Network providers have long lamented how costly it is to roll out their own fixed-line infrastructure in South Africa.
While much of the cost is due to the civil works needed to lay the fibre, the long delays in getting permission to dig trenches has also been a major factor.
However, in May 2014 wealthy Johannesburg suburbs started taking matters into their own hands – with Parkhurst putting out a request for proposals to fibre-to-the-home providers.
Armed with a survey conducted among residents and businesses indicating how many people were interested in fibre and what they were willing to pay, Parkhurst attracted the interest of several companies.
Vumatel won the bid, and the Parkhurst network went live in October 2014 – offering better prices than equivalent digital subscriber line deals from Telkom.
This raises the question: what does it cost to roll out FTTH, if it can be done to compete against Telkom’s established last-mile copper network?
Vumatel said to roll out “a high-quality, trenched solution” in a residential area costs them on average R700 per meter of fibre.
It said the cost can vary, depending on the density of the dwellings, the conditions of the sidewalk, and the the quality of the deployment.
Once fibre has been rolled out to the curbs of a neighbourhood, the individual homes and businesses must be connected.
For this, Vumatel charges an installation fee of R1,500 – although it costs them more.
Cybersmart said the least they can charge for an installation is R1,500, but on average it costs closer to R5,000 to get fibre into a house.
“To recover the R3,500 we need to insist on a 24-month contract,” said Cybersmart, explaining that to recover the R3,500 over the contract period (excluding interest) is R145 per month.
Vumatel said its cost to connect a home was “not as high as R5,000”.
Detailed cost break-down
Dark Fibre Africa (DFA) said the cost of curb fibre for the backbone of a neighbourhood network was about R700 per meter.
“To do a proper job in neighbourhoods will cost between R350 and R500 per meter for the fibre loop, and about R195 per meter for the link into the house.”
The company explained that if you work on an average of 15 meters from curbside to the house, it will cost R2,925 (15xR195) plus R1,500 for the equipment, which is much more than the typical R1,500 connection fee.
DFA said there are also other costs when running a fibre network that you never see mentioned.
“To ensure reliability of the connection, you need maintenance teams 24/7. On average that works out to about 80c per meter per month.”