FTTX is in growing demand across South Africa, but in meeting this demand, it is important for telcos to control the costs of infrastructure build without losing focus on quality, writes Clive Maasch, GM at Tank Industries.
The telecoms and internet sectors, particularly fibre to the home and the business (FTTX) suppliers, are witnessing surging demand at the moment. As a specialist FTTX infrastructure component manufacturer, we have seen a dramatic surge in telecoms product sales to our international markets; and even greater opportunities developing in South Africa as communities demand the fastest internet access available.
To meet this growing demand effectively, telcos must control the costs of infrastructure and operations, while at the same time ensuring that installed infrastructure is rugged, future proof and does not deteriorate over the next ten to 15 years. This means careful consideration must be given to the infrastructure itself, and to the potential for hidden costs of infrastructure adding to the overall cost of doing business.
By sourcing components from world class local cable and component manufacturers, telcos can bypass exchange rate fluctuations, avoid bulk purchases and ensure a steady supply of smaller orders, eliminate significant warehousing costs and dramatically reduce delivery times. These factors help reduce unnecessary build expenditure.
However, price alone cannot be the determining factor when procuring FTTX infrastructure such as fibre optic cables and accessories such as splice closures, connectors, distribution cabinets and indoor and outdoor termination boxes.
As is often the case when demand surges, we will see a flood of inferior, low-cost products entering the market, bringing with them the risk of potentially costly infrastructure degradation over time.
On the other hand, when sourcing components from reputable international manufacturers, local telcos face a number of unexpected costs and challenges. Firstly, the most cost-effective way to import components is to do so at scale, ordering the entire year’s stock shipped at once. This impacts cash flow and brings with it the hidden cost of warehousing the excess stock. Second, shipping freight from abroad leaves telcos vulnerable to delays that could impact project timelines and revenue potential. It is not uncommon for containers to be delayed or for ships to spend several days offshore before being allowed into the port. For the telco anxiously awaiting crucial components to complete an installation, a delay of a few weeks could prove costly.
In addition, when importing components, small orders and assuring a steady supply of components to support ongoing roll-out becomes a significant challenge. Should a telco require customized components, the cost of meeting designers and engineers and testing new components manufactured overseas could prove prohibitive.
Buying Made in SA products also facilitates collaboration on the design and customisation of components to meet unique South African needs; and puts the customer directly in touch with the manufacturer, ensuring greater accountability and support. And, of course, buying locally produced components supports job creation, boosts telcos’ BEE ratings, and helps keep South African money in the country, which benefits the economy as a whole.
Buying Made in SA goods is a win-win for everyone.