INTRODUCTION OUR SERVICES

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1 INTRODUCTION OUR SERVICES Conduct aims to revolutionise the South African telecommunications market by building a trusted, open-access, optical network in the last mile. We deploy carrier neutral, dark fibre optic networks to the premises. This optic network in the last mile allows users and service providers to interact freely and directly. WHY OPTIC FIBRE? Broadband demand has increased exponentially in the last three decades. The combination of deregulation and triple play convergence (voice, video and data) has changed the market. The pattern of growth is clear and it will become progressively difficult for any technology, other than fibre, to support the future demands for speed and capacity. THE CHALLENGE World-class broadband access is yet to reach all South Africans. Access to fibre infrastructure is only available to a select few service providers and organisations who can afford to make the significant investment in capital infrastructure. In most cases broadband users are also limited to sourcing the services from the owner of the infrastructure. To create a truly dynamic and competitive market, it is vital to separate the fibre infrastructure from the services provided. BENEFITS The logical separation of infrastructure ownership and broadband services is simply more cost effective. It further creates new markets for service providers and encourages more competition. This gives users more choice and control. It also offers service providers technical flexibility and scalability and limits disruption to public areas and private properties by eliminating duplication of construction. OPEN ACCESS DARK FIBRE Open-access, dark fibre infrastructure connecting the premises to the infrastructure backbone is the only solution. This way the infrastructure is available to all service providers on equal terms. Once fibre is deployed to the premises, users can interact directly with service providers to source the best broadband services available. Conduct s fibre is unlit so that service providers can choose which technologies they deploy and which equipment they prefer to use to light the fibre.

2 LANDLORD MORE DESIRABLE PROPERTY AND LOW TENANT TURNOVER Conduct will, at no cost to the landlord, connect the business premises to carrier-independent fibre optic infrastructure. The passive optic network is both open-access and technology independent. Once the fibre is deployed to the premises, the tenants may source the best broadband services directly from any service provider. KEY BENEFITS The ability for tenants to instantly access a wide range of world-class broadband services will benefit the landlord. Conduct s open-access policy allows tenants to select the best service provider and gives them the flexibility to move with their preferred service provider to new locations. Zero Cost Conduct provides the fibre infrastructure directly into the premises at no cost to the landlord. OUR APPROACH Conduct surveys the property and submits a detailed plan for landlord approval before the installation is made. On completion, the landlord signs off on the installation to verify all work was completed in line with quality expectations. More Desirable Premises Tenants enjoy: Services available from a wide range of service providers Access to high-speed, world-class broadband Power to replace poor performing service providers Lower Tenant Turnover The availability of high-speed broadband services can eradicate high tenant turnover, as tenants will be reluctant to relocate to premises without the fibre utility.

3 USERS MORE CHOICE AND BETTER SERVICE Conduct provides users the opportunity to access a wide range of fast, world-class broadband services. Conduct does not sell any services itself, but provides the open-access fibre optic infrastructure that makes it all possible. This means the infrastructure is available to all service providers on equal terms. It allows users the flexibility to choose service providers with the best broadband service offerings in the market. In other words, once the fibre is deployed to the premises the occupants or users may source the best broadband offerings directly from any service provider it chooses. ZERO COST The fibre utility is provided at no cost to the tenant or user. There is no installation cost, or line rental, nor any obligation on the occupant to use the fibre utility. Conduct will install and maintain the fibre infrastructure. The user is connected to the network on request from its chosen service provider. MORE CHOICE Our open-access network provides access to all service providers on equal terms. This gives service providers the ability to compete with a wide range of broadband service offerings. Users are free to choose services that best meet their costs and service expectations. Once the fibre is deployed to the premises the users may source the best broadband services directly from any service provider it chooses. MORE CONTROL The open-access principle of our last mile network, makes it possible for users to switch from poor performing service providers without any hassle. Users can take advantage of more competitive service offerings in the market place as they arise. BETTER BROADBAND There are many competing technologies that can deliver broadband services such as, ADSL, wireless etc. All these technologies have limits in terms of bandwidth, reliability, cost or coverage. Only optical fibre offers almost limitless bandwidth capabilities, has excellent reliability and is becoming increasingly economical. Consequently, fibre is the preferred choice for delivering highspeed broadband services. With access to fibre, the possibility of world-class broadband services becomes available to all occupants and potential users.

