The fibre-to-the-home revolution that has swept suburban South Africa is about to arrive in the country’s townships, writes ARTHUR GOLDSTUCK.
Fibre-to-the-home is this decade’s magic ingredient for high-speed, painless and unlimited Internet access. But, until now, it has been the province of the privileged. Only the more affluent suburbs of South Africa’s cities have been afforded the luxury of the dedicated optical fibre cables that typically run in trenches along leafy sidewalks.
That is about to change.
Vumatel, the company that sparked the FTTH revolution when it won a contract to supply fibre to the suburb of Parkhurst, is at it again. This time, it plans to connect the townships of South Africa. It has come up with a low-cost alternative to wiring dense suburbs, and intends to offer uncapped high-speed broadband for a mere R89 a month.
To put that in context, the average spend on a cellphone in lower socio-economic segments is typically around R100. Fibre, coupled with in-home Wi-Fi, can replace a large chunk of cellular spend by moving voice traffic from the mobile networks to voice over WhatsApp and Facebook Messenger, among other. All data use in the home would move off the expensive data services provided by the mobile operators.
With wide-scale roll-out, this could prove immensely damaging to the operators. More significantly and to the point, however, it could prove immensely beneficial to those who have previously been kept away from the largesse of high-speed, unlimited access.
The Vumatel service will offer a 100Mbps download and 10Mbps upload speed, which typically costs more than a R1000 a month in more affluent suburbs. How is it possible, then, to offer it at a mere R89 a month?
Only with a great deal of commitment to finding an affordable broadband solution for the mass-market.
“We think that the FTTH deployments as we and other operators are doing them are great for the country, because we are moving connectivity forward at a macro level,” says Vumatel CEO Niel Schoeman. “But it is clearly not addressing the information divide between the less fortunate and the leafy suburbs, and potentially exacerbates inequality in terms of information access.
“We’ve been trying to come up with a solution to address townships, to provide that abundance of information to residents of townships. We think we can do it by providing it at R89 a month for a 100Mbps uncapped service. We think that is fundamentally different to a 500MB data allocation on a prepaid service, which has been the only kind of option for connectivity.”
Vumatel will initially roll out the service in the Johannesburg township of Alexandra, with an estimated 400 000 residents in the target area.
“That is our township equivalent of the announcement that we were connecting Parkhurst. We’re going to give it a go between now and March.”
The question remains: how is such low cost possible on a business level?
On the surface, the answer lies in Vumatel’s October 2016 acquisition of Fibrehoods, a provider of aerial fibre similar to overhead telephone lines. However, that in itself would not cut the costs so radically. Until recently, Fibrehoods had also been serving wealthier suburbs.
“Clearly, to make that price point work, we need to work hard at the capital cost of deployment,” says Schoeman. “The topography of townships doesn’t lend itself to the typical buried, trenched solution, so we’ll use aerial fibre.
“The price is possible thanks to a combination of technologies , the potential number of customers per square kilometre, and the fact that it will also be potentially contended up to 20 times, meaning 20 customers will use the same 100Mbps line. So each customer is always guaranteed 5Mbps upward, but the probability of getting more like a 20Mbps service is high. Not everyone will be using the same line at the same time.”
Vumatel will also use its fibre to provide Wi-Fi in public spaces in the townships. This service will be possible, partly, thanks to corporate social investment from its 49% shareholder, Investec.
“We’ve looked at a broader Wi-Fi deployment model, but we don’t think it creates the abundance that closes the digital gap,” says Schoeman. “You can use the analogy of water: Wi-Fi hotspots create wells where people can collect water whereas, if you provide piped water to homes, you see people growing gardens and using it in an unlimited way. We want to go deep into every home, uncapped, at high speed, and see if we can make a difference.”
Unlike the suburban model, where Vumatel lays down the fibre and leaves it to Internet Service Providers to deliver access, it will initially provide access itself. It will piggyback on the Dark Fibre Africa grid that will link it to the broader Internet and undersea cables, but will acquire and distribute access and data services itself.
