Fibre rollout, fibre sharing and opportunities in fibre for independent infracos

Major investment is underway in fibre infrastructure in parts of Africa. Whilst MNOs have in the past seen the FTTH market as competition to the mobile sector, the synergies between the two are now coming to light. With regards to the role of independent infrastructure providers, there is a natural diversification  into fibre, leveraging expertise in deploying, maintaining and monetising shared infrastructure whilst driving down opex costs. We speak to the CEO of the FTTH Council in Africa to discuss how the market is evolving and what opportunities exist for towercos and MNOS.

TowerXchange: Please can you introduce the FTTH Council and the work that they do.

The FTTH Council Africa was established in the latter part of 2010 by ten founding members. It was a mixture of operators, product vendors, infrastructure and civil build companies.

At the time it was recognised that the industry needed support as there were vast gaps in legislation which resulted in major delays in projects. One problematic area was that local authorities were not geared to deliver the amount of Right of Ways that were being applied for. The absence of the Rapid Deployment Guidelines was never as evident as it was in those early days. Much has changed since then and the industry has resolved many of its own problems to some extent. However, while it continues to find solutions to its own challenges, there is still a great need for firm policy to be introduced if only for the purpose of on-going, and more aggressive investment. If we are truly going to see a proliferation of fibre the Rapid Deployment Policy is critical. It has the potential to live up to its name and change the landscape for all to rapidly deploy, not just fibre, but all telecoms infrastructure. This document underpins the long term goals of our members and infrastructure companies in general.

TowerXchange: What is the extent of fibre deployment across Africa (both fibre to the home and fibre to the tower) and how is this evolving in different countries? 

Keep in mind that very little copper has ever been built – so deploying fibre is a natural first step for most countries.

There is an insatiable appetite for data in Africa which drives the demand for fibre. In most African countries the bulk of deployments remain mobile backhaul (fibre to the tower) and this will only grow over the next few years. In 2015 Africa passed one million route kilometres of fibre infrastructure. If you consider the statistics one can clearly see how the pace of deployment is growing exponentially.

By nature of where the sub-marine cables land, coastal countries have more fibre than in-land countries. These landlocked countries have suffered the most, and continue to do so. However, landlocked countries believe they have to wait for the fibre to get to them before they start building their own in-country infrastructure. I am of the view that they have to start building aggressively so that by the time the fibre reaches them, their metro and access infrastructure is already in place. It is all about having dialogue and facilitating a shift in thinking.

TowerXchange: How is both technology and the sophistication in the rollout and management of fibre changing?

In other parts of the world there is sophisticated machinery that deploys fibre optic infrastructure, however in Africa traditional labour is still the preferred method of construction. This is mainly because the continent has access to labour and using physical labour creates jobs. We often want to make this conversation one which is highly technical and sophisticated, however at the core of it things are really simple. The fact is that we live on a continent with high levels of unemployment and poverty and employing a person, rather than a machine, will always be the preferred method. Having said this, in the access market technologies such as micro trenching has many benefits. It still requires a fair amount of labour but is much faster and cleaner. It requires serious consideration by local authorities.

TowerXchange: How do you see fibre as complimenting/ competing with wireless mobile communications? What is your reasoning for this?

Mobile communication has never competed with FTTH and visa versa. These two technologies both offer value propositions and facilitate different aspects of life and fulfil different needs.

Where FTTH will provide us with truly smart homes, mobile infrastructure provides us with an always on, always available lifestyle. It has taken a long time to shift the thinking in industry because people are naturally competitive and therefore they want an ‘either/or’ answer. But we all know that the ultimate reality is that these technologies are symbiotic in their relationship and inseparable. They are different but the same.

The things we should really be concerned about is to provide consumers with a consistent experience. They do not want varying speeds, irrespective of whether they are on the road, or at home. They want constant quality of service – and it should be a seamless hand-off from one medium to the other. The device in their hands will rule their worlds and understanding this will separate one company from the next.

TowerXchange: There have been talks amongst towercos of starting to diversify into fibre - do you feel this is a natural step? 

I believe it is a very natural next step. Years ago mobile operators disregarded fibre as non-core business possibly due to the fact that they were mobile focussed and undermined fixed line infrastructure, add to this a drop of complacency and today we have very big telecoms companies that are built on the back of ‘mobile backhaul contracts’. However, as mentioned before, fibre and mobile cannot be separated. They are both physical layers in the network and both are needed in the delivery of high speed broadband. Tower companies with fibre to the tower are more attractive to operators since they have unlimited capacity. They can either outsource the build and ownership, or do it themselves.

Demand is not slowing down and therefore I think that this question has been answered. Ten years from now you can own your own mobile backhaul, or you can still be paying someone else. The fact is that the conversation is more complex and includes a discussion on whether tower companies are possibly in one of the best positions to provide FTTH for their clients.

Operators are now focussed on capturing ‘the client’ on a turnkey basis. They want to own their clients’ end to end connectivity needs – whether they are at home or on the go. This opens the door for towercos to provide them with a turnkey solution. And they understand infrastructure - it makes perfect sense.

TowerXchange: What do you see as the long term business model(s) for sharing fibre?

This is another reason why towercos are perfectly geared for this industry. Fibre sharing is based on the same principle as tower sharing and economies of scale is what makes it viable. At the core of matters we are simply talking open access – a principle that is becoming the norm. This moves competition off the infrastructure layer to services - a big win for infrastructure providers. Other things to consider are becoming providers of dark air – or open access ducts - especially in green field environments.