Why Vumatel is unlikely to roll out fibre in Pretoria

Fibre rollouts in Johannesburg and Cape Town are progressing well and both cities are almost completely covered by fibre routes.

This is according to Vumatel CFO Kobus Viljoen, who was speaking to MyBroadband about the company’s network expansion.

Following Vumatel trenching its first fibre in Parkhurst in 2014, the company has expanded outward across Johannesburg and assessed each suburb it comes across to see if rolling out fibre is viable.

Viljoen said that with a fibre rollout, the first thing Vumatel will do is an analysis of an area to calculate what the costs will be to roll out their network there.

Once this is complete, Vumatel assesses the LSM of the suburb and starts to work with residents associations about the potential fibre rollout.

Marketing and awareness campaigns are then conducted, and if 30% of the people in a suburb state they will sign up for fibre Vumatel begins the build process. This includes obtaining the necessary wayleaves from local government.

This has resulted in Vumatel’s extensive network in Johannesburg users have access to today.

Rolling out in Durban and Pretoria

While Cape Town and Johannesburg fibre rollouts have progressed well, the same cannot be said for Durban.

In August, Vumatel was forced to stop work on its fibre network in the Pinetown area. This was due to “incidents of intimidation and threats made by various groups in KwaZulu-Natal”.

“It is not safe or practical for the contractors to continue working in the field at the moment,” said Vumatel at the time.

Viljoen said that while other fibre companies have started work in Durban on networks, many have withdrawn from the area.

Vumatel, however, is nearing completion of its Durban build. It is also working with local communities in Durban on a skills transfer programme to pass on relevant industry skills to residents in the area.

Moving north to Pretoria, and for Vumatel the question as to whether it must lay fibre in the area is based on a very different set of circumstances.

Viljoen stated that Frogfoot, a subsidiary of Vox, and Openserve, a Telkom Group company, have rolled out extensively in the city and as a result it is unlikely Vumatel will expand into the area.

He said that if a fibre company builds a small network or operates in isolated pockets, Vumatel will build a network in that area if it is viable.

The existing extensive coverage in Pretoria from Openserve and Frogfoot, however, means that many residents who want fibre already have a line in their home – making it much more difficult for Vumatel to sign up clients.

The expansion of Vumatel’s network across the country recently received recognition from the business community, and it was crowned the best medium-sized company at the 2018 South African Venture Capital and Private Equity Association Industry Awards.

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Why Vumatel is unlikely to roll out fibre in Pretoria