How do fibre cable installation companies recoup thei rinvestment and make a profit?

[isie]

Was just wondering how do companies like Vumatel , Metrofibre etc get paid after laying the cable, do the ISP's pay them a rental or is it like a Per GB cost.

 

[eddief1]

Openserv charge a line fee + charge not per a gigabyte but per megabit per second to breakout of their network core (IP Connect), this gets billed to the ISP...costs for IPC are high

Other providers simply charge a line fee...think about that.

Rolling out fibre is freak expensive (civil works), and only charging between R250-500 per line it's not quick to pay off the initial investment, completely dependent on uptake though.

 

[Jet-Fighter7700]

next question, at what point will all these fibre companies start closing down?

as at some point fibre will reach saturation point, and EVERYONE will have fiber....

 

[Sinbad]

Was just wondering how do companies like Vumatel , Metrofibre etc get paid after laying the cable, do the ISP's pay them a rental or is it like a Per GB cost.

Vumatel charges the ISP for your line, and the ISP passes that on to you in your monthly cost.

 

[eddief1]

next question, at what point will all these fibre companies start closing down?

as at some point fibre will reach saturation point, and EVERYONE will have fiber....

They charge for the line per a month..not once off

There will however be a point where they all start consolidating as the smaller companies get bought out.

 

[DTBA]

next question, at what point will all these fibre companies start closing down?

as at some point fibre will reach saturation point, and EVERYONE will have fiber....

in South africa we might be dead before that happens....

 

[calypso]

You can have more then one provider coming to a house. People might get tired of Openserve and ask for other providers to lay more fiber, or vice versa.

 

[cavedog]

Also after installation has been paid off (the initial investment) then the only monthly expenses the fibre provider would have is maintanance and network capacity.

The price might come down after a few years but it will never be free so once the initial investment has been paid off and the numbers stay relatively the same they probably will be smiling all the way to the bank.

 

[Nerfherder]

Also after installation has been paid off (the initial investment) then the only monthly expenses the fibre provider would have is maintanance and network capacity.

The price might come down after a few years but it will never be free so once the initial investment has been paid off and the numbers stay relatively the same they probably will be smiling all the way to the bank.

Yes, this is the business model. Its the reason why there is so much fighting over turf.... its the long term income they are after.

Also, once they have laid cable in the area it does not make sense for anyone else to lay, so any new installations they automatically get.

 

[coop]

While everything written here is true, there is also the future business opportunities the fiber will bring. For example, putting CCTV cameras into complexes and streets then allowing access to them by the approved security companies and insurance companies that want to verify theft of goods. Providing a means to supply the same users with TV services and telephone services over the fiber that is independent of the internet connection. I'm sure there are many other sources of income also to come in the future.

 

[savage]

Also, once they have laid cable in the area it does not make sense for anyone else to lay, so any new installations they automatically get.

Don't quite know about not making sense, as having competition on the actual infrastructure (and choice) isn't a bad thing. Here in CPT at least, CoCT makes it very, very difficult for someone to roll out where another has already.

I'm really hopeful for regulations within the next few years which would give access to either ducts, and/or the direct fiber though. Hopeful, but not holding my breath either.

 

[isie]

Don't quite know about not making sense, as having competition on the actual infrastructure (and choice) isn't a bad thing. Here in CPT at least, CoCT makes it very, very difficult for someone to roll out where another has already.

I'm really hopeful for regulations within the next few years which would give access to either ducts, and/or the direct fiber though. Hopeful, but not holding my breath either.

so far i've noticed in some areas when vuma lays cable underground metro goes overhead cable

 

[Gordon_R]

Here in CPT at least, CoCT makes it very, very difficult for someone to roll out where another has already.

I was told by the Octotel guy last week, that when they dig up the road, the terms imposed on them by the CoCT are that any other company must be given the opportunity to put conduits in the same trench. This makes sense, because digging up the road multiple times would be madness.

AFAIK they are then given 6 months exclusive lead time, after which other companies can blow fibre through their conduits in the same trenches.

 

[Sopbeen]

AFAIK they are then given 6 months exclusive lead time, after which other companies can blow fibre through their conduits in the same trenches.

This is weird. We've got Telkom installed, with Vumatel busy digging up the trenches. We just received a Octotel notice in the postbox... They did not state 6 months waiting time. The flyer implied that they will be starting the installation very soon.

Vuma is trenching on the opposite side of the road to Telkom's fibre. It seems like Octotel partnered or has a understanding with Vuma.

 

[savage]

I was told by the Octotel guy last week, that when they dig up the road, the terms imposed on them by the CoCT are that any other company must be given the opportunity to put conduits in the same trench. This makes sense, because digging up the road multiple times would be madness.

AFAIK they are then given 6 months exclusive lead time, after which other companies can blow fibre through their conduits in the same trenches.

I've been told that is what they WANT to try and achieve yes (something similar). I am yet however, to see one instance of where this is actually happening.

The problem with this, is that there's no cost imposed on CoCT's attempted solution. So, ACME nuts and bolts dig up the trenches, and now ACME Tooth Fairy comes and say OK. You're digging, here's my ducts - let's put it in. Nothing stops ACME nuts and bolts from charging ACME Tooth Fairy (which is reasonably expected) to install the ducts on their behalf, in their trenches. That's all nice and in theory, yes, it works.

However, as the industry isn't regulated, and as costs aren't set in the relevant acts, nothing stops ACME nuts & bolts from charging ACME Tooth Fairy, R2K per meter, to install their ducts. Unfortunately, that is precisely what is happening too.

It is therefore, cheaper for ACME Tooth Fairy to just trench again, instead of using CoCT's "idealistic" and "opportunistic" methods to get them to share... The simple fact of the matter, is that these guys WILL NOT share openly, nor fairly, until they are forced to do so.

Hell, how many years later, and we're STILL waiting on Telkom to share the local loop through LLU. It's never going to happen.

 

[pinball wizard]

next question, at what point will all these fibre companies start closing down?

as at some point fibre will reach saturation point, and EVERYONE will have fiber....

The word you are after is consolidating, not closing.