We expect fibre prices to fall – DFA CEO

Speaking at an event in Sandton, Johannesburg, Dark Fibre Africa (DFA) CEO Thinus Mulder said he expects data prices for fibre packages to decrease as uptake in South Africa increases.

“I think we will eventually see fibre data prices falling as a result of increased uptake and capacity,” said Mulder.

He said fibre uptake by users is steadily increasing, making further infrastructure development viable and improving the potential for service providers to offer attractive pricing.

DFA is an open-access fibre infrastructure provider, and also provides fibre-to-the-business and various layer-two solutions.

Capacity

Mulder said that DFA’s fibre infrastructure is constantly expanding, and that improving technology allows it to densify its network at relatively little cost.

Additionally, improved competition in the fibre equipment market has allowed infrastructure providers like DFA to save on the costs of deploying fibre.

Mulder said that an increasing number of homes are becoming connected to fibre, and that there is potential for the technology to expand beyond more affluent suburbs where most fibre providers tend to focus.

DFA’s open-access model allows it to offer improved scaling and promotes service-based competition, which results in better offerings for end-users, he added.

Additionally, DFA is preparing for the deployment of 5G services and is currently working with various operators to run 5G trials using its infrastructure.

“We are working to develop a 5G strategy with various mobile partners,” said Mulder.

He said that mobile operators expect increased network densification to support the technology, but DFA projects this densification will be even higher than their projections.

“The mobile operators don’t see it as that high, but there could be densification of up to 8-10 times,” said Mulder.

Thinus Mulder

Rollout viability

Mulder also offered insight into the viability of rolling out fibre infrastructure in new areas, beyond the “safe bets” which were affluent suburbs.

DFA is particularly interested in expanding its infrastructure into the affordable housing market.

“We are working with a property developer to deploy infrastructure in the affordable income housing market, and we expect the uptake there to be as good as the leafy suburbs,” he said.

By installing fibre infrastructure alongside the physical development of the property, DFA can save on the considerable labour costs involved in trenching.

Currently, the majority of the cost involved in laying a metre of fibre – which comes in at R700-R800 – is labour.

Mulder added that at even lower-income levels, like Vumatel’s operations in Alexandra, fibre rollout can work if the capital expenditure is low and the uptake is good.

He explained that determining the potential adoption of fibre in an area is always crucial to deciding whether to roll out infrastructure there.

In certain cases, however, DFA will deploy fibre to an area and only have around 15% uptake.

Through continued marketing efforts by service providers and interaction with residents, though, this can improve to a level where the rollout becomes profitable.

Mulder said the uptake percentage required to make a rollout viable varies according to location and trenching costs, but it is usually around a 60% adoption rate.

Now read: How South Africans will pick their fibre speeds online and only pay for what they use

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We expect fibre prices to fall – DFA CEO