Huge jump in South African bandwidth is on the way, and cost cuts too
South Africa is a laggard when it comes to the internet. There are a number of reasons for this – there are too few cables connecting Africa to the rest of the world, too little hardline infrastructure to route high-speed internet along, too much inefficiency as a result of the uncompetitive telecommunications sector and so on. The bottom line, however, is that internet in South Africa is much too slow. However, that could be changing very soon Internet Solutions is rolling out a new technology platform that could exponentially increase internet speeds and reduce costs. This would be great. The impact of the internet on economies is tricky to quantify, but in the rich world the internet now accounts for about 4% of global GDP (although I think trying to measure this is very dubious). With faster internet, South Africa should see new business opportunities (Netflix, baby), and a dramatic improvement in productivity. Here's hoping! – FD
GUGULETHU MFUPHI: Infinera and Internet Solutions are deploying the new Infinera DTNX Platform across the company's local, long-distance network. Prenesh Padayachee, Chief Technology Officer at Internet Solutions, joins us now for more. I tried to sound smart there, and as though I know what I'm talking about, because Alec…
ALEC HOGG: No, you're too good.
GUGULETHU MFUPHI: I tried.
ALEC HOGG: Except you tried and fluffed, halfway between local and…but up to that point, I thought, "My goodness, Gugu".
GUGULETHU MFUPHI: Hey.
ALEC HOGG: You must have practiced that.
PRENESH PADAYACHEE: It sounded good.
ALEC HOGG: But if you're on the technology side, do you speak English? Can you speak English to us now? Tell us what is this…? The reason you are sitting here, is clearly you've convinced someone at CNBC Africa that this is a world breaker. It's the first in Africa; we saw that, but what is it going to do?
PRENESH PADAYACHEE: Alec, I think it's a phenomenal time for both South Africa and the African Continent and what we've done is you know, we've had this conversation for so long now that there are bandwidth constraints across the African Continent, across South Africa, and we've deployed technology now that allows us to overcome those bandwidth constraints. The Infinera platform that we've deployed, allows us to turn up vast amounts of bandwidth in very short periods of time.
ALEC HOGG: How – in nice and simple stuff, because we have all of this bandwidth coming into this continent, we know – but what makes this different? Why haven't we been able to deploy it, as you say?
PRENESH PADAYACHEE: We've had the ability to have bandwidth in the country, from a national perspective, but as technology evolved – and especially in this sector, technology evolves very quickly – we now have the ability to turn up huge… If I just give you a stat on this, if you look at all the international or internet bandwidth in 2005, we have the ability now, on one of these platforms to have more bandwidth than we had in 2005, on the internet. That is kind of the perspective, and this is globally.
ALEC HOGG: And how many platforms do you have?
PRENESH PADAYACHEE: So on this we've built it across the South African network, from Johannesburg via Bloemfontein, into Cape Town, as well as from Bloemfontein to East London, and we look to expand that to all sort of major, major centres.
ALEC HOGG: Nothing in Durban?
PRENESH PADAYACHEE: Not yet.
ALEC HOGG: What's wrong with you guys?
PRENESH PADAYACHEE: We're getting there.
GUGULETHU MFUPHI: But in the long run, what does this mean, before we get to the move to Durban? Alec is a KZN boy…
ALEC HOGG: We're both from KZN, I'll have you know. Prenesh, you've come into the lion's den here. You give it to Bloem but you don't give it to Durban.
PRENESH PADAYACHEE: So what does it give us in the long run? For one, I think, as we move much more into the social media area of the internet with many people downloading videos, and as regulation changes, and we may need to have the ability to do much more from a replication perspective. For example, have different sites across the country, so we can avert disasters in the electronic age. This gives us that ability to have vast amounts of bandwidth to make it seamless to anyone to upload movies to watch. If you take the CNBC Show, the ability to watch this online, on your PC, without having that dreaded buffering – that circle of death, as people call it, when you are waiting for your video to download – all those things become a thing of the past. I think we're moving now to an era where we are starting to see the ability where Last Mile Access – access to your home, the DSL access that we currently have – those are going into the levels of 40 megs to a 100 megs. The ability to get fibre into a business these days is much easier then what it used to be etcetera. As that Last Mile Access becomes much greater than what it used to be a few years ago, you need to have the ability across the country to transport that traffic wherever you want to do that.
ALEC HOGG: So it's like the big pipes of the plumbing.
PRENESH PADAYACHEE: It's huge. It's massive, massive plumbing.
ALEC HOGG: And what are the cost implications for users?
PRENESH PADAYACHEE: For users themselves… Since the cost implications aren't linear when you start to look at how we scale the platform, this is why we've bought a platform, which allows us to scale to huge amounts of bandwidth, without having to add additional components to it. The cost implications are not going to be a linear scale as you increase bandwidth to what the cost of putting that bandwidth in place is. It's very dissimilar to what we had previously where we had the old 64K lines that we used to operate on etcetera. In those scenarios, you needed a timeslot for every 64K link that you…
ALEC HOGG: Just keep it nice and simple. In 2005 was the base year you started using. Just explain what the internet was like, or what bandwidth was like there and what it's now going to be like after this DTNX has been implemented.
