i3 Africa announces plans to connect 2.5 million homes to fibre within five years

10 Mar 2011

According to TechCentral i3 Africa, a new company backed by the National Empowerment Fund, has announced plans to build a fibre-to-the-home (FTTH) network connecting up to 2.5 million homes within the next four to five years. The network, which is set to be built in six cities — Durban, Cape Town, Johannesburg, Port Elizabeth, Bloemfontein and Pretoria — promises to provide customers with minimum connection speeds of 100Mbps. The network will operate on an ‘open-access’ principle, allowing third-party internet service providers (ISPs) to sell services to consumers; i3 Africa will not sell services directly to customers.

CEO Cornelius Groesbeek told TechCentral that the company will spend between ZAR5 billion (USD725.4 million) and ZAR6 billion on the network — approximately one-third of the cost usually associated with a FTTH rollout. i3 Africa plans to make savings by utilising metropolitan sewerage and water networks, negating the need for expensive civil works. i3 Africa has selected Durban to house a pilot network, and work on a 100km stretch is already underway. Upon completion, the Durban leg will consist of 2,500km worth of access fibre and a further 7,500km of FTTH/FTTB. Groesbeek commented: ‘We’ve decided to focus first on Durban, which has a history of being an early adopter of innovative technologies, but we are engaging with everyone. We will have all that done during 2012, and sometime next year we will start on the core network in a second city’. A commercial rollout is planned from mid-2011.

In line with its business model in other countries, i3 Africa consists of two subsidiaries: H2O networks, which will build the physical network, and Fibre City, which will manage the infrastructure and billing systems on behalf of the ISPs. UK-based i3 Group reportedly holds a 15% stake in i3 Africa, alongside an assortment of local investors, including Martin Cele (former CEO of Durban-based business incubator SmartXchange) and investment banker Craig Carthy. CEO Cornelius Groesbeek and chairman Andrew Mthembu are already involved within the country’s telecommunications sector as non-executive directors of existing wholesale provider Broadband Infraco. Groesbeek and Mthembu have reportedly declared their plans to Infraco, stressing that there will be no conflict of interests, as Infraco focuses exclusively on national long-distance and international connectivity.

TeleGeography notes that despite successful FTTH rollouts in the United States, Europe, Australia and New Zealand, the i3 Group’s UK-based operations were a resounding failure, with the inaugural rollout in Bournemouth cancelled in 2010 after Bournemouth Borough Council objected to the reckless damage being caused to the city’s sewerage infrastructure. In January 2011 i3’s UK subsidiaries – which included Fibrecity Holdings, H2O Networks, Opencity Media and Wireless Network Systems were sold to City Fibre Holdings for an unspecified amount. It is unclear whether mooted rollouts, in Dundee, Plymouth, Derby and York will still take place.

South Africa, i3 Group (Fibrezone),

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