He says Aberdare Telecom Networks supplies the basic building blocks from which the networks are constructed. Within Aberdare Telecom Networks there are five key areas of defined business operations, namely: systems and projects; industrial and instrumentation; carriers; exports and manufacturing. "Aberdare Telecom Networks has the expertise in providing and installing telecommunication cable infrastructure, both in copper and fibre, including a wide range of supporting accessories," Bullock says.
He says the company has expanded its operations through a combination of acquisitions and internal growth to incorporate the range of expertise and experience it requires. To ensure competitiveness, the value-added services side of the company has the autonomy to use any company's products in the design and implementation of its client's networks. Aberdare Cables' close links to international optical fibre and telecommunications manufacturer Corning will support it in maintaining the leading edge in technology.
Bullock says the company has set itself some ambitious goals, including becoming the preferred supplier in the South African market for public and private network operators. "We need to convince customers that we are the better option to build their networks." "Aberdare Cables' growth was high, but the systems side of the business was almost non-existent. However, the systems business expects to achieve 10%-25% growth this year and this is likely to rise to 35%-40% in the following 12 months." Bullock says these targets are not unrealistic given the growth in telecommunications worldwide, and in SA in particular.
Not only is a third cellphone network operator due to come into being, but Telkom's period of exclusivity is due to expire in the next couple of years. With a future second fixed line telecommunications network operator, demand for network-building products and services is expected to show dramatic growth. Hans Meiring, CEO of Aberdare Group, says in line with world trends, explosive growth in telecommunications and information network demand, the Aberdare Group has positioned itself to make the most of its strong cable-manufacturing base to offer an integrated package of products and services that supports the building of network infrastructure.
"As the group moves forward to face the challenges of globalisation and changing markets, our commitment is to remain at the forefront of technology in meeting the ever-changing needs of our customers."
Turning out turnkey solutions
THERE has been a global shift towards providing private and public fixed-cable networks as complete operational solutions. Dillan Bullock, Telecom divisional director (marketing), says with this in mind, Aberdare Telecom Networks has established Network Build, a projects division capable of producing turnkey solutions.
Aberdare Network Build has alliances with both local and international companies and is involved in the development, production and sale of optical fibre cables and cables with metallic conductors.
Bullock says the turnkey realisation of complete cable systems and the development of new, highly flexible network concepts will assist telecommunications operators in their infrastructure roll-out.
Aberdare will maintain the cable infrastructure on request. "We are making use of the expertise held within our alliance partners in the area of building private and public networks," Bullock says. "This enables us to sell complete solutions. The operator will come to us and explain that it needs a link between one town and another, and state the capacity required. We design the link, submit it for approval, then build and manage the project. "We hand over the completed infrastructure to the operator."
Optical fibre now a viable proposition
THE corporate market is proving increasingly important for Aberdare Telecom Networks' systems division as lower costs make optical fibre networks a cost-effective solution. Ettiene Visser, Aberdare Telecom Networks systems and projects manager, says Aberdare's systems division supplies complete cable infrastructure for local area networks (LANs) and wide area networks, specialising in optical fibre links.
He says a company moving into a new office park might want an optical fibre network to link all the buildings to ensure quality data highways for its users. "We provide the fibre network, a versatile, high bandwidth network system that can be used to transport voice, video, and data bit streams." Telkom still has exclusivity when it comes to supplying telecommunications infrastructure in the public domain. However, Visser says, Aberdare can provide every element of the network that falls outside Telkom's sphere of exclusivity.
He says the division has been in operation since the early 1980s, when Aberdare embraced the opportunity to supply complete systems, including electrical to optical interface systems, connectorised pigtails, main optical fibre cable, installation and commissioning services. Fibre systems have been installed for a large number of different applications, including closed-circuit television, instrumentation, multichannel voice, and data LANs, and the country's first fibre distributed data interface system.
