His Masters choice — South Africa’s cable monopoly scam exposed

If you’re a broadband nut, then you may not be the first to remark about the absurdity of space-age fibre optic cables sitting under the curb while the nation’s domestic broadband infrastructure continues to be delivered via old-fashioned copper cable and wireless technology which can only deliver a fraction of the bandwidth and speed.

Neotel has finally come clean about its failure to compete against Telkom. A story carried by technews site Myadsl reveals how the company no longer regards itself as the “Second Network Operator” owning up to a flawed tender process in which it appears to have duped the public —  flouting licensing conditions granted by telecoms regulator ICASA.

According to MyADSL, “Neotel said that unrealistic expectations may have been created with the term SNO (second national operator), with consumers expecting them to become a ‘Telkom 2’“. Telkom is the equivalent of the American Bell Telegraph company — instead of being broken up to allow for competition the apartheid-era monopoly was simply shifted into the hands of the ruling ANC party elite where its directors continue to enjoy privileged market access.

“Many consumers feel that Neotel has failed in their ‘duty’ to take on Telkom and provide South Africans with a true alternative to Telkom in the broadband and telecoms market.

“As South Africa’s ‘Second National Operator’ (SNO) many consumers pinned their hopes on Neotel to roll out fixed line broadband services and force Telkom to react in an aggressive manner. This did not happen.”

Initially billed as the “Second Network Operator” by telecoms regulator ICASA, (see these archived pages here and here)  the company received an SNO license from the regulator which presumably would have meant it had a mandate to roll-out last-mile cable access to consumers in competition to Telkom.

Hertzog, No Television
Ivy Matsepe-Casaburri - No Broadband

Instead Neotel became involved in the lucrative international cable sector while Telkom hummed and hawed about the “unbundling of the local loop”. The SNO credits its “direct involvement in undersea cable systems like SEACOM, EASSy and WACS” for having brought more competition to the international bandwidth market to ” significantly drive down prices” at the first and second tier level. In some respects this is all true, the former Nationalist party controlled telecoms company MWEB recently announced uncapped broadband and bandwidth pricing in line with the rest of the world.

South Africa has a history of slow adoption of technology as a result of political interference. Television for example was only adopted in 1976 because of the machinations of Minister of Post and Telecommunication Albert Hertzog and the country rolled out uncapped broadband some 15 years after its emergence in the developed world because of obstruction by successive ANC telecoms ministers.

Now Neotel wishes to revise its mandate as South Africa’s first “converged network company” which begs the question, if Neotel is no longer the SNO, then who is and will there ever be competition outside of the party logjam?

Compared to the highly competitive consumer wireless sector, domestic cable has essentially remained a monopoly of the ANC’s Telkom. Most service providers blame Telkom for poor quality of service and last-mile access remains well-below other countries with the same GINI coefficient.


ADSL, ADSL2 and ADSL2+ are originally copper technologies. http://en.wikipedia.org/wiki/Asymmetric_Digital_Subscriber_Line

The A in ADSL is for “assymetric”, referring to the way the limited frequency spectrum is used on a copper wire to increase modulation speed in one direction while limiting it in the other direction. Your old 56k modem worked in the same way (looking up the V.90 standard is left as an exercise to the reader).

Fibre does not have this limitation and typically runs fully symmetrical. The high speeds achievable over fibre far exceed the 100Mbit/sec restriction of copper. Speeds of 10Gbits/sec are commonly available over multi-mode fibre, while lab-tested transmission speeds have achived terrabit speeds over several hundreds of kilometers: http://en.wikipedia.org/wiki/Fiber-optic_communication

From: http://mybroadband.co.za/vb/archive/index.php/t-233767.html

There is a concept known as ADSL over fibre, but it refers to the way in which traffic is carried to the end-point equipment and does not employ fibre for the last mile. For example IS have ADSL over fibre, but it refers to ADSL connectivity (copper) getting it’s bandwidth via international fibre links (as opposed to satellite).

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