All systems go for Cape Town fibre optic

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 20 Apr 2007

The City of Cape Town plans to offer backbone infrastructure facilities to all telecommunications providers within its limits across its proposed R400 million fibre optic network, says city CIO Nirvesh Sooful.

Yesterday, Cape Town mayor Helen Zille's mayoral committee gave the political nod to the project, meaning all the parties included in her governing coalition have agreed. In November, Zille gave her personal endorsement and in December the city council also endorsed the project.

Sooful's project team now has to fine-tune its business plan to meet certain city requirements. These include that it does not take the R400 million directly out of its budget, which is already stretched to provide various social services, and that an alternative funding model is considered, such as floating a municipal bond.

The fibre optic project is based on a similar model used by the Swedish capital of Stockholm, in which that city supplies infrastructure that is leased by service providers.

"We will not provide services directly to the public or even last mile access. What we are doing is providing the backbone that other telecommunications providers can lease from us," Sooful says.

Funding option

Ravin Naidoo, CEO of consultancy Radian, which is acting as an advisor to the City of Cape Town, says the business plan will cover the economic impact and how the funding will be raised, with the city acting as the guarantee. The plan has to be submitted to the city's executive committee in three weeks.

"A municipal bond is not the only option; an investment into a project of this size is ideal for institutions such as the Development Bank of Southern Africa or the Industrial Development Corporation," he says.

Naidoo says the laying of the cable will help the city reduce its own telecoms costs by a projected saving of around R40 million per year. It will also allow the smaller alternative telecommunications players access to backbone infrastructure that they struggle to obtain from Telkom, he adds.

Initially, the core network will stretch 300km, running from Sea Point to Strand and Stellenbosch to Bellvile and Mitchells Plein, Khayalitsha, Simon's Town and Hout Bay. It will pass through all the city's key buildings. There are plans are to double this presence in a future phase.