Vumatel plans to provide 10 million homes in South Africa with uncapped 100Mbps fibre for R89 per month.
Vumatel CEO Niel Schoeman discussed the rollout plans on The Money Show with Bruce Whitfield, stating that they have already covered large parts of Johannesburg, and are now doing the same in Pretoria, Cape Town, and Durban.
These rollouts focused on affluent suburbs, however, while no fibre players provided connectivity in townships.
“We are inadvertently creating an information divide by building out fibre in affluent suburbs, but not really addressing the townships,” said Schoeman.
He said data is not affordable to people in townships, and that mobile operators have been “very naughty” regarding the price of data.
“Somebody had to look at the challenge to get people connected in the townships.”
He said Vumatel is confident it can deliver an uncapped, contended 100Mbps fibre connection for R89 per month.
One of the ways to reduce rollout costs and make fibre deployment easier is to use aerial fibre rather than traditional trenching.
It is also a logical solution, due to the unstructured layout and configurations found in townships.
“The plan is to get affordable broadband to the masses, and the cheapest method is to use aerial deployments,” said Schoeman.
“We want to bring broadband to every home in these townships, and open up the information economy.”
Why R89 makes sense
Schoeman said the average revenue per user on a prepaid SIM is between R60 and R90 per month.
With multiple people in one home, and individuals using multiple SIMs to get the best deals, they estimate the mobile spend per household in townships is between R350 to R400 per month.
This makes the R89 per month affordable for a township household, especially if the new service helps reduce reliance on mobile data.
Schoeman said while there is a big difference between the price of their suburban and township products, suburban users still get a great service at a reasonable price.
10 million homes
Schoeman said once the initial township rollout – in Alexandra – is complete, they will assess the take-up rate of the service before moving to new areas.
“We will then look at the subscriber numbers, how the payments work, then we will start with Diepsloot and 10 million other homes in the next two years,” said Schoeman.
He said they must ensure it is a financially-sustainable solution, and that it remains an apolitical initiative without government support.