4 SERVICE PROVIDERS LOWER COST, GREATER FLEXIBILITY AND QUICK TO MARKET Conduct offers service providers fibre to the premises (FTTP) access. Our open-access, last mile, optic network is installed from a metro network operator handhole to the premises. Service providers can now offer services directly to potential clients in all the premises covered. Conduct s last mile network is passive and technology independent. This provides the required flexibility and scalability for service providers to offer their clients any range of broadband services they choose. The service provider also has the ability to aggregate several tenants in the last mile onto its backhaul fibre pairs to gain better economies. Once the fibre is deployed to the premises, service providers can easily acquire and service their clients quickly and cost effectively. Service providers lease the access to a tenant from Conduct. KEY BENEFITS Lower Cost Conduct s open-access model removes the prohibitive access build costs associated with providing fibre to the premises. Service providers gain access to clients by leasing fibre in the last mile at competitive rates. FREEDOM Flexibility & Scalability Our passive optic network gives service providers control. They are able to provide any service or solution over the unlit last mile infrastructure. Our architecture allows service providers the flexibility of point-to-point services or to aggregate demand in the last mile. As bandwidth demand grows, service providers can easily upgrade equipment and services to meet clients needs. New Markets Conduct will build on risk in commercial areas in an effort to saturate each of the premises in such an area. This will provide service providers with access to new potential clients who can take up broadband services that previously were not available to them either due to bandwidth restrictions or prohibitive costs.

5 BRIDGING THE LAST MILE BROADBAND DEMAND GROWS Download speeds have increased dramatically in the last two decades. Several technologies are used to deliver broadband in South Africa, i.e. copper network, fibre, wireless and satellite. Each of these technologies is able to compete for a share of the low-speed broadband market as technical limitations make delivery at higher speeds difficult. Only fibre can deliver the highest speeds and it will become increasingly difficult for any non-fibre delivery platform to support future demand for speed and capacity. AFRICA IS GETTING CONNECTED The South African telecommunications market has witnessed major changes over the past five years. The combination of deregulation and triple play technology convergence (voice, video and data) has changed the broadband landscape. Services are being delivered in a competitive environment by multiple service providers, including fixed-line carriers, mobile operators, internet service providers, broadcasters and media companies. Product ranges are increasingly expanding, and services such as voice, data and video are often bundled with others. The service providers who compete in this market have differing capabilities, product offerings and business objectives, but they share a common requirement for more communications bandwidth to satisfy customers needs. This massive increase in demand for communications bandwidth requires the installation of world-class fibre optic infrastructure. This has lead to the expansion of fibre optic backbone infrastructure in South Africa. Several companies capable of funding the construction of this backbone have emerged, including the traditional fixed line operators, mobile operators, Government, and independent open-access operators. These companies have each focused on creating metropolitan networks and long-haul fibre infrastructure. HIGH COST OF ACCESS To date, this expansion has been driven by the bandwidth needs of the mobile operators as well as large corporations and institutions who can afford the cost of accessing the backbone infrastructure. Most enterprises in South Africa, however, still do not have access to the high bandwidth of fibre infrastructure, as the cost to access these networks has thus far been prohibitive. Service providers struggle to recoup the capital cost associated with access builds via their service contracts, and it is often very difficult to justify the costly backhaul for the smaller to medium-sized clients. THE CHALLENGE To create a truly dynamic and competitive broadband market, all business owners need access to cost-effective fibre in the last mile. How do we provide fibre to the premises of smaller and medium organisations if only large networks can afford to make investments in capital infrastructure and has the ability to cross subsidise profit margins through bundled pricing solutions? It requires a carrier neutral, dark fibre optic-network that links the backbone directly to premises. This will build a viable service provider industry and give open and affordable access to all.

