Rolling out fibre has become much cheaper in South Africa

Jan

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Fibre rollouts becoming much cheaper in South Africa

Major fibre network operators have seen a considerable decline in the cost of rolling out fibre-to-the-home in South Africa.

During a recent investor presentation by Remgro, Vumatel CEO Dietlof Mare explained that the operator's rollout cost had reduced from R18,000 per home with its first FTTH builds in Parkhurst in 2014 to under R4,000 in 2022.
 
During a recent investor presentation by Remgro, Vumatel CEO Dietlof Mare explained that the operator’s rollout cost had reduced from R18,000 per home with its first FTTH builds in Parkhurst in 2014 to under R4,000 in 2022.

That equates to a drop of almost 78% in rollout costs.
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So essentially the newer builds would be in the black within a year of rolling out. This is good for competition
 
So R4000 per house, but how much does Vuma make per house? Example on a 100/100 with Afrihost let's say, which is R929. How much of that is going to Vuma?

Basically how long does it take for that R4000 to be paid off before it starts making them a profit.
 
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Except it's not filtering down to consumers due to the local monopolies.
 
Vorastra said:
So R4000 per house, but how much does Vuma make per house? Example on a 100/100 with Afrihost let's say, which is R929. How much of that is going to Vuma?

Basically how long does it take for that R4000 to be paid off before it starts making them a profit.
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Biggest cost for ISPs is the network, so less than a year.
 
Vorastra said:
So R4000 per house, but how much does Vuma make per house? Example on a 100/100 with Afrihost let's say, which is R929. How much of that is going to Vuma?

Basically how long does it take for that R4000 to be paid off before it starts making them a profit.
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About 80% of what you pay your ISP, goes to the fibre provider. They make a lot of margin, but they have the banks to pay back, for the upfront capital.
 
Sapphiron said:
About 80% of what you pay your ISP, goes to the fibre provider. They make a lot of margin, but they have the banks to pay back, for the upfront capital.
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Some back of the napkin calculations for Vuma Reach which is available in my area (2021 build)

20mb - R399, ~15 months to be in black
50mb - R529 , ~11 months
100mb - R897 ~ 6 months

I see Openserve is currently rolling out on in a few areas and people in the highest tier seem to be migrating. There seems to be enough wiggle room to drop the 100mb to R750 and offer a higher tier for R999.

At R750 you're looking at a 8 months ROI so not much difference to the bottom line vs the existing pricing structure

This would all depend on how fast people are ditching Reach for Openserve though.
 
Prices on all materials went up 70% in the past few months.
 
Gaz{M} said:
Prices on all materials went up 70% in the past few months.
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Heard that Chinese suppliers have huge backlogs, so some companies are using Israeli suppliers which are magnitudes of times more expensive
 
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