“We are busy with a couple of very interesting FTTH (fibre to the home) trials at the moment, and the basis of that is try to come up with exactly that model. We think we’ve found the one that works,” Hay said.
“The concern that we have is that it is a fairly unique model with a particular player, and we will announce something about this in the next few weeks,” he said.
“We’re not going to do mass roll-outs, no-one is going to do mass roll-outs of fibre to the home, when globally the experience is something between six, and if you are lucky, twenty percent of homes passed, get covered. If you look at the physical geography of South Africa, that makes for an incredibly difficult business model,” Hay continued.
He said further that FTTH would eventually come, “there is no question…it’s going to happen. So what we are looking for is people who are prepared to look at a model that works”.
Speaking at the 2012 Mybroadband Conference, Hay provided a hint of what that model might look like. “What we need is a partner that is literally prepared to do the physical infrastructure, at the home end, and to recover their investment on the basis of facilities.”
The CTO said that, as soon as one had multiple players in the chain wanting to make a mark-up on the deal, that’s when the model started to become challenging.
He said that facilities into the home was crucial, whether funded by home owners, or developers.
“Someone needs to fund the underlying infrastructure, which is going to cost R10,000 to R20,000 per home; then the broadband comes out at a reasonable price per month.”
“We are looking for that kind of partner who could do that. If we do find partners like that, absolutely, we will talk to them,” Hay said.
Hay said that Neotel’s current fibre infrastructure already passed around 4,500 businesses.
Gustav Smit, CEO of Dark Fibre Africa (DFA), said that that the 6,500kms in fibre that his company had already trenched went past at least past 120,000 buildings. “That’s business buildings, homes directly next to the road, not two deep or three deep,” he stressed.
Smit noted further that the links which DFA had taken into buildings accounted for less than 5% of those 120,000 buildings. “There must be something wrong there. Somebody is not doing their job. The Internet infrastructure is there,” he said.
Smit said that the next challenge was that the country lacked Internet fibre tails into the home. He called on government to invest in this infrastructure, citing efforst by the Australian government.
“There is more than enough fibre right in front of everybody’s home. The pricing should come down if we can go into every one of the 120,000 buildings,” Smit said.