"Aberdare systems has successfully completed large number of toll-road plazas, that have been equipped with video surveillance, as well as ticket booth information and security services," Visser says. "We represent manufacturers of interface equipment that converts incoming electrical signals into optical signals suitable for transmission along an optical fibre cable."
Visser says the optical fibre business is expanding as confidence in the technology grows and costs reduce. Applications are not limited to a particular market sector or industry, and the advantages of optical transmission will enhance the developments in the telecontrol and industrial process control industries. Visser says Aberdare Telecom Networks' approach is to study a customer's current and future needs and design a range of options for the client. Should a client accept the quotation, Aberdare’s systems division carries out the installation, commissions it, and provides acceptance testing.Visser says the company provides full contract support and maintenance services.
An extension of Raychem in SA
ABERDARE Telecom Networks has alliances with a number of international players, including Raychem. Carel van der Nest, Aberdare Telecom Networks systems and projects national sales manager, says reliable, cost-effective solutions and the ability to implement them quickly are critical for success.
"We are the distributors of Raychem in SA and we work closely with one another, so much so that Aberdare is really an extension of Raychem in SA. Aberdare supplies all the Raychem accessories for copper and optical fibre infrastructure," Van der Nest says.
These accessories include a variety of products that seal, connect and protect the outside plant telephone network, including copper cable closures, environmentally sealed terminals and fibre optic cable closures. In addition, Raychem supplies a range of fibre optic management systems for the access network, including all the products needed to cover the network functions between the optical line terminal and the optical network unit.
"The physical fibre-management system is designed to deliver stable network performance while craftsmen reconfigure parts of the network or add new lines and services," Van der Nest says.
"It is vital for the network operators that they do not disrupt services unnecessarily," Van der Nest says the move towards a more deregulated telecommunications environment is already showing some dividends for Aberdare.
"In addition to the move away from copper to optical fibre technology, Telkom is making a massive investment in its network as it readies itself for competition, and this mans more business for us. We expect that when a second fixed-line network operator comes into the market, there will be even more business coming our way," he says.
Linking with leading players
MULTINATIONAL company Corning's plan to become a global supplier of advanced materials and technologies for the fastest growing segments of the world's economy often requires it to form partnerships with the leading player in new markets. Gary Bateman, Corning regional sales manager: Germany and Africa, says Corning is an integral part of Aberdare Telecom Networks in the southern African market, supporting Aberdare in the deployment of the latest optical telecommunication solutions.
Corning has a tradition of innovation dating back to 1879, supplying the first light bulb to Edison, inventing the colour television tube, and developing the first low-loss optical fibre, Bateman says. "Building on its heritage, Corning has reinvented itself, sending a clear message of its intention to be a long-term global leader in the field of optical telecommunications," he says.
He says Corning's capabilities in optical fibre, cable and photonics have made the company a key partner to leading telecommunications systems and service suppliers around the world. Bateman says this position has been strengthened by several acquisitions, mergers and joint ventures, including the acquisition of BICC's global telecommunications cable businesses and Siemens AG's worldwide optical fibre, cable and hardware businesses. The company also announced recently that it was investing $750m in optical fibre capacity expansion. The photonic technologies division has also seen activity, including a merger with Oak Industries, the acquisition of Honeywell's Optical Polymer Group and British Telecom's Photonic Research Centre, and a joint venture with Samsung Corning Microelectronics.
"Corning also manufactures and markets specialised glasses for liquid-crystal display screens and monitors, high-performance television tubes, semiconductor manufacturing equipment, ceramic substrates for automotive and industrial pollution control, and advanced microplates and micro-arrays used in biotechnology research," Bateman says.
Strong focus on exporting
Long-term commitment a key to success
EXPORTS are a vital part of Aberdare Telecom Networks' business and the company has focused considerable resources in this area for more than 50 years. Robert Harrington, Aberdare Telecom Networks acting divisional manager (sales), says since the establishment of Aberdare Cables in Port Elizabeth in 1946 it has been clear that a cable production factory in SA would be able to supply the needs of this country and its neighbours.
