. There’s a lot of fiber criss-crossing the country, but the people that are in close proximity to that fiber, they’re not having access to that fiber.

From a metro perspective, the FTTX players, they pride themselves about homes past, businesses past and they have the ability to actually connect those businesses and connect those homes. But in the rural and under serviced areas, it’s a challenge to actually get that right. You can say that in the rural areas, I’ve got five towns passed or 500 businesses passed or 5,000 homes passed, but there’s no ability to connect those towns because the models are not there. Whereas in the Metro areas it’s easier. And then from a DFA perspective, majority of the things that from a rural connectivity perspective or under service areas, at the moment it’s seen as corporate social investment type of initiative. It’s not a business funding or a business development arena at the moment. So those are some of the things that we’re experiencing.

Brad Hine:  So Dark Fiber Africa relies on other ISPs to connect them into some of the underserved communities in more rural areas.

Siphiwe Shandu:  I would say that wireless service providers or your WSPs and some of the smaller webs get taken over or acquired by bigger wireless operator and then we’re able to leverage that existing relationship to say, you’re the big wireless operator, we can provide the service to you, you can be the interface to the smaller regional ISPs, which predominantly use wireless connectivity to connect that to customers. They ask certain, what can you call it, providers that are actually going to the small towns. They’ve recognized that there’s a need to connect the small towns and they’re going there and laying fiber, but it’s a lot of capital and some of it it needs some sort of cross-subsidizing on certain things which smaller and more agile companies can do because they have the leverage to do that and they have the flexibility to do that.

But when you’re looking at the DFA perspective, we’ve got shareholders that… Our shareholders are a listed company. So whatever dollar that you put under ground, they want to see the return on investment. So it becomes a different business case. So from a connecting those smaller towns, yes, we definitely rely on the other market players to say that we are enabling you to actually get the end user connected. We will not go directly to the end user, but we will provide you the connectivity. Just as an example, we have a route between Johannesburg and Durbin and it goes via one of them probably rural communities. And we have drop off points within certain towns that you know there’s certain activity. And then in those towns we put points of presence, but we don’t build out into the town.

So that’s where typically you will interface with the wireless providers. So wireless provider will come into our points of presence, maybe build a fiber link to their high tower or to their high site and then they will propagate with microwave or other wireless mediums that are available to them. And then obviously the mobile network operators from a long distance network, that they would want to come and connect. They will want to come as close to the fiber as possible because they can, and they can be able to connect up the towers in those areas. And then they provide cellular connectivity to those remote areas.

What drives you to serve your fiber customers?

Siphiwe Shandu: One of the things that you don’t realize how much of value you are to the South African economy because each and every call that is being made, even from a cellular perspective, every call that is being made at some point it’s going to touch the DFA network. That gives me a sense of pride that everybody that’s communicating, anybody that’s talking, sending a WhatsApp, watching a video on YouTube, sending an email, doing something or you can get data analytics, they’re connected to the cloud and looking at data analytics or doing data mining, whatever the case may be. At some point that signal, that zero or one is being transported as a light on the, on the DFA infrastructure. So for me that really put a smile on my face. I’m adding something to this African economy.

Brad Hine:  So there is a bigger picture here even as we’re sitting in the FTTH Africa council conference here in Sandton and Johannesburg, there’s a bigger mission for this. It’s not just regional, it’s not just Africa either.

Siphiwe Shandu:  And also looking at from an FTTX perspective or from FDX Africa or even regionally or whatever the case may be, it really is around that, that if I’m accessing the internet right now, we understand that we’ve got undersea cables coming in and lending into the South African shores, WACS, or SEACOM, or SAT3, whichever undersea cable is going to Europe somewhere, it’s going to the US at some point. And if I’m accessing a Google server in the US, before it gets to WACS, or before it gets to SEACOM, or it goes to SAT3, or it goes to any of the undersea cables, it’s going to touch the DFA infrastructure from the metro Johannesburg to the metro in Cape Town. We actually have a facility where the WACS cable landing station is. That’s where a majority of the internet service providers, the big tier one or whatever tier two internet providers in South Africa where they actually interface and where they appear with the international guys, they actually use the DFA infrastructure, so it is really global. It’s not just about connecting the home in a new region of South Africa or connecting a home in Sandton, but it’s actually looking at that fiber infrastructure is actually connected to the globe.