Taking on Telkom and Neotel with powerline broadband

There is an article in the outgoing issue of Financial Mail about Miko Rwayitare a Rwandan-born entrepreneur, who is sinking billions of his own cash into Goal Technology Solutions (he owns 66% of this Grintek Telecom spin-off) with the intention of building a telecommunications and television service based on powerline communications technologies. Here is the pitch:

Imagine a world

  • Where every power socket in your home or office is a broadband communication point, without the need for separate cabling,
  • Where Internet telephony is of high quality and does not require you to have a computer,
  • Where high quality surveillance and security systems are flexible and easy to implement,
  • Where video streaming and video-on-demand through IP TV is a reality,
  • Where broadband communications is affordable,
  • Where there is a communications network that is scalable to fit growing needs.

This future world exists today through Broadband Power Line Communication (PLC), which converts the existing electrical grid into a high-speed data, voice and video network.

This technology is not new but it has been plagued with technical issues for a little while now. According to the FM article, these issues have been resolved and GTS is on track to provide a communications service that will make Telkom’s 4Mbps service seem like dial-up.

GTS has fixed its sights firmly on Telkom (and, by industry association, Neotel) as well as Multichoice as its proposed service will offer "guaranteed minimum access speeds to subscribers of 90 Mbit/s" which is roughly 22 times faster than Telkom’s fastest ADSL. The service will be offered in conjunction with local municipalities and will take advantage of provisions in the Electronic Communications Act that permit municipalities to make use of the communications infrastructure to provide communications services to their consumers. Telkom initially cried foul over certain municipalities’ exploitation of these provisions but now seems to have adopted a more co-operative tone in light of pronouncements by the communications regulator, ICASA, that support the municipalities.

GTS will effectively bypass Telkom’s controversial hold over the lucrative ‘last mile’ of its telecommunications network that links its subscribers to the network by providing a service that runs over your powerline right into your living room and every other room with a power port. This new service will consolidate broadband, voice and high definition television at a price GTS intends to set at roughly 25% less than alternatives. The fact that this service runs over powerlines means that it could reach 80% to 90% of South African homes. The specific implementation of the technology will make use of smart devices that plug into the wall socket and configure themselves automatically with control over which services are rendered being centralised at GTS’ facilities. This means no waiting for a GTS technician to arrive at your home to set the service up and therefore the potential for a much faster and more widespread adoption by consumers.

The one big drawback is the stability of the local power grid. While Telkom experiences disruptions from time to time, this service may prove to be little more than a nice idea in areas like the Western Cape which suffers rolling blackouts from time to time. Of course no power also means more traditional telecommunications services won’t operate either so this may not be as big an issue as it may seem.

Bottom line … there is a service coming which may make Telkom and its rival, Neotel, redundant for many South Africans. Watch this space!

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