It could also be strategically located to meet the escalating requirements of the Pacific Rim, Indian Ocean Islands and the Far East. he says. "Aberdare has secured many projects against international competition over the years,"
Harrington says Africa offers enormous potential as a market, but it will take time to develop. Historically, much of Africa's telecommunications infrastructure was provided by European countries that funded the projects as part of aid packages. A condition was often that the telecommunications project had to be built by a company from the country providing aid.
As a result, many African countries now have telecommunications networks that use a variety of European standards and have not been built with African conditions in mind. "Fewer of these aid projects are occurring now and African governments are buying equipment to maintain, extend and upgrade their networks," Harrington says. "Not unnaturally, their first response is to buy from the country that supplied the original equipment," he says. Therefore, Aberdare's challenge is to develop relationships with these potential customers and educate them with regard to the benefits of using equipment that has been designed specifically for African conditions.
"There are significant cost reductions when purpose designed equipment and cables are used," Harrington says. "The channels are beginning to open up, but it will take time." However, Aberdare is enjoying successes elsewhere in the world, competing head-on with some of the best international suppliers. Harrington says one of the keys to success is the realisation that exporting is not a short-term business.
Exporters that enjoy success are those that commit resources to the export drive and remain in the market. Harrington says that all too many South African companies use exports as a quick-fix to replace falling domestic demand. When local demand increases they leave their overseas customers in the lurch. "We have been exporting for many years and have a dedicated export department that is always working to develop opportunities," Harrington says. "Our customers know us and know that we are in the market for the long term," he says. Illustrating the success that can flow from this long-term approach are deals such as securing of a contract in Hong Kong to supply indoor telephone cable valued at around R15m.
Together with the power cable supplied by Aberdare, a pilot and control cable was manufactured and supplied by Aberdare Telecommunications to be installed on the Tsing Ma suspension bridge linking the new airport in Hong Kong with the main land. Harrington says a successful exporter uses competitive advantages to the fullest, and if there is no advantage the exporter finds one.
A case in point is that one of the reasons behind the company's success in the Far East has been its realisation that freight charges were low on the outward bound leg and that this could be used to lower the price of products delivered to customers in that market. Another export victory for Aberdare was a major contract to supply indoor, outdoor and aerial cables to the United Arab Emirates (UAE) valued at R3m.
Various types of telecommunication cables have been supplied to sub-Saharan Africa, which includes Zimbabwe, Zambia, Malawi, Uganda and Kenya. Aberdare has also supplied undersea telephone cables to projects in Mauritius that linked holiday resorts to the main island. Recently, orders for optical fibre cables have been awarded to Aberdare for delivery to Mauritius, UAE and New Zealand respectively. Aberdare has also secured around R30m in orders for optical fibre cables to be delivered to Europe for leading telecommunications operators.
Catering for specific niche markets
THE instrumentation and control cables used by some industries have to meet critical safety and signal-screening standards. Jeff Rogers, Aberdare Telecom Networks national sales manager, says the company's industrial section caters to specific niche markets, such as refineries, pulp and paper, chemical plants and the mining industry. "In some cases the cables have to have high-quality screening to ensure that the data being sent through the cable is not effected by external signals," Rogers says.
In addition, in some situations, such as those found in the mining industry, the cabling has to able to stand up to extreme environmental conditions. Safety is another area of particular concern in a number of industries, he says. Rogers says if there is a fire, the sheathing used on many standard cables behaves much like candle wax – running, burning and spreading the fire.
In addition, standard PVC-based sheathing produces high density smoke that adds to the hazard created by a fire.
"As a result we tend to use materials such as filled ethylene vinyl acetate, which is flame retardant," Rogers says. These more obvious challenges in terms of cable design can be overshadowed by specific industry issues. For example, in an oil refinery the major safety challenge can be capitance – where there is a build up of a static electrical charge in a cable, regardless of whether it is connected to a power supply or not.
