SA economy cannot grow on 1GB: DFA

Dark Fibre Africa (DFA) CEO, Gustav Smit says that South Africa’s economy will not grow with operators selling data packages as low as one and four gigabytes.

Speaking at the MyBroadband 2012 conference in Midrand this week, Smit said that if somebody came to a customer’s door selling such data packages he should be turned away. “You should chase that oke away…we will never get the economy growing,” he said.

“South Africans simply don’t know what 20Mbps or 100Mbps to the home means. An opportunity needs to be created for users to test drive serious broadband, and ISPs need to play a leading role in mobilising communities,” Smit said.

The chief executive of DFA said that, between major fibre operators – including Broadband Infraco, DFA, Neotel and Telkom – South Africa already has a substantial amount of fibre waiting to be adopted.

He called on government to invest more in broadband in SA and highlighted the initiatives by the Australian government to invest significantly ($37.4billion) in a National Broadband Network project to provide high-speed fibre optic cable broadband to 93% of homes, schools and businesses by 2021.

DFA has already trenched more than 6,700 kilometres of optic fibre across South Africa, and Smit said that the company continues to trench more than 200 kilometres per month.

Smit said the network is used by companies, such as cellular network operators Cell C, Vodacom, MTN; landline network operator, Telkom; ISPs like IS and MWeb; media companies; and high Internet usage corporations.

“Furthermore, we have 40 clients at this stage and this includes some government customers. For example, state-owned Broadband Infraco has its own links between cities but makes use of our network to link its customers within the metropolitan areas.”

DFA also leases optical fibre to large corporations, such as banks, where these companies have obtained their own telecommunications licences.

The group does not actively sell its services outside of the telecommunications industry.
Smit said that, over the past five years, DFA has not had to build any fibre routes on a speculative basis and trenches have only been dug as customers have signed leases.

“We still have a large order book and that will keep us busy. We are extending our reach into secondary cities and some of the smaller towns so that businesses in more remote communities have access to high speed data channels.

“We will be taking on some risk as we work to get fibre to every business and many homes, we anticipate 20% take-up over the next four years,” he said.

Looking ahead, Smit stressed that, on a corporate level, the company has no plans to list.

“Companies usually list to raise capital to fund expansion, and while our expansion cannot be funded out of cash flows, our major shareholders – Remgro and NewGX Capital – have deep pockets, and [they are] happy to continue making capital available.”

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SA economy cannot grow on 1GB: DFA