Over the past two years, SkyWire, a subsidiary of JSE-listed technology group Reunert, has invested R56 million in expanding its network of hi-site telecommunications towers to connect South African enterprises to high-speed internet.
This was revealed yesterday by Alan Dickson, group CEO of Reunert, and Graeme Eddey, segment CEO of Reunert ICT, in an exclusive interview with ITWeb.
Reunert acquired SkyWire, a fixed wireless access network provider, in 2018, for an undisclosed amount.
SkyWire competes directly with fixed wireless access provider Comsol, and, to a lesser extent, fibre network operators (FNOs) and mobile network operators (MNOs) in South Africa.
According to Eddey, the company has set its sights on increasing its hi-site tower footprint across the country and introducing 5G-like offerings. He noted that when Reunert acquired SkyWire, it had 120 towers and now has close to 400 facilities.
A hi-site tower is telecoms infrastructure used primarily for wireless communication. These towers support antennas and other equipment necessary for transmitting and receiving signals for mobile phones, radio, television and other wireless communication systems.
Said Dickson: “In FY23, we spent R30 million, and R26 million in 2022. That will be typical of what we spent over the years [to roll out the tower infrastructure]. It’s relatively capital-light in comparison to what our competitors do to get last-mile fibre access.”
“We now have about 400 hi-site towers across the country in key towns and cities. We have invested heavily in expanding the network over the last five years,” Eddey added. “We have identified key geographies across the country where there has been underservicing, from either a fibre perspective or customers requiring a guaranteed solution and service, which cannot be serviced by LTE, for example.”
Eddey revealed the company is also targeting areas where traditional copper is being decommissioned.
New-generation tech
SkyWire is also deploying its latest technology to offer a 5G fixed wireless access equivalent offering.
“We have already been deploying that utilising the latest generation technology solution from the US. We have a number of those sites already live and we have branded that product Hypersync. By way of example, we have a site in Randburg, which is a high interference environment, and we are providing a customer there with 500Mbps download speeds into a point to multi-point environment.”
SkyWire has its own towers and also co-locates on strategic towers where it has partnerships with Telkom. It also has tower partnerships with Vodacom and MTN, which recently sold its tower portfolio to IHS. The other partnerships are with firms such as American Tower Corporation and Helios.
Eddey noted the recent disposal of tower businesses by South African MNOs has been positive for the SkyWire business.
In March, Telkom sold its Swiftnet mast and tower business to a consortium of equity investors for R6.75 billion.
In 2022, IHS Towers completed the acquisition of over 5 000 MTN towers in SA, in a deal that saw the New York Stock Exchange-listed tower company fork out R6.4 billion. IHS Towers now owns 70% of MTN SA’s towers business, with the remaining 30% owned by a B-BBEE consortium.
“When MTN sold to IHS, we went into a strategic agreement with IHS, which actually needs businesses like ourselves in order to uplift the investments it has made in those towers. The tower operators are looking for co-location partners like ourselves to maximise their capital investment and their monthly incomes on the hi-site rentals on the towers they own. It’s more of an opportunity for us.
“We have done really well with Swiftnet, with a long strategic partnership. Besides Vodacom and MTN, we are the third-largest co-locator on the Telkom towers. It will be interesting to see what this new consortium’s proposals will be, and we are in early discussions with Swiftnet around the next steps on that.”
SkyWire partners with FNOs such as Openserve, Metro Fibre and Frogfoot on the fibre business, said Eddey.
“We then resell that fibre to end customers strategic partners. Our business is focused on the B2B plan – we sell to enterprises and SMEs directly. On our fixed wireless access network, we have partners like internet service providers or other WISPs [wireless internet service providers] that will then service the consumer market using our network as an open access network to deliver services to the consumer market.”
He added that SkyWire uses dedicated spectrum where it needs to, to provide specific point-to-point solutions.
“We are a licensed operator; we have ECS [electronic communications service] and ECNS [electronic communications network services] licensing from ICASA. We have one of the largest mining operations as a direct customer, where we built 1GB per second link into that geography. We use the spectrum from ICASA along that route.”
The firm also makes use of the ISM spectrum band − radio spectrum reserved internationally for industrial, scientific and medical (ISM) purposes.
“You don’t require a licence for the ISM spectrum specifically, but you need to be a licensed operator to operate within that spectrum.”
Bolstering broadband connectivity
Dickson noted that in Reunert’s ICT segment, the group has the business communications cluster, which is a combination of SkyWire and ECN, a fixed-line voice over internet protocol business.
He pointed out that the two units contribute operating profit of over R100 million to the group. “SkyWire is by far the fastest-growing part of that business. It remains a business that is growing comfortably, with double-digit figures.”
Looking into the next financial year, Dickson said he has high expectations of the business unit again achieving double-digit growth. “We have had that since we acquired them and we expect that to continue.
“What we find pleasing is that we have a high market share in some of the country’s underserved areas. If you look at the west coast of SA, as an example, there are areas where FNOs are not going to get to. We will be the biggest last-mile broadband connectivity solution provider in those areas.
“About five years ago, it was all about fibre, but as a technology, we are providing a fibre equivalent. In underserviced areas, it’s a preferred technology, and we can take our technology to the areas that other people can’t.”
Fixed wireless access network technology is also rapidly deployable, Eddey noted. “When you want to get fibre, it takes time to get wayleaves, dig and trench, etc. When we get infrastructure on the tower, we can connect enterprises quickly. It’s also less susceptible to damage. Fibre tends to get damaged when there is maintenance on utility services, such as water and electricity, which inadvertently damages the fibre.”
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