South Africa is witnessing a new crop of fibre network operators (FNOs) that are targeting the lower-income market.
This is one of the biggest takeaways from local market analyst firm BMIT’s latest South African Broadband Report, which explores the new set of market players that have been testing low-cost fibre deployment models.
Chris Geerdts, managing director of BMIT, says these companies are dedicated to providing quality, affordable connectivity to lower income households, as the upper income market saturates.
The market analyst firm says in the lower income market, the new generation of FNOs −such as Fibertime, iLitha and Wire-Wire − have been testing innovative models that maximise social impact on a sustainable, profitable basis.
BMIT has seen creative design concepts and pricing and distribution models adapted to this target market.
It explains that the models are based on reducing the cost-per-connection through a variety of innovations, using aerial fibre, in areas of high housing density.
BMIT notes that for this market, pay-as-you-go options are added to the traditional prepayment options, to buy access on a duration basis of a day, week or month.
It points out that Fibertime has a one-hour access option and has introduced a crypto-based micropayment system to enable such payments.
Some of these projects incorporate WiFi roaming on a mobile device throughout the suburb, in addition to the fibre installed in each home. The WiFi can be enabled either by means of access points mounted on street poles (as Fibertime does), or through a WiFi mesh network where individual homes serve as the nodes (as Wire-Wire), says BMIT.
Although BMIT observes that many of the deployments are in trial phase, Fibertime has secured funding and commenced expansion, while iLitha recently secured social-impact investor funding to expand its footprint.
The more established FNOs − such as Openserve, Vuma and Frogfoot − have solutions for suburbs across a range of income levels, but are more focused on the significant opportunities presented by the middle-income suburbs, the firm says.
Other operators, such as Zoom and Herotel, continue to focus on smaller towns, it adds. BMIT’s Broadband Report also describes initiatives by satellite, mobile and wireless operators, in both the household and business markets.
Geerdts believes the new cohort of fibre operators are committed to providing a reliable, quality service with download speeds comparable to those in higher-income suburbs.
He notes that paying R5 for a period of access at home and nearby, at speeds of 50Mbps or more, is clearly a compelling offer.
“Both traditional and new-entry FNOs are contributing to narrowing South Africa’s deep digital divide – certainly in urban settings,” says Geerdts.
“They have responded to many challenges, with unique solutions aimed at developing sustainable and profitable business models. As the earlier chart shows, there is still considerable work to be done.”
Profile of fibre availability and uptake in urban households
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