Having access to the internet is fast becoming a way of life versus just being a nice-to-have.
This has given rise to a greater demand for connectivity from both South African consumers and businesses alike, with fibre being one of the fastest growing and most competitively priced options.
While fibre is by no means a new technology, having existed in the South African market for at least six to seven years already, the difference now is that it is becoming more freely available to end-users as a result of the growth in the number of fibre operators.
Fibre infrastructure is being rolled out, primarily in major metropolitan centres and is becoming more easily accessible in response to the demand for fast, reliable, internet connectivity.
This demand is, in part, driven by the exponential growth in online content from a consumer perspective and a greater need to consolidate ICT spend with a converged service in the business segment.
In South Africa, a few niche operators have taken advantage of this need for connectivity with players such as Vumatel being one of the biggest catalysts for fibre adoption in the consumer space since 2014.
Vumatel and Telkom – who quickly adopted the same strategy, experienced greater investment interest following the surge in demand enabling an aggressive rollout strategy of FTTH.
Key to the economic benefit of this strategy for operators is that fibre optic technology will not easily need to be replaced for the foreseeable future.
Often referred to as the “endgame technology”, fibre infrastructure offers a very attractive business model over the longer term.
Telkom has stated that it plans to have one million homes covered by its network by the end of 2018, and approximately 140 000 by the end of 2016.
Vumatel is targeting a further 200 000 homes, Frogfoot is aiming for 100 000, and a further 40 000 made up by other smaller providers. Combined, we could see approximately half a million homes with access to a fibre network by the end of this year.
The targets being set by the infrastructure providers are aggressive, and the more rapid deployment of the network and seemingly increased interest in funding will mean potentially reaching those goals with relative ease.
To put this growth into perspective, in just seven years it is anticipated that 500 000 homes will have access fibre and by 2020 it could be as many as 3-million. This compared to 1,3-million homes that have adopted ADSL connectivity over a twelve year period.
As with the nature of new technologies, higher LSM markets tend to be first to experience these advances. As these rollouts continue, and the number of connected areas grow outwards, more and more segments will ultimately get connected.
With the proliferation of smart devices in the market, people living in outer areas will continue to have connectivity via their phones and technologies such as 3G and LTE will to dominate and keep these areas connected for quite some time.
Butler believes that South Africa is becoming more competitive on the global stage, both from a technology and pricing perspective. As the demand for connectivity and the technology enabling this increases, so we will see prices drop.
Source: EE Publishers