“We first want to see if we can make the model work rather than having to add additional margins for service providers. Our philosophy is always open access so, if it works, we will see if we can let service providers offere innovative services.”
Schoeman believes the eventual fibre market for all service providers will be as much as 35-million. He says it will be possible for Vumatel to bring fibre within reach of another 10-million people in the next couple of years, at a cost of between R2-billion and R3-billion.
“We want to see if we can kick off another catalyst event like Parkhurst, and start a storm: to see if we bring abundant connectivity to low income homes.”
Smart grids needed for Africa’s utilities
Power utilities across Africa should rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem, says COLIN BEANEY, Global Industry Director for Asset-intensive and Energy and Utilities at IFS.
Africa’s abundant natural resources and urgent need for power mean that it is one of the most exciting and innovative energy markets in a world that is moving rapidly towards clean, renewable energy sources. The continent’s energy industry is taking new approaches to providing unserved and underserved communities with access to power, with an emphasis on smart technologies and greener energy sources.
Power systems are evolving from centralised, top-down systems as interest in off-grid technology grows among African businesses and consumers. And according to PwC, we will see installed power capacity rise from 2012’s 90GW to 380GW in 2040 in sub-Saharan Africa. Power utilities are needing to rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem.
Energy and utilities providers are transforming from centralised supply companies to more distributed, bi-directional service providers. They can only achieve this through the evolution of “smart grids” where sensors and smart meters will be able to provide the consumer with a more granular level of detail of power usage. This shift from an energy supplier to “lifestyle provider” will require a much more dynamic and optimised approach to maintenance and field service.
African companies must thus embrace digital transformation as an imperative. This transformation begins by embracing enterprise asset management to improve asset utilisation. The subsequent steps are enhancing upstream and downstream supply chain management; resource optimisation; introducing enterprise operational intelligence; embracing new technologies such as the Internet of Things, machine learning, and predictive maintenance; and becoming a smart utility.
Embracing mobility to drive ROI
Getting it right is about putting in place an enterprise backbone that accommodates asset and project management, multinational languages and currencies, new energies and markets, visualisation of the entire value chain, and mobility apps. Mobile technologies that support the field workforce have a vital role to play in driving better ROI from utilities’ investments in enterprise asset management and enterprise resource planning solutions.
Today’s leading enterprise asset management solutions feature powerful functionality for mobile management of the complete workflow of work orders – from logging status changes and updates, from receiving and creating new orders to concluding the job and reporting time, material and expenses. Such solutions are easy to deploy and intuitive for end users to learn and use.
Importantly for organisations operating in parts of the continent with poor telecoms infrastructure, connectivity is not an issue. The solutions work offline and synchronises when network connectivity is available. Users can work on any device—laptops, tablets, and smartphones—commercial or ruggedised.
By ensuring that field technicians have easy access to information and processes, the mobile solution enables technicians and maintenance engineers to easily do the following tasks:
· Create a new work order on the fly and log new opportunities
· Access both historical and planned work information when requested
· Permit customers to sign when the job is completed
· Capture measurements and inspection notes on route work orders
· Create new fault reports on routing
· Facilitate documentation through photo capturing
· Provide easy access to technical data and preventive actions.
The power of mobility allows the engineer to be the origin of all data capture on a service event. They can easily inquire on asset history, record parts used or parts needed for repair, record labour hours, and expenses as they occur, and any notes of repairs performed. When coupled with workforce management tools, such solutions unlock significant productivity gains for utilities who are trying to get the most from their workforce and assets.
Brands fall for app vanity
The experience of a mobile screen full of icons, representing independent apps that your need to open to experience them, is making less sense. Instead, businesses should serve customers with an ‘app-like’ experience inside the digital platform they already use, says PIETER DE VILLIERS, Group CEO at Clickatell.
Many brands remain obsessed with creating mobile apps. This not only defies trends that point to increasing consumer app apathy, but can exclude a sizeable portion of your customers in emerging economies. Companies need to engage with their users where they are rather than forcing them onto an app, in what can only be described as brand vanity.