6 TECHNICAL OVERVIEW CONDUCT ARCHITECTURE CONDUCT LAST MILE NETWORKS Conduct provides the last mile market with cost effective and fast access to fibre networks. This is done through the construction of an open-access dark fibre infrastructure connecting the premises to the metropolitan fibre networks. Figure 1: Conduct Peering Point Infrastructure WHAT IS OPEN-ACCESS? Open-access infrastructure is fibre infrastructure that is independent from the services provided over it. In other words, any entity with either an ECS or ECNS licence can provide services to its clients using the open-access infrastructure and other service providers are not excluded. The infrastructure is available to all operators on equal terms. Once fibre is deployed to the premises, clients interact directly with their service providers to source broadband services. WHAT IS DARK FIBRE? Dark fibre is unused optical fibre infrastructure. As fibre technology transmits data as light waves, unused fibre is known as dark. The use of dark fibre gives service providers the ability to select the transmission technology they prefer. It gives them the flexibility and scalability to meet their clients needs without having to incur the major capital expenditure of installing the infrastructure. They can also avoid renting expensive managed services from operators that may be competitors. HOW IS THIS ACHIEVED? Conduct installs dedicated fibre strands from each premises to a dedicated Conduct Peering Point through its independent ducting system (as indicated on the diagram on the left). This dark fibre infrastructure is sized to have sufficient capacity to cater for all the current and future requirements of all operators that may wish to provide services to customers in a particular area. Provision is also made for independent fibre routing between each premises and the Peering Point in order to cater for customers that require diverse fibre links.

7 WHAT DOES THE ARCHITECTURE OFFER? Metropolitan fibre networks that have a presence in a particular area are able to connect their infrastructure to the Conduct Last Mile network through the Conduct Peering Point. Many service providers also utilise the network owner s infrastructure to connect to their fibre backbone. Since Conduct installs dedicated point-to-point fibre strands between all the premises and the Peering Point, Conduct is able to provide the various service providers with three types of connections to all customers, as illustrated in the previous diagram. Connection A: Conduct provides for physical space within the Peering Point for service providers that wish to have their active equipment within the Peering Point. This provides the service provider more flexibility and scalability to offer their customers a broader range of services. The service provider also has the ability to aggregate several occupants in the last mile onto its backhaul fibre pairs to gain better economies. Connection B: Conduct can aggregate several occupants through passive splitters for ISP s that do not have an active presence in the Peering Point. The passive optical splitters are not electrically powered and are used to combine multiple premises and transmit through a single fibre pair on the service providers backbone. Powered equipment is required at the source and receiving ends of the signal, which would be at the occupant premises and the service provider s point-of-presence (PoP). The service provider would then manage the traffic between it s PoP and the various occupants. Conduct makes provision for splitting ratios of 1:4, 1:8 and 1:16 within its Peering Points. Connection C: Conduct can provide point-to-point connections directly between the occupants to the service providers PoP through the network owner s infrastructure. Connections can easily be changed between these various connection types at the Peering Point. SECURITY? As Conduct does not provide any services on the fibre network, the integrity and security of the actual data being transmitted are the responsibility of the service providers. There are many security and encryption techniques available to the service providers in order to protect and ensure the integrity of the user s data. Conduct employs various physical measures to ensure that access to its infrastructure and to the Conduct Peering Points is limited. WHAT ARE THE BENEFITS? The deployment of an open access dark fibre network will enable users and service providers to interact freely. The market place will enjoy the benefits of the logical separation of ownership of infrastructure and the services provided. It is more cost effective, fosters competition and is less disruptive to the public and private space. Cost In the construction of fibre infrastructure, the major portion of capital expenditure is consumed by the civil construction (trenching, manholes, ducting etc). Each trench can house fibre in excess of the total capacity requirements of all the current licensed providers. This portion of expenditure is therefore identical and common to each service provider. A single open-access solution would prevent the unnecessary duplication of investment and effectively share the cost among the service providers. CONTACT US For a comprehensive technical discussion, contact a Network Architect on 0861 CONDUCT ( ) Less Disturbance From a city metro or roads agency perspective, a common, open-access infrastructure would make it possible to meet the access needs of all services providers without having to cater for different installation methods, time frames, and multiple builds of virtually identical access routes. Better Broadband Services Customers also have the ability to choose from a range of service providers, to obtain solutions and services that best meet their individual requirements. Service providers gain access to new markets, and can design optimal solutions to serve the widest possible customer base in any area.