A new high-speed broadband network provider, Octotel has started offering its Fiber to the home networks in Cape Town. Octotel founded by Joe Botha and Michael Pollock plans to offer broadband speeds of up to 1 Gigabits per second. The new provider will start its operation by offering its services in the upmarket Atlantic seaboard suburbs of Sea Point, Bantry Bay, Moille Point, Three Anchor Bay, Green Point, and Fresnay.
South Africa’s communication sector was monopolized by the state-owned Telkom until recently. The legislation was passed by the government that allowed all licensed telecommunications providers to build their own fixed-line networks. This legislation opened opportunities for companies such as Vodacom, MTN South Africa and Neotel to construct their own country and city-wide fiber optic networks. South African cities such as Cape Town, Durban, Johannesburg, and Pretoria are also in the process of or have completed construction of city-owned fiber optic networks. These will provide services to the city and government-owned establishments and will act as an extra source of income through the sale of excess bandwidth mainly to companies.
Wireless options are available from Sentech, iBurst, Vodacom, MTN, Cell C, Telkom and a number of other ISP’s. They typically provide speeds of up to 7.6 Mbit/s with HSDPA. HSUPA is also available. MTN South Africa was among the very first mobile networks in the world to offer HSDPA services to its customers. Satellite options are available from both Sentech and Telkom.
The Internet user base in South Africa increased from 2.4 million in 2000, to 5 million in 2008, and to 12.3 million in 2012. This represents 34% of the South African population in 2012. This is the highest penetration for all African countries except for Morocco (55%) and Egypt (44%).
Octotel’s entry to the broadband market will make the South African communication business more vibrant by placing themselves as competent service providers in front of potential customers. Octotel offers a 10 Mbps service for prices starting at R499/mont including the line fee and Internet service provider charges.
Octotel offers an alternative to Telkom’s aging and highly congested ADSL network. Octotel rolls out its fiber network in partnership with the community and local Internet service providers using an open-access business model. Octotel business model in fiber optic business is one of a number of FTTH start-ups hoping to challenge the established order in fixed-line telecommunications in South Africa.
Octotel’s entrepreneurs Botha and Pollock has years of experience in the technology business. Joe Botha was chairman of the Wireless Access Providers’ Association for three years and served on the management committee of the Internet Service Providers’ Association. He has built, invested in and run a number of businesses in the telecoms sector. Michael Pollock has a background in accounting and finance, with experience in managing large corporate accounts and various global trading platforms.
Octotel will only operate and maintain the fiber optic infrastructure. Octotel will act as a utility and will not sell Internet service (data and voice). Internet services are provided by ISPs like MWeb, WebAfrica, and RSAWeb. This is an open-access business model in telecommunication.
The Atlantic seaboard is a highly populated area in Cape Town, with many high-rise buildings. Octotel intends to offer fiber optic cabling to each floor in a building along with free high-speed connectivity for remote CCTV and security monitoring.
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