Behind the scenes at Vumatel’s uncapped fibre trial in Alexandra

After facing years of unforeseen delays, Vumatel’s fibre broadband pilot in Alexandra is in full swing.

The project was the brainchild of Vumatel founder and former CEO Niel Schoeman.

Schoeman’s dream in 2017 was to provide 10 million homes with uncapped 100Mbps fibre for R89 per month.

This would not be charity or funded by cross-subsidising subscribers in poorer areas with profits from people in more affluent areas.

Vumatel’s premise from the beginning was that the product had to be sustainable to be successful.

Unfortunately, the Alexandra pilot was hit by several unforeseen snags.

Even though Vumatel said it had completed project planning by April 2018, it was still awaiting wayleave approvals from the City of Johannesburg by July 2019.

Interference by so-called “business forums” was also an issue. Although their existence is well documented, finding a legal solution to their disruptions was one of the challenges Vumatel had to overcome.

As a result of the difficulties in Alex, Vumatel ended up launching a different trial in Mitchell’s Plain in October 2019. This prepaid uncapped fibre product would eventually become Vuma Reach.

Since then, Vuma Reach has expanded to Retreat, Vosloorus, Soweto, Grassy Park, Blue Downs, and several Tshwane neighbourhoods, including Soshanguve and Danville.

At R399 per month for an asymmetric uncapped 20Mbps download / 10Mbps upload service, Vuma Reach didn’t live up to Schoeman’s original ambition — but it was undoubtedly a step in the right direction.

Vuma Key is an evolution of this model, where fibre is brought to homes via poles rather than trenches, and the scale and population density of areas help reduce prices.

Vuma Key trial. Vumatel mast in Alex behind rooftops. Photo: Jan Vermeulen/MyBroadband

For Vuma Key, the plan is to bring prices down to R99 per month for a fully uncapped asymmetric 20/10Mbps service.

In Alex, Vumatel is experimenting with several price points and use cases.

It has also implemented a reseller model where locals act as agents and first-line support. It calls these entrepreneurs distribution service providers, or DSPs.

For some installations, DSPs sell directly to individual tenants and homeowners, whereas for others, Vumatel deals with landlords of multi-unit dwellings who then resell the service to tenants.

Vumatel’s parent company Maziv and shareholder Remgro recently arranged a guided tour of its network in Alexandra for journalists to see for themselves what the pilot looks like.

In addition to seeing the deployments and the connections in action, we got to speak with residents directly and hear their experiences with the product.

Vuma Key trial. Mma Priscilla, landlord of a multi-unit dwelling, who offers fibre with the apartments she rents out. (Surnames redacted to protect identities. Photos used with permission.) Still from video by Marcin Zerwick/Broad Media Studios.

We learned that individual subscribers pay up to R250 per month for an uncapped connection.

The one landlord we spoke to said she pays around R500 per month for eight links into her multi-unit dwelling, which she then resells for R150. Six of her units were occupied when we spoke to her.

MyBroadband interviewed four households during our time in Alex, and each was full of praise for Vumatel.

They all said that the fibre connectivity had drastically reduced how much money they spent on data every month.

Having an uncapped connection also gave them unfettered access to streaming video for the first time, which one woman explained was good for more than just entertainment — her kids were at home rather than in the streets.

Others said the connection helped their children with their school work and that they had already seen a substantial improvement in their marks.

Vuma Key trial. Lorraine told journalists how fibre benefited her family. (Surnames redacted to protect identities. Photos used with permission.) Still from video by Marcin Zerwick/Broad Media Studios.
Vuma Key trial. Lorraine’s husband, Prince, told MyBroadband they’ve noticed an improvement in their child’s school marks. (Surnames redacted to protect identities. Photos used with permission.) Still from video by Marcin Zerwick/Broad Media Studios.
Vuma Key trial. Mona-Lisa told MyBroadband that having fibre saves her a substantial sum every month on data. (Surnames redacted to protect identities. Photos used with permission.) Still from video by Marcin Zerwick/Broad Media Studios.
Vuma Key trial. Manunga told MyBroadband that uncapped fibre allowed them to follow local and international news via video streaming. (Surnames redacted to protect identities. Photos used with permission.) Still from video by Marcin Zerwick/Broad Media Studios.

