Uncapped fibre to every home in South Africa for under R100 per month
Vumatel can offer lower-cost fibre products to low-income regions due to lower rollout costs, and its aim to provide uncapped fibre for under R100 per month appears to be going well.
This is according to Remgro’s head of strategic investments, Pieter Uys, who spoke about Vumatel’s fibre rollouts during an interview with Moneyweb’s Ryk van Niekerk.
Van Niekerk asked if Vumatel’s plan to offer uncapped fibre for under R100 per month would be the first product or service in South Africa where the tariff is linked to income level.
“We’re trying it, and it looks like it’s working,” Uys stated.
Uys explained that the costs associated with rolling out fibre infrastructure vary depending on the area.
He said that Sandton residents don’t want to see the fibre infrastructure at all, and as a result, rollouts in the area require the trenching of fibre.
“In a place like Khayelitsha, people are used to poles, and it’s not such a big problem, so we can roll out cheaper aerial fibre instead of trenching, which is much more expensive,” Uys said.
“That’s how we can — depending on the circumstances and suburb — offer a better tariff.”
Uys explained the concepts behind Vumatel’s Core, Reach, and Key offerings.
“If you consider Sandton-type leafy suburbs, there are around 2.5 million homes in that market category,” he said.
“But if you look at Soweto, Mitchells Plain — there are another five million households. Then if you look at areas like Alex, there are perhaps 10 million homes that can be connected.”
Vumatel describes its Core network as one aimed at higher-income households like those in “Sandton-type leafy suburbs”, while its Reach and Key networks are designed for lower-income families.
Pieter Uys, head of strategic investments at Remgro
The network operator determined that there is an opportunity to expand uncapped fibre connectivity to households earning between R5,000 and R30,000 a month and those earning less than R5,000 a month through its Reach and Key networks.
Uys said the launch of Vuma Reach and Vuma Key democratises broadband in South Africa.
“If you live in Sandton, you probably already have fibre, but what if you live in Alexandra? Then you only have access to prepaid mobile data, which is limited,” Uys said.
“You only have so much in a month. For example, if you download a YouTube video in HD quality — one hour would cost you a gigabyte. That’s already R200.”
“But what if we can roll out unlimited Internet with unlimited video in Alexandra for under R100 per month? Then we’re making it possible for people to truly be connected to the rest of the world. Then we’re making a difference,” Uys added.
He explained that Vumatel had already rolled out a pilot project in Alexandra, where residents can get an uncapped 20Mbps fibre connection for less than R100 a month.
Uys said they found high demand for data in areas like Mitchells Plain, Soweto, Vosloorus, and Alexandra.
“Just to give you an example, in Sandton — in neighbourhoods like Parkhurst and Parkview — a typical household uses 350GB data per month,” he said.
“In Mitchells Plain, where the homes are much smaller… the usage is up to 100GB greater than in Sandton. It shows you that the demand is there.”
Remgro holds a stake in Community Investment Ventures Holdings, which owns Dark Fibre Africa and Vumatel — together, their networks span over 43,000km.
“Infrastructure is a long-term investment. [DFA’s 13,200km and Vumatel’s 30,000km fibre network] cost us R31 billion over ten years to build,” Uys said.
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