Telkom fibre plans explained
Telkom’s latest financial results revealed that the company’s ADSL, VDSL, and fibre-to-the-home (FTTH) subscriber base declined from 974,181 in September 2018 to 781,255 in September 2019.
While Telkom grew its high-speed fixed-broadband (FTTH and VDSL) subscriber base from 206,000 to 213,000, it was at a much slower pace than previous growth.
This means Telkom is losing market share to fibre operators like Vumatel and Octotel, which continue to invest heavily in their fibre-to-the-home networks.
Instead of doubling down on its fibre network investment, Telkom has cut its capital expenditure on its fibre network by 36.3% over the last year.
Telkom has also cut the share which FTTH gets and is now pushing most of its money into fibre-to-the-base-station (FTTbs) to support its mobile ambitions.
Telkom said in its latest annual report that it has a strong focus on fibre-to-the-business and fibre-to-the-base-station because they have significantly higher ARPU than FTTH.
Telkom says it is not losing the fibre war
With Telkom rapidly losing market share in the fibre-to-the-home market, many observers speculated that Telkom has given up on fibre services.
Telkom CEO Sipho Maseko disagreed, saying the company is definitely not losing the fibre battle.
He said while they have shifted their focus from fibre-to-the-home to fibre-to-the-base-station, they are still the dominant fibre operator in South Africa.
Telkom told MyBroadband that the company’s focus is on the entire fibre access ecosystem, which is a combination of FTTbs, FTTB, and FTTH.
“The Openserve national fibre footprint increased from 161,100 km to 164,400 km over the last year,” Telkom said.
Telkom’s home broadband focus
Telkom said it is focusing on home broadband through multiple access technologies such as ADSL, VDSL, FTTH, and LTE.
“Telkom has commenced a migration program where it upgrades its customer base from ADSL to FTTH and LTE,” it said.
Instead of investing large amounts of money into new FTTH rollouts, Telkom decided to focus on homes connected to improve returns on capex.
“At half year end, we reported a connectivity rate of 42.5% on FTTH – the highest connectivity rate in the industry,” Telkom said.
The company added that fixed-line broadband lines are not a true reflection of Telkom’s market share in broadband, as these numbers exclude LTE.
“We are focusing on home broadband and we reported 2 million home broadband as at 30 September 2019. We do not believe we are losing market share in this segment,” it said.
Telkom fibre numbers
Here is a summary of Telkom’s fibre and broadband numbers as of 30 September 2019.
- Homes connected to fibre: 195,416 – an increase of 39.7% over the past year.
- Fibre connectivity rate of 42.6% – an increase of 35.6% over the past year.
- Fibre to the base stations connected: 7,388 – an increase of 7.4% over the past year.
- Ethernet businesses connected: 42,417 – an increase of 28.5% over the past year.
- Fixed-line broadband data consumption: 558 petabytes – an increase of 14.2% over the past year.
- Fibre to the home footprint: 458,905 homes passed – an increase of 16.7% over the past year.
- Fibre to the cabinet footprint: 2,421,145 – an increase of 5.9% over the past year.
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