Fibre to the home obstacle in SA: uncertainty

Some South African operators have said that regulatory uncertainty is one of the biggest barriers to investment in fibre to the home (FTTH) infrastructure.

Fibre to the home is slowly gaining momentum in South Africa, with Telkom, Vodacom, MTN, and others staring to roll out FTTH networks.

According to some industry sources, this rollout could be stimulated if there was more regulatory certainty.

One source, who asked to remain anonymous, said his company would have invested heavily in FTTH if there was regulatory certainty.

He said the lacklustre performance of the Independent Communications Authority of South Africa (Icasa) was one of the main reasons for the slow FTTH rollout in the country.

Neotel agreed, saying the uncertain regulatory environment surrounding open interconnect systems for residential and office developments was definitely holding back significant investment in FTTH.

“Even in large office parks and enterprise properties there have been numerous models introduced to ensure exclusivity to protect fibre investment,” said Neotel.

“In most cases this exclusive approach limits competition and inflates the cost of delivering services to customers in these office parks.”

Neotel said that until the regulatory guidelines for fibre sharing was clear, the advantages of sharing fibre infrastructure would not be tangible and exclusivity would dominate the FTTH market.

“FTTH is already a very risky business model and any additional risk causes many investors to delay their decisions,” said Neotel.

Telkom said it was rolling out fibre, and that the regulatory environment was not, currently, constraining the company.

However, Telkom added it did identify a need for regulatory certainty and the protection of investment.

Not everyone agrees. Vodacom, which is busy with fibre rollouts in many areas, said it was “not aware of any regulatory issues impacting the roll out of FTTH”.

MTN was asked for comment, but the company did not respond by the time of publication.

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Fibre to the home obstacle in SA: uncertainty