New residential developments could be including cutting-edge services from the design stage, but developers have so far failed to take up the opportunities presented by technology.
-TechKnowledge, has published a report, "Multiple play opportunities in the Gated Communities market" which reviews the recent trend, both worldwide and in South Africa, to provide residents of gated communities with cutting-edge services such as broadband internet access, security/CCTV monitoring systems, pay TV,video on demand and voice services.
In future this will extend to providing additional pay TV options, private community networks with applications such as residents' intranet, home automation and security, estate information, information from nearby shopping centres, online shopping, online gaming and music downloads.
Carolyn Falconer, senior telecoms analyst at BMI -T and co-author of the report, states that new residential developments can be provided with access to multiple play services through various technologies such as fibre-optic cables, powerline communications, DSL or wireless applications. A fibre solution provides the largest capacity backbone for broadband solutions within new gated estates and is the technology preferred globally and is deployed by most local players in this market.
"South Africa is currently at the bottom of the wave in terms of such double, triple and multiple play services being incorporated into new gated estates," says Falconer. "Developers tend to be wary of new trends and the costs involved. By and large, they do not have the mentality of wanting to be in the networking business, and so the installation of networks or the sale of the corresponding services is not considered.
"However, as consumer demand for multiple play services in gated estates increases, so developers will need to change their mindset and begin incorporating such technologies and corresponding services into their developments from day one of the project."
So far, a small number of innovative developers in South Africa, driven perhaps by far-sighted and ingenious suppliers, are rising to the challenge and opportunity of incorporating fibre in their new estates. As this eventually becomes the norm, developers who have deployed networks will be able to use this as a differentiator and are likely to differentiate their properties on this basis.
The services offered to a gated estate depend on the supplier, as well as the type of estate and its particular needs.
"Players generally offer a bundled service, of voice and data access including a physical estate security option, with various value adds such as VOD and IPTV/cable as additional extras. Such services are becoming more popular with those consumers who would prefer to receive their broadband internet, telephone and television from the same provider, receiving one bill for all services," says Falconer.
BMI -T has forecast the market for supplying multiple play services to new estates for the next five years. Under BMI -T's base scenario, the total potential revenue for supplying such services to both new and existing estates by 2012 is R1,3-billion.
"Although established estates face more regulatory and logistical issues in terms of new players connecting them with fibre, industry players, already active in the market, are of the opinion that there is an escalating trend in the desire for access to multiple play services, through xDSL, fibre or even powerline or wireless solutions by established estates.
"The potential for supplying established estates with double-, triple- or other multiple play services is strong, even with only 15% of ultimate potential realised. It is clear that the potential for revenue generation is even higher in established estates than in Greenfield estates. Players in this market should therefore also consider a strategy for supplying multiple play services to established estates."
One of the main drivers of market demand for access to multiple play services in gated estates is word of mouth. As more and more gated estates with access to multiple play services are completed, so the demand for such services will rise exponentially as consumers' knowledge increases.
“They see the benefits of having access and it becomes a status symbol,” says Falconer. This should also be driven, in part, by a wider variety of premium content becoming available over time, as well as the increasing acceptance of various models of services deployment, having been tried and tested in the market."
Another market driver in the near future is the growing number of players investing in this space, including powerful brands such as MultiChoice, Vodacom, MTN and Telkom Media, while Neotel and "emerging telco" players (formerly VANS), such as Internet Solutions, are also entering the fray and offering services to gated estates.
The year 2008 should see a lot of movement in the market as many of these players set up partnerships or acquire companies, to complement their own services and complete the multiple play offering.
Investment in this industry by influential players will increase the provision of multiple play services to gated estates both directly through their own actions and indirectly, by inspiring other players to enter the market and invest more aggressively in rolling out such services.