It was one of the great train smashes of Internet services in South Africa. Now it may just give rise to one of the great success stories.
When iBurst launched in this country more than a decade ago, it promised to change the face of wireless broadband with a new kind of connectivity technology. However, a technology that was once revolutionary was eventually derailed, as its development ended.
Connection speed stalled, service levels declined, and growth fell off the cliff. As a result, it surprised some when the holding company for iBurst, Wireless Business Solutions (WBS), was bought by convergence technology company Multisource last year.
However, it was clear that it was being bought not for its 60 000-strong subscriber base, but for its license to use radio frequency spectrum in the 1,8GHz and 2,6GHz bands – ideal for high-speed mobile broadband. It was also clear that the ownership of WBS, chaired by FirstRand founder Paul Harris, was focused on opening up this potential goldmine.
This week, Multisource removed the invisibility cloak from its iBurst plans. Harris announced a multi-billion Rand investment in a new high-speed national data network using LTE-Advanced (LTE-A) technology.
Current versions of LTE are still regarded as a form of 3G, while LTE-A is regarded as the minimum to describe a network as 4G. Because of the failure of the regulator, Icasa, to allocate additional spectrum in these bands, other operators have to “refarm” spectrum from inappropriate bands to offer a half-baked version of 4G.
This means, in effect, that WBS is likely to become the first entirely 4G data network in South Africa. Its aggressive strategy is also likely to be enhanced by WBS’s roaming agreements with other mobile networks. In other words, an MTN or Vodacom could partner with WBS to get access to full 4G. That also means they could well dip into their own pockets to assist WBS in building out its network.
“Our initial focus is fixed-mobile (like LTE-A enabled WiFi routers) and we will target customers in geographies where we have our own kit and do not need to roam on other networks,” said Michael Jordaan, former First National Bank CEO and a key investor in WBS, in an interview this week. However, he pointed to a company statement that acknowledged: “Roaming is standard practice in the industry with most telcos roaming on each other’s networks.”
He would not be drawn on specifics, saying that roaming agreements were confidential commercial agreements between operators. However “where appropriate, WBS will enter such arrangements.”
“It will take time to roll out a nationwide network,” he said. “We hope to get to 10 000 sites over five years, but will start in high-density geographic areas like Joburg and Cape Town. It means that the initial target market will be fixed-mobile rather than smartphones, as that would require either a national network or a roaming agreement.”
According to Harris, the strategy was partly a response to South Africa’s need for investment in productive capacity to tackle its economic challenges: “Nothing can be gained by sitting on the sidelines. WBS’s investment is a manifestation of its confidence in South Africa and its desire to contribute.”
WBS is looking into the long-term future as well, saying that the network will be enabled to use 5G when the technology is rolled out internationally in the next 5 years, and “will place South Africa amongst the leaders in the field”.
The company says a limited number of sites are already in operation and existing WBS customers will be converted to the new network, migrating from an obsolete technology to one that is ahead of the rest of the market.
National rollout will commence in the next few months. According to a WBS statement, “Speed and performance will be comparable to fibre, with the advantages that it can be deployed without the cost of digging up suburban streets and time delay in eventually reaching all residential areas.
“Once the network is rolled out WBS will be able to offer mobile broadband on smartphones, tablets and other devices supporting the Internet of Things. In the foreseeable future the majority of voice calls will be carried on data networks, thereby effectively providing consumers with a combined data and voice offering.”
WBS says it has the advantage of not having to invest in legacy networks such as 2G and 3G, and will consequently deploy cutting edge technology referred to as LTE-A PRO or 4.5G. The new network will be deployed on some of WBS’s own 400 sites and sites leased from tower companies and other telecommunications providers.
Jordaan also fired a warning shot at existing operators’ dogged emphasis on traditional voice and their inability to embrace the Over-The-Top apps like WhatsApp and Facebook Messenger.
“We think that voice is fast becoming just another data-enabled app and we are not planning on offering traditional voice; rather VoLTE (voice over LTE), VoIP, WhatsApp, Skype. In essence, we are a competitor to fibre and ADSL.”