"There are areas in a refinery in which there are flammable gases. An electrician working in such an area cannot afford to cause an electrical discharge from the core of the cable as this could spark an explosion." Rogers says there are fluctuations in demand for the company's products, often depending on economic cycles through which particular industries are moving. For example, in recent years lower commodity prices have hit the mining industry and mines have been reducing their spending.
"Sales to the mining sector have dropped considerably. However, there are signs of a resurgence as mines become increasingly safety conscious. "Demand from SA's oil refineries is beginning to increase and there are a number of projects in that industry that have been given the go-ahead," Rogers says.
He says the company is also doing business in other countries where local mining groups have drawn it into projects. However, he says it is the offshore oil refinery business that is showing signs of significant potential. Recently the company put the first Aberdare instrumentation cable into a Middle East refinery. "We are able to compete on all fronts: quality, service and pricing," Rogers says. "Aberdare has just signed an agreement with a project house with a view to servicing the Middle East market more aggressively," he says.
Aberdare has built up its expertise in the specialised cable industry following its acquisition some years ago of Contronics Cables. Since those early days the company has won contracts with companies such as Caltex, Engen, Alusaf, and Sasol. "In situations where our customers' applications call for special design, Aberdare's engineering expertise enables us to offer innovative ideas to match those applications," Rogers says.
Costs of enhanced bandwidth falling
IN the US, optical fibre is considered a relatively inexpensive medium for networks, mainly due to the extensive use of the technology in that market. However, while prices are higher in SA, costs are falling as optical fibre volumes increase.
Ettiene Visser, Aberdare Telecom Networks systems and projects manager, says optical fibre is the ideal medium for today's voice, video and data networking needs. "In the corporate market prices have already fallen to the point that we are winning contracts, on a continual basis, for optical fibre networks. "Due to price perceptions there is often a tendency to disregard optical fibre, until today's prices – which have fallen some 20%-30% – are taken into account," Visser says.
He says the technology offers enhanced bandwidth and is not subject to the cable theft that has dogged copper-based networks. In addition, optical fibre networks do not suffer the disadvantages of other media in SA's lightening-prone conditions. While there are technologies that permit copper cable to be used for high bandwidth applications, these are viewed as offering only a short-term solution," says Visser. A conventional telephone line permits bandwidth of 64 kilobits per second compared with a norm of 2 megabits per second on optical fibre.
The electronics, the end termination equipment, determines the amount of traffic that can be carried over optical fibre. As the technology improves there is no need to relay the optical fibre; it is the termination equipment that is replaced, says Visser. "At the moment optical fibre can carry 2 gigabits per second and the industry is moving to the point where the transmission of terabits per second will become common place."
Nor is bandwidth the only area which optical fibre technology is improving, he says. For example, dense-wave divisional multiplexing allows a pair of fibres to be split into 32 channels, either electronically or physically. This means that, for example, a pair of optical fibre can be split to serve as many as 32 buildings in an office park, providing each with its own link on to the network.
Visser says optical fibre networks are costly due to the equipment attached to the fibre. Therefore, in the telecommunications environment it takes time and money to roll out optical fibre to all areas. As a result, the telecommunications networks tend to use optical fibre in high-traffic areas such as links between exchanges or between cities and towns. However, as the optical fibre network spreads there will be a time when providing optical fibre links directly to a business or residence becomes more viable, he says.
Adding to the business case study is the fact that other services can be offered over optical fibre, as illustrated by the extensive use of cable television in the US. Until demand for high bandwidth services grows to the point where optical fibre is pervasive, Visser says the use of bandwidth-enhancing technologies on copper cable is a viable, though not inexpensive, option.
"It is just not worth while, for example, to provide an optical fibre link to a single user in a residential area. "Until demand in particular areas grows, technologies such as asynchronous digital subscriber line permit higher bandwidth over copper cable. "However, once the optical fibre network reaches these users, they will naturally switch to the better technology," Visser says.