PRENESH PADAYACHEE: What was bandwidth like…so let me give you another stat on that. We all enjoy watching HD videos these days. To put it in perspective, in 2005, for you to watch an HD video would have probably taken you close to half the day to download that video. In the platform that we've deployed today you can watch one-point-two million HD videos at the same time, across the one platform.
ALEC HOGG: Extraordinary.
PRENESH PADAYACHEE: That is what we're bringing to the area.
ALEC HOGG: So what's this going to do to business in South Africa, the internet businesses? Mushroom.
PRENESH PADAYACHEE: So internet business, I think most business in South Africa, many businesses are moving into that online era and I think what's going to happen is, for one, there's two things, which I think are going to happen. We are providing a network, which is hectically reliable.
ALEC HOGG: That's hectically reliable…
PRENESH PADAYACHEE: It's reliable.
ALEC HOGG: It's an oxymoron.
GUGULETHU MFUPHI: So what happens when Seacom is down because that used to happen at our old company? I know it well.
ALEC HOGG: So it's hectically reliable.
PRENESH PADAYACHEE: For business in South Africa, as we move into this online era, we have a reliable network with lots of bandwidth that we are throwing at the problem. As South Africa becomes much more of the digital online economy, we will start to see that we wouldn't be seen as the last outpost in the internet economy, as Africa is generally seen as.
ALEC HOGG: So what did you say about Seacom?
PRENESH PADAYACHEE: With Seacom going down… From an internet solutions perspective, we have access to all the undersea cables in South Africa, so if you look at the wax cable system – the SAT3, the Seacom, and the Easy Cable Systems – we have access to all of those, and we have had access to those for a long period of time. What we are starting to do now is, we are starting to look at the national network and saying, "Let's get all these large economic areas connected together", so we can get access from there, from those economic areas, onto the undersea cable systems and that really takes us into the digital economy.
GUGULETHU MFUPHI: One of those economic hubs is one that Alec is very passionate about – Durban. Why aren't we there yet?
PRENESH PADAYACHEE: So the reason we aren't in Durban yet is the routes that we're currently have built, those were the areas that we needed to get to. Part of the reason for that was that the International Landing Station for the West Coast cables, is Cape Town, and with Johannesburg being the economic hub of South Africa, we needed to connect those two points. We are currently in planning exercise to connect Durban and other areas in South Africa, so if you look at Durban and Port Elizabeth and those types of areas, we look at connecting those as well. The reason for going down to East London was that at some stage we'd split the country up into two. We then have these configurations that allow us, from a resiliency perspective…should we have cable breaks between, as an example, Bloemfontein and Cape Town, we'd be able to route on the coastal route to get back to Johannesburg.
ALEC HOGG: It sounds great. Prenesh, we want to know when we can access this high bandwidth and when we can watch CNBC Power Lunch from home.
PRENESH PADAYACHEE: You can access this high bandwidth today. This network has been running since December, so we've had test traffic on this.
ALEC HOGG: Only through IS, though?
PRENESH PADAYACHEE: Only through IS.
ALEC HOGG: So if you have a Telkom connection – tough luck.
PRENESH PADAYACHEE: If you have a Telkom connection, as your Last Mile Access, then you'll have it, as long as it's a high bandwidth Last Mile Access.
ALEC HOGG: I have your connection. I want to know if it's going to come down. I have this in our office.
PRENESH PADAYACHEE: Do you want to know if…?
ALEC HOGG: If my price is going to come down and I can get more bandwidth. You put these wonderful new technologies in and everybody loves them, but what does that mean to your pocket?
PRENESH PADAYACHEE: That's the reason for investing in this platform. Part of the reason, I think prices have escalated as much as they have is by investing in the wrong platforms. When you get to the higher bandwidth levels, you need to upgrade the platform. We've said that we want to try and future-proof this platform, so let's invest in the right infrastructure now. As I said earlier on, when you increase bandwidth, it isn't a linear increase in costs, as you increase bandwidth, so those prices will come down. What we need to get to though is the Last Mile, or the Access. So let me just explain Last Mile, since you asked. It's what you have between your home and your business, and wherever your service provider is.
GUGULETHU MFUPHI: Hence, the local loop unbundling case.
PRENESH PADAYACHEE: Well, the local loop unbundling will be part of that exercise. However, I think more importantly, the proliferation of fibre in the Metro areas, and as we move out to the secondary Metro's as well, that will definitely help. As we have fibre access, we move away from the constraints of copper access that we're accustomed to. We can put loads of bandwidth onto fibre and that's what this network is built on.