How the DA is hurting fibre-to-the-home in Pretoria

If you want to roll out fibre in South Africa, you will need to apply for “wayleaves” — permission from local municipalities to trench along roads or access other public infrastructure.

Fibre network operators in South Africa are complaining that some metropolitan municipalities are making it difficult and, in some cases, very expensive to apply for wayleaves.

While complaining over wayleaves is nothing new for networking companies, what is new is a set of fees and tariffs from the City of Tshwane municipality.

Tshwane, which is a DA-led local government, implemented changes to the way it handles wayleaves in 2018.

Of particular interest to the fibre industry was when Tshwane started requiring a security deposit of R250,000 per wayleave.

Besides being a lot of money to put up for a job that could cost R10,000 or less to complete, you also can’t simply apply for a single wayleave to span many kilometres of trenching. Operators must apply for wayleaves based on what they can dig open and close back up on a single day.

Tshwane increased the security deposit to R263,750 in July 2019, when it published a new list of various fees, charges, tariffs, property rates and taxes in the government gazette.

This year, Tshwane allowed the security deposit to be provided by way of bank guarantee — R1 million for five wayleaves, or R3 million for any number of wayleaves for the whole year.

While this has effectively capped the security deposit at R3 million per annum until June 2020, there is still a lot of uncertainty regarding the process of getting your money released, or under what circumstances it will be kept.

Another big concern is that Tshwane has introduced an annual per-kilometre fee for laying cables in the road reserve. For the year from July 2019 to June 2020, the fee is R211 per kilometre, per year.

For operators using the sewer or stormwater systems, the fee is R1,055 per kilometre, per year. Tshwane has not said what the fees are for.

It has also not said why only telecommunications operators are being charged these fees.

Sources in the fibre industry have told MyBroadband that Tshwane’s new wayleave tariffs have had a chilling effect on fibre roll-outs. Most fibre network operators have simply stopped rolling out FTTH in Tshwane because it is too expensive to.

“Tshwane is going to be left behind the rest of South Africa,” they warned.

Tshwane and the DA — No Comment

MyBroadband asked the Tshwane local government and the Democratic Alliance for comment on this article. Among the questions asked were:

  • Why are ECN utilities charged R15,000 per wayleave application and everyone else charged R2,110?
  • The security deposit amounts are very high — does this not make it impossible for new telecoms infrastructure players to enter the market in Tshwane?
  • How do the new per-kilometre fees work? Do ECN licensees have to pay the Tshwane municipality for every kilometre of fibre they have laid in the City every year?
  • Tshwane has budgeted R10 million for a fibre upgrade project in the the 2019/20 financial year. Will the service provider Tshwane selects for the project also pay the above fees for the necessary wayleaves?

DA Shadow Minister of Communications and Digital Technologies, Phumzile Van Damme, told MyBroadband that she has no knowledge of Tshwane’s increase in tariffs. She referred us to the office of the executive mayor of Tshwane.

Tshwane did not respond to multiple requests for comment.

Now read: Municipalities are milking fibre companies to balance their budgets

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How the DA is hurting fibre-to-the-home in Pretoria