Fibre changes (almost) everything

21 May, 2018

“Don’t start the revolution without me,” is often used in tales of political and social disruption throughout history. It also seems to be the mantra of South African businesses, leaping on the bandwagon of the connectivity revolution sweeping the country.

The latest edition of SME Survey, a research project that World Wide Worx has been conducting since 2003, reveals that technology history is repeating itself. Small and medium enterprises are abandoning older and less efficient technologies for what appears to be the new cutting edge.

Back in 2003, ADSL had just arrived in South Africa and seemed the answer to the prayers of many small businesses that had previously relied on dial-up for Internet access. That year, more than 60% of SMEs were dependent on this ancient technology. Almost overnight dial-up vanished and ADSL took its place.

ADSL penetration peaked at 73% in 2009 and remained at that level until 2015, when fibre arrived in a big way. Companies began connecting the suburbs with fibre-to-the-home, which was quickly repurposed as fibre-to-the-office by SMEs.

A picture of a woman blown away - Nashua banner

According to SME Survey 2018, the impact has been almost instant. ADSL penetration has dropped back to 56%, while fibre has leaped to 25% in just three years. This means that the technology replacement of fibre over ADSL is happening even faster than ever.

Such rapid adoption is being brought about both by the quick spread of fibre across urban areas, and the falling price of the technology.

The cost to speed relationship is vastly improved, while the quality of the connection is also higher, since fibre doesn’t have the same level of contention as ADSL. This means, generally speaking, the speed you buy is the speed you get.

Perhaps the most important factor is that any service provider can supply connectivity and services over fibre, while ADSL is confined to a single provider. This diversity has clearly helped open the market.

Aside from these supply-side factors, the key benefit from switching to fibre is that it removes almost all the performance constraints businesses may have faced before. This means that their communications are significantly improved and it gives them more confidence in using the Internet for transactional purposes, thanks to the quality and speed of the connectivity.

Coupled with much higher bandwidth caps, this opens these businesses to greater levels of collaboration and a range of new business possibilities. Ultimately, it expands their vision, and levels the playing fields with large organisations in terms of access and collaboration. Once SMEs get to grips with the many possibilities offered by fibre, they will be more confident in aiming for a higher digital level and will more fully embrace cloud platforms and solutions.

There is, of course, one fundamental drawback to fibre. It cannot run on existing connections and requires entirely new infrastructure. This means that much of the cost of installing fibre lies in the trenching needed to lay down conduits along roads and sidewalks.

In cities and suburbs, it makes economic sense. The viability revolves around a simple equation: number of houses or offices passed. However, in rural and even outlying areas of cities, fibre simply makes no business sense. However, that doesn’t mean the appetite for similar levels of connectivity is diminished in those areas.

Innovative service providers like Nashua together with SkyWire Technologies have been addressing that appetite for several years now, bringing fibre-like connectivity to small towns through wireless, fixed and satellite connectivity solutions. SkyWire has more than 50 000 wireless high sites around South Africa and peering points throughout the country. This allows Nashua to provide last mile access wherever businesses are located.

In outlying regions, SkyWIre connects a main tower via fibre, and then uses microwave to extend the signal to all other towers in the region, where no fibre is available.

This means that, even far beyond the reach of fibre, such isolated businesses can also now join the revolution.

Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Follow him on Twitter on @art2gee and on YouTube.