South Africa’s fibre ceasefire

Following years of substantial expansion, many of South Africa’s major fibre network operators (FNOs) only grew their networks marginally in the first half of 2024.

The proverbial “fibre land grab” seems to have cooled as much of the conventional addressable market in affluent suburbs has become saturated.

According to research by the Internet Service Providers’ Association of South Africa (ISPA), an estimated 33 million of 60 million residents had access to fibre-to-the-home (FTTH) from at least one network.

More than half of these households had more than one FNO to choose from.

Late in 2023, several major FNOs told MyBroadband they would relax their build programmes and focus on increasing uptake in areas they already covered.

When it comes to measuring the size of a fibre network, the two most important metrics are homes passed and homes connected.

The homes passed number refers to how many residential properties have access to a particular FNO’s network, including those that are not connected to it.

The homes connected figure is a bit more complex. It can either refer to the number of homes with a line from that FNO installed into their homes or how many homes have an active connection with that FNO.

The latter is arguably the better way to measure this number because it provides a more accurate view of the connectivity ratio, a third important metric.

The connectivity ratio should show what portion of the households with access to a particular network are actively using it.

In that way, it reflects how economically sensible an FNO’s rollouts were and how successful it and its ISP partners were at convincing potential customers to buy a fibre service.

MyBroadband recently asked South Africa’s biggest FNOs for their latest homes connected and passed figures and whether their focus was on buildouts or improving connectivity ratios.

Herotel, MetroFibre, Octotel, Openserve, Vodacom, and Zoom Fibre provided feedback.

The table below contains their latest key metrics with the most recent available data from the four other biggest FTTH networks in South Africa.

Openserve

The FNO with the biggest expansion during the first half of the year was Openserve, which grew its homes passed figure by 31,487 in the first quarter of the year.

Assuming it added roughly the same number in the second quarter, it will have expanded its network by roughly 5.31% in the first half of 2024.

Openserve is playing catch up with Vumatel, which had over double its homes connected figure late last year.

However, Openserve is breathing down Vumatel’s neck when it comes to homes connected, with a gap of less than 100,000 households.

Herotel

Herotel only increased its network coverage by 2.8% during the first half of the year.

However, its homes connected figure increased by 21.1%, resulting in a big connectivity ratio improvement. That has been the FNO’s primary focus in 2024.

It also added 10,000 customers in July, a new Herotel record.

MetroFibre

MetroFibre extended its coverage by about 15,800 households, a 3.15% increase over its tally at the start of the year.

The FNO told MyBroadband that it was approving new projects and builds on a case-by-case basis.

“Our focus is also on driving the connectivity ratio,” MetroFibre said. “Our growth is not only about having the capital to rollout infrastructure, but also developing solutions for the changing needs of our business and residential customers, and specifically underserved communities.”

“The target is areas that do not currently have fibre, near to our current network, where there is demand for fibre Internet connectivity.”

Octotel

Octotel’s homes passed increased by 10,000 to reach 360,000, working out to a 2.85% jump. The company told MyBroadband its rollout strategy continued as normal.

“Focus has, and always will be heavily focused on customer connections, but if the build rate slows down, logically your connected ratio will increase,” the FNO said. We focus on both and the relevant targets attached to each.

Octotel was the only FNO of the five that provided feedback that recorded a decrease in homes connected — from 15,000 to 12,500.

The company acknowledged it had experienced a marginally higher increase in customer churn than in 2023, but maintained that this was offset by the success of the Octotel product offering and pricing structures.

Zoom Fibre

Zoom Fibre’s homes passed figure increased marginally from 191,000 in November 2023 to 191,636.

However, the operator told MyBroadband that it was currently focused more on improving its connectivity ratio than rapid expansion.

“We are continuously working to increase our connectivity ratio by offering competitive packages and exceptional customer service,” Zoom Fibre said.

Its strategy appears to be working, as its connectivity ratio improved from about 25% to 33.97% due to a jump in the number of homes connected from around 45,000 to 65,100.

Zoom Fibre’s connectivity ratio is now the third best of the nine biggest FNOs in South Africa, an impressive turnaround from being the second worst by this metric.

Vodacom

Vodacom’s fibre network expansion has ground to a virtual halt since 2022. Since then, it has only added about 2,000 homes and businesses to its coverage.

Between the start of the year and the end of June, it did not expand its fibre network at all.

It is currently in a transaction to merge its fibre assets with Vumatel and DFA, which will radically increase the size of its network.

Vodacom does not track its homes and businesses connected separately, nor does it distinguish between customers on its own network and those customers using other FNOs.

When combined, these customers tallied up to 187,737 by the end of June 2024.