From R1,249 to R9,000 per month for crossing a road

An analysis by MyBroadband revealed that renting a home with a 1Gbps fibre connection and wirelessly connecting to an office is cheaper than paying for only the connection in a business park.

We did this analysis after investigating the costs of upgrading to a 1Gbps fibre connection in our office park.

A few fibre network operators (FNOs) provide services in our office park, and one has started offering a 1Gbps connection.

This is a big upgrade from our current 100Mbps, and the initial pricing of R2,319 per month for an SMME looked attractive.

However, the story quickly changed when we asked for an official quote, and they realised we were based in an office park.

The provider said we had to buy a fibre-to-the-business (FTTB) service, which was significantly more expensive.

The installation cost was slightly higher, and the recurring monthly price jumped from R2,319 to R9,000.

A fibre-to-the-home (FTTH) service was even cheaper at R1,249 per month with an setup initial fee of R750.

That means home users can get a similar fibre service to business users for a fraction of the cost.

What was striking was that the higher price for an FTTB service did not offer significant benefits over an FTTH offering.

The FTTH product offered better customer support hours and on-site service times than the business terms.

The business fibre product also does not have a fair usage policy. In comparison, the home service warns against “excessive usage”.

Another benefit was that the business fibre product offered a static IP address. It is not clear whether the FTTH service offers this.

Here is a summary of the three products from the same fibre network operator.

• FTTH — This is a regular consumer fibre connection available for R1,249 per month for a 1Gbps connection.
• SMME — This business fibre connection is available at most addresses for R2,319 per month for a 1Gbps connection.
• FTTB — This business-specific connection is available in most office buildings or business parks for R9,000 per month for a 1Gbps connection.

For people familiar with the local fixed-broadband market, the big difference in pricing will be unsurprising.

MyBroadband has often reported on this pricing, and despite their best efforts, fibre network operators could not justify the significant disparity.

The reality is FNOs charge high prices for services in office parks because they can. Most businesses can afford the high prices and pay them, albeit begrudgingly.

There are many alternatives

There is nothing wrong with FNOs charging high prices for FTTB connections. They are for-profit businesses which adapt their prices to supply and demand.

They invested large amounts of capital to roll out fibre networks and can charge what they want for their services. That is how the free market works.

However, customers also have a choice. Many options are available to them, ranging from wireless alternatives to more novel approaches.

Many companies, such as Rain, Vodacom, MTN, and Telkom, offer affordable 5G products that can service most business needs.

Although these 5G products cannot match the stability and speed of fibre, they can save a small business with basic Internet needs thousands per month.

Another novel approach, which MyBroadband investigated for this article, is to rent an apartment across the road and install a 1Gbps connection there.

The same FNO, which offers the R9,000 per month 1Gbps FTTB service in our office park, offers an FTTH service for R1,249 per month in the same neighbourhood.

We found that we could rent an apartment for R5,200, install a 1Gbps service, connect the office wirelessly to the apartment, and save money.

Various companies make point-to-point connection hardware, but we have had good luck with Ubiquity equipment before, so we used their devices for the comparison.

The Ubiquity 60GHz/5GHz Pico radio is priced at R4,730 from Scoop and claims speeds of up to 2Gbps over distances up to 3km, which is more than enough for our use case.

If you think this will not work, we suggest that you read this article: We extended a Wi-Fi network over half a kilometre for less than R3,000 with impressive results.

The tables below show that you can rent an apartment with a 1Gbps FTTH connection and connect it to the office for less than paying for a similar FTTB connection.