Telkom’s impressive fibre drive

Telkom’s annual results reveal that Openserve’s fibre infrastructure passed 839,691 homes with 389,109 homes connected on 31 March 2022.

It is a substantial increase from a year ago when Openserve passed 549,957 homes with fibre and had 281,065 connections.

The rapid growth in Openserve’s fibre network rollout means that its active fibre connectivity rate declined from 51% to 46.3%.

Connectivity rate is linked to how recently Telkom installed a fibre network in a region — the more recent the network rollout, the lower the connectivity rate.

At 46.3%, Openserve’s connectivity rate is still the highest in the industry. Vumatel, for example, has a connectivity rate of 30%, and Frogfoot’s connectivity rate is 38%.

“With the highest FTTH connectivity rate of 46.3% in the market, we continued to accelerate our fibre rollout,” Telkom said.

As a result, homes passed increased by 52.7%, while homes connected increased by 38.4% year on year.

“Going forward, we will focus on expanding our FTTH footprint while simultaneously connecting premises to ensure that we maintain a high connectivity rate,” Telkom said.

Openserve versus Vumatel

While Openserve is rapidly growing its fibre footprint, it is still lagging behind Vumatel, South Africa’s fibre-to-the-home leader.

Vumatel’s fibre network passed 1.5 million homes with 450,000 connections. Vumatel has added 400,000 homes passed in the last year alone.

Openserve has fallen behind Vumatel because of Telkom’s strategic decision in 2018 to slash its fibre investment.

Telkom decreased the capital expenditure on its fibre network from R2.112 billion in 2018 to R1.216 billion in 2019 and R703 million in 2020.

Telkom said its investment in FTTH was “rationalised as we focus on areas showing a propensity for higher connectivity rates”.

“We are prudent in our homes passed by fibre strategy and focus on homes connected.”

Vumatel and other fibre network operators (FNOs) made the most of Openserve’s fibre rollout slow down by doubling their investment.

In 2020, Vumatel and DFA secured a R16-billion financing package to assist with expanding their networks.

Telkom seems to have realised that it is missing out on significant opportunities in the fibre market and increased its fibre Capex to R1.14 billion in 2021 and R2.052 billion in 2022. It represents an 80% annual fibre Capex increase.

Openserve has also increased its product range to target new market segments.

The network operator launched more affordable Web Connect products with recommended retail pricing of R299 for a 10Mbps service and R369 for a 20Mbps service.

In April, Openserve added prepaid fibre products to its Web Connect portfolio, slowing customers to pay for a connection upfront.

Openserve’s fibre growth

The charts below show Openserve’s fibre network investment (Capex) over the last eight years, the number of homes passed, and the number of homes connected.

Openserve fibre capital expenditure

Openserve homes passed with fibre

Openserve homes connected with fibre

Now read: Openserve offering free 20Mbps uncapped fibre for 30 days

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Telkom’s impressive fibre drive