In 2017 there were around 2.2 million apps available in the iOS app store and over 3 million on Google Play. And, while the number of apps being downloaded continues to rise, analysis shows that consumers are only using 30 apps per month and accessing just 9 on a day-to-day basis.
While these numbers still seem attractively high, in reality the majority of the apps we use are for messaging (like Facebook Messenger, WhatsApp, and WeChat) and our social networking, gaming, leisure, dating or utility activities.
Despite the facts, the application strategy as the holy grail for digital transformation is still being pushed even within large progressive brands. What’s more, some advertising agencies and digital consultants are still pushing apps as the best means for companies to connect with their customers. This has resulted in some organisations stubbornly doubling down on app strategies which are simply not showing return on investment (ROI).
It’s not immediately clear to us whether the fascination with apps is a roll-over from long overdue projects or whether brand owners equate a mobile-first strategy with a mobile app. Mobile-first in 2018 means customer first, and therefore embracing chat commerce in order to deliver services with convenience and simplicity in mind.
Why apps won’t win the internet
The problem with apps goes beyond user fatigue. In the first instance, many apps are poorly designed, assuming technical sophistication which may not match reality for the average customer. Poor user interfaces and attempts to provide complex engagement can result in even the best ideas missing their targets due to lack of engagement.
Secondly, we all know that economic realities drive consumer behaviour. In Africa, new mobile phone users typically opt for feature phones over smartphones. With a longer battery life and a much more accessible price point, feature phones still allow for a basic internet connection, chat platforms like WhatsApp, and call and message functionality. In these regions, the cost of an app – even if it’s free – goes far beyond installing it. Constant updates require reliable and cheap access to the internet. For the average phone owner in an emerging market, this can be a serious challenge.
Thirdly, and most importantly, apps must be relevant to their intended market. Frequency of usage is a key measure of relevance.
Apps which are used on a daily basis, like health and fitness trackers, enjoy constant engagement. New features which are added are eagerly awaited by users who are happy to update their apps.
However, users may well question the relevance of the app if they are required to conduct updates on a monthly or even weekly basis when they are only making use of the app once or twice a year.
On average, I download one app per quarter. Some I use more frequently than others, but all of these apps need to be regularly updated to maintain security, update features, and fix bugs. Many apps are pushing out updates much more frequently. I noticed over the past year that I could go from having all apps updated, to 32 apps requiring an update in five days.
When it comes to a customer-first digital strategy, companies should be asking themselves if an app is really the best way to reach their target audience.
In fact, at the end of 2016, Gartner predicted that by 2019, 20 percent of brands would ditch their mobile app. What’s more, in its 2018 predictions, the company forecast that by 2021, more than 50 percent of corporations would spend more per annum on bots and chatbots than on mobile app development.
So, we need to ask, what is the alternative for CIOs, CDOs, CMOs, and digital leaders who are looking for ways to reach, retain and grow their customer base?
The logical app alternative
The old battle advice goes: fight your enemy where they are not. Military strategists agreed that having your enemy come to you and fight you on your own terms was preferable. In a world where customers have access to thousands of offerings and millions of deals online, we need to flip that idea to Meet Your Customers Where They Are.
Any marketeer will tell you just a how difficult it is to drive app downloads. Development, cross platform testing and user interface aside, the marketing campaign required to get customers to download the app can swallow entire annual budgets and still come up short.
Looking at the facts, it makes infinitely more sense to work within the digital platforms already being used by your target audience.
Clickatell is already enabling chat commerce for some of the leading global brands with its Touch solution. This allows organisations to serve their customers with an ‘app-like’ experience inside the chat or browser platform of their customer’s choice (Twitter, Facebook Messenger, etc.)
Brands can now send an actionable Touch link such as ‘find the nearest ATM’ or ‘reset my password’ within a chat stream that will open an intuitive touch card without the user having to download an app to perform the action. Services can also be linked to the in-app experience for brands not looking to abandon their app efforts.
Working with our clients, many of whom are global innovators and thought leaders, we’ve found that having the courage to design with an ‘end user first’ approach and dealing with the back-end complexity behind the scenes results in cost efficient customer delight and ROI.