Vumatel also showed us what the fibre drops into the homes looked like.

To reduce costs and allow it to cover more homes, it brings a single fibre cable from a nearby mast to a central location in a cluster of houses, then runs Ethernet cables to Wi-Fi routers in each unit.

They explained that interference isn’t a major concern for the same reason that simply putting Wi-Fi access points on their poles wouldn’t work — the extensive use of corrugated iron in buildings ensured Wi-Fi signals don’t propagate far.

While Remgro strategic investments head Pieter Uys, Maziv CEO Dietlof Mare, and other Vumatel executives and managers on the tour were genuinely excited about the project, showing the pilot to journalists had another purpose.

Remgro and Maziv want to explain — by showing — why they went looking for an investor to inject additional capital into the company.

Vuma Key trial. Vuma ONT and additional Wi-Fi router with Ethernet cables running to individual units. Photo: Jan Vermeulen/MyBroadband

Uys explained that Remgro initially tried to attract foreign investment, mostly from financial institutions, and was in positive talks between 2018 and 2020.

However, when the Covid–19 pandemic hit, the international investors vanished. He said attracting foreign investors in the current climate has been challenging.

Vumatel’s debt currently stands at around R20 billion, and it can’t take out more loans to rapidly deploy infrastructure in areas like Alex.

For this reason, Remgro approached local suitors — and Vodacom came to the table with an attractive offer to take a 30% stake in Maziv for a combination of cash and assets.

Vodacom has offered R6 billion cash, with an additional amount (currently R3 billion) depending on Maziv’s valuation when the deal closes.

It will also contribute a chunk of its fibre assets to Maziv, including fibre-to-the-home, fibre-to-the-business, and fibre links connecting its towers.

Maziv and Vodacom have committed to making these fibre assets available on an open-access basis, whereas previously, it was mostly for Vodacom’s exclusive use.

Vuma Key trial. Pieter Uys, head of strategic investments at Remgro, grabbing the opportunity for a selfie with Mma Priscilla. Still from video by Marcin Zerwick/Broad Media Studios.

The Competition Commission has recommended against approving the deal, believing it would substantially prevent or lessen competition in several markets.

The companies must now make their case before the Competition Tribunal. Although it is not unheard of for the Tribunal to disagree with the Commission, the lack of approval from the Competition Commission makes it more challenging for Vodacom and Maziv.

Uys told MyBroadband that they only need the additional investment to fast-track rollouts to underserved areas like Alex.

He said that if the pilot proves successful, it would take Vumatel 12 months to roll out fibre across the whole township.

However, taking Vuma Key national would take ten years without a cash injection. Uys said this timeframe would be reduced to around three years if the Vodacom transaction were approved.

Vuma Key trial. Kwame Sejake, Vumatel Regional Network Owner, in front of the Alexandra Point of Presence. He looks so serious because we asked him about his excellent cable management — and he takes cable management very seriously. Still from video by Marcin Zerwick/Broad Media Studios.
Vuma Key trial. Vumatel mast with fibre drops. Still from video by Marcin Zerwick/Broad Media Studios.
Vuma Key trial. A narrow alleyway in Alex we followed to a unit where fibre was installed. Still from video by Marcin Zerwick/Broad Media Studios.
Vuma Key trial. A multi-unit dwelling with fibre installed. Still from video by Marcin Zerwick/Broad Media Studios.
Vuma Key trial. Dietlof Mare, Maziv CEO. Still from video by Marcin Zerwick/Broad Media Studios.
Dewald Booysen, Vumatel COO. Photo: Jan Vermeulen/MyBroadband.
Vuma Key trial. Alex can be dangerous, but people there are also friendly. Still from video by Marcin Zerwick/Broad Media Studios.

Now read: Vumatel and Huawei launching 50Gbps fibre in South Africa

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Behind the scenes at Vumatel’s uncapped fibre trial in Alexandra