Pavements in SA cities have begun to look like building sites as workmen, shovels in hand, dig long trenches. It has nothing to do with the Gautrain project. Rather, the workmen are contracted to Telkom to replace the company's ageing copper-based infrastructure with fibre-optic cables.
With competition looming it's a do-or-die project for Telkom. The company's goal is to shorten the length of the local loop - the copper cables that link consumers to its network - so it can provide much faster broadband access into consumers' homes. The ADSL technology that Telkom uses to deliver broadband over copper is limited by the distance between consumers' premises and their nearest telephone exchange. The nearer people are to the company's fibre network, the faster the connections that can be delivered to them.
Without these fast connections, Telkom's plans to deliver television over its broadband network - thereby broadening its revenue sources as pressure builds on its core voice business - will come to nought.
The project must also be seen against the backdrop of looming competition. Neotel plans to launch its first services to residential consumers in the second quarter of 2007 and cellphone providers MTN and Vodacom are soon expected to deploy a 3G technology called HSUPA, which will allow for the superfast upload and download of data.
Responding to the wireless threat, Telkom is pushing ahead with plans for a wireless broadband network of its own next year. Testing is almost complete but it must still decide how it will charge for the service. The network, based on WiMax, will initially be built in SA's urban areas - in many of the same areas where ADSL is already available. Telkom hopes to use WiMax to compete more effectively with iBurst, a wireless broadband provider that has signed up more than 30 000 customers.
However, the company would do well not to lose focus on its fixed-line network. Industry pundits, speaking last week at a telecommunications confab in Hong Kong, suggested that fixed-line operators that don't begin installing fibre directly into people's homes - rather just simply shortening local loop lengths, as Telkom is doing - could find themselves in trouble as demand for high-definition television (HDTV) and other broadband-intensive services exceed the physical capabilities of copper cable.
But Telkom chief technical officer Thami Msimango says fibre to the home doesn't make sense in SA. In places such as Hong Kong and Korea, where people live in high-rise apartment blocks, it's easier and cheaper to deploy fibre, he says. It is more economical, not to mention practical, to lay fibre to street distribution cabinets (the green and blue boxes dotted around SA's neighbourhoods) and to use the existing copper infrastructure to provide access over the last couple of hundred metres into people's homes.
One of Telkom's next big projects is deploying a faster version of ADSL known as ADSL2+, which theoretically allows download speeds of up to 24 Mbit/s. Msimango expects speeds of about 8-10 Mbit/s, twice as fast as Telkom's fastest current ADSL offering. The company hopes to make the technology available in the first half of next year.
ADSL2+ is well-suited to delivering television over broadband (known as IPTV). Telkom wants to deliver both standard-definition and high-definition IPTV to SA consumers. The latter is particularly bandwidth-hungry - HDTV requires 8-20 Mbit/s of bandwidth.
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