In 2008, a seemingly innocuous South African High Court ruling had a significant impact on the telecommunications industry and the players in the sector. The outcome of the ruling was that value-added network service providers (VANs) would have the right to implement and operate their own telecommunications network infrastructure and were no longer compelled to use the network services of the licensed fixed and mobile operators at the time. Almost overnight these VANs were transformed to electronic communication network service providers.
Dark Fibre Africa (DFA) supported this ruling, as it enabled its network and business expansion plans based on open access. Executive Director and CEO Thinus Mulder explains: “The ruling that VANs could self-provide its network and infrastructure facilities opened up the environment for a wholesale open-access fibre network to flourish.
“The open-access model was disruptive, because it meant that it was not necessary for every telco operator and network service provider to self-provide. They could acquire network infrastructure services from a wholesale open-access provider who could aggregate industry demand and reach economies of scale much quicker than individual operators if they had to implement themselves.”
Thinus Mulder put in place a plan for success
At the outset, says Thinus, the business plan was based on a few targeted customers, the idea being that the major telcos would purchase dark fibre for their network architecture, rather than building their own fibre infrastructure. It was an enormous success, with DFA growing its customer base significantly on the back of signed long-term contracts.
“The resulting annuity income and predictable cashflow has enabled us to invest in network expansion and densification, giving our customers access to more geographical markets and end users in a cost-efficient manner. We also invest in proactive maintenance and network assurance technologies, ensuring high network availability and reliability for our customers and their clients.”
As a result, DFA has significantly reduced the capital expenditure and associated management input costs of telco operators and service providers in building and operating networks. The wholesale open-access model supported efficient and accelerated deployment of networks to deal with the growing demand for information and communication services in the South African business and consumer market segments.
More importantly, adds Thinus, “DFA addressed the need for cost-efficient and reliable infrastructure, which meant that service providers could focus on delivering compelling business and consumer services and applications to the market. We paved the way for service-based competition, which was to the benefit of end users.”
Sustainable business growth
DFA’s customer value proposition has been a catalyst for its sustainable business growth since inception. “When I joined DFA, it was a very small team – just 13 of us,” Thinus recalls.
“Today, we have a national footprint spread across all the major metro areas in South Africa, employing more than 900 people directly in DFA and close to 2,000 additional resources including the subcontractors that we use. We have invested over R8 billion in the network and installed more than 10,000 kilometres [!duct!] of national fibre. Our network provides access to 30,000 business end points and connects over 10,000 base stations for the mobile operators in the country,” he says.
“Our customer base comprises all the mobile network operators, fixed network operators, internet service providers, large enterprises, government departments, state-owned enterprises, and municipalities. We also connect all the major centres in the country,” says Thinus.
Fibre connectivity plays a critical role in supporting the delivery of fixed and mobile information and telecommunication services in the country, and with DFA being a key partner to mobile operators and service providers, Thinus acknowledges the responsibility and accountability that goes with this role.
Dark Fibre Africa's core principles
He also attributes a large part of the company’s success to getting things right from the start and defining a set of core principles for the business. This has included ensuring that they would not compromise on the quality of the network.
“At the very beginning, we as a management team decided that we would raise enough capital to build a high-quality network. We developed robust network and deployment specifications which covered our trenching depths and the choice of equipment. We would never sacrifice quality to reduce deployment cost.
My father used to say to me, ‘Always stay humble and give more than you take.’ That’s how I try to live my life.
“This decision has paid dividends, as it enabled us to keep our network uptime at a really high standard of 99.99% on average over the past 10 years. That’s why we have such long-term relationships with our customers; they found us reliable and very predictable.”
Thinus goes on to say that Team DFA – “our people” – is what he considers to be the company’s greatest asset. He is passionate about providing a great learning environment that will enable his employees to grow towards and to achieve their aspirations and full potential.
“While we are a company that is growing at significant pace, we actively invest in staff to keep them engaged and passionate about their contribution to the business and the experience they deliver to our customers. We encourage them to live our values in everything they do.” All DFA staff members are also beneficiaries of the company’s growth and business performance through a share appreciation rights scheme.
