Municipalities are milking fibre companies to balance their budgets

In some metropolitan municipalities in South Africa, it is more expensive to apply for rights of way from the local government to roll out fibre than it is to actually dig the trench and lay the cable. This is according to Thinus Mulder, the CEO of Dark Fibre Africa.

Mulder was speaking to attendees of an Absa Insights event on telecommunications, media, and technology. The event was a collaboration between the FTTx Council and Digitalthings.

According to Mulder, some municipalities have hiked their fees to apply for permission to trench along public roads—known as “wayleaves”—by around 5,000%.

As a result, wayleaves have become a significant cost factor for DFA, and the company has stopped rolling out in some metros because it can’t afford to anymore.

“I think metros are using this to balance the books,” he said.

When asked to “name and shame” the metros that have hiked their wayleave application fees so significantly, Mulder said that he could not reveal who he was referring to.

“They are still clients,” he said.

Government an obstacle for FTTH in South Africa

Mulder’s comments came after the co-founder and CEO of FTTx Council Africa, Juanita Clark, told attendees that the fibre industry is still facing obstacles in three key areas:

  1. Getting local governments to grant wayleaves
  2. SANRAL making it difficult to roll out along their roads
  3. The delay of Rapid Deployment Regulations, which are now 14 years late

The challenges the fibre industry faces aren’t only as a result of the ANC-led national government or the policies of one particular political party.

Wayleaves remain an issue in South Africa’s biggest cities — Johannesburg, Tshwane, and Cape Town — which have DA-led local governments.

“We need to make some serious decisions about our future,” Clark said.

“We all need to make a mental decision to create an industry that is sustainable, that is based on standards, that will survive for future generations long after we are gone.”

Now read: Vumatel overtakes Openserve as biggest fibre-to-the-home operator in South Africa

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Municipalities are milking fibre companies to balance their budgets