A culture of knowledge sharing & industry analysis
Innovation and knowledge sharing is also a key component of the way things work at DFA. “You have to remain receptive to new ideas, and, as a result, a lot of suggestions cross my table on a daily basis. We evaluate these ideas based on business fundamentals, which include strategic fit, value creation and return on investment,” says Thinus.
DFA also engages with industry peers and analysts to stay on top of what’s happening in the rest of the world. Thinus comments that, in addition to attending key industry and analyst conferences, it also brings in industry experts to update the organisation on trends and industry developments.
This culture of knowledge sharing and industry analysis has informed key investment decisions. “We identified three growth areas in the industry, namely IoT, FTTB [!fibre!], and FTTH [!fibre!],” Thinus adds. “We recently established a wholly owned subsidiary, SqwidNet, which is the Sigfox IoT network operator in South Africa. The connection and revenue forecast for IoT in South Africa and predictions from the analysts are phenomenal, and with 75% population coverage to date, we are confident that SqwidNet is a significant player in this space.
It recently won the IoT Product/Service of the Year Award at AfricaCom 2017, and has also
been identified as one of the top three IoT companies to watch in South Africa. “We have also acquired a significant majority stake in South African Digital Villages, a wholesale open-access FTTH provider. The FTTH market is growing at an exponential rate as consumer demand is driven by the consumption of rich media services,” says Thinus.
FTTB growth is also high, as mobile operators look towards deployment of 5G networks, and as business users move to adopt cloud-based business services and applications.
“We have evolved our product sets from dark fibre services only to include managed ethernet services. We were also recently accredited by the Metro Ethernet Forum to deliver Carrier Ethernet 2.0, Access EPL and Access EVPL services,” adds Thinus. This reflects DFA’s commitment to deliver relevant products that meet the needs of the FTTB markets that they serve through their channel of service providers.
"Invest in yourself"
On a more personal level, Thinus ascribes a great deal of his leadership principles to this piece of advice he received from his dad: “Always stay humble and give more than you take.” He also believes strongly in investing in oneself.
Our vison is to enable a high-speed digital world where innovation and meaningful connections prosper.
“They say that for every rand that you invest in yourself, you get three times that in return. I do try to invest in myself as much as I can, taking every opportunity to learn and read about new things,” adds Thinus. He likes to focus on strategy, and follows a collaborative process, with a strong focus on creating value. He places a great deal of trust in his executive team and empowers them to execute the strategy, and, in some cases, remains hands-on to help them get started.
“Collectively, the executive team has more than 150 years of ICT experience, which is an invaluable asset,” says Thinus. “This has been a key contributor to the success of the business; it enables us to move at pace into execution mode. Once we’ve made a decision, we roll it out, and we regularly track and measure progress against a defined scorecard to ensure success. This enables us to focus our efforts on management by exception, which is much more efficient for the business.
“We continuously look at ways to streamline our internal processes and systems, looking at automation where possible and making it easier for our systems to integrate with our customers’ systems and processes. We want to make it easier and frictionless for customers to do business with us. We have invested in catalogue-driven order management and multi-domain service orchestration, which will result in a significant improvement in customer experience and efficient service delivery.”
A world where innovation & meaningful connections prosper
Thinus adds that the company has also made strategic acquisitions with the goal of having control over the quality of its network. These include MCT Telecommunications, which deploys and project manages complex fibre projects, and Conduct Telecommunications, which deploys in-building reticulation.
Thinus says that DFA has contributed significantly to the industry by defining the standards for fibre deployment, which is still used today by most operators who deploy fibre infrastructure. In addition to this, DFA will continue to lobby for the mandatory inclusion of fibre ducts by the construction industry in greenfield developments. “We see it as a fourth utility,” he says. “It’s not legislated by bylaws in South Africa yet, but I think it will come.
“Our vision is to enable a high-speed digital world where innovation and meaningful connections prosper. We are proud of the contribution that DFA makes to the inclusion and participation of South Africa and its citizens in the digital economy,” concludes Thinus.