According to several of the country’s biggest fibre network operators (FNOs), network expansions, price cuts, and speed upgrades are in the pipeline for home fibre users in 2023.

Fibre-to-the-home (FTTH) is one of the fastest and most reliable forms of residential broadband connectivity.

While you are still more likely to get FTTH coverage within affluent suburbs in major metros, FTTH in South Africa is no longer as rare as it used to be in smaller towns.

Certain operators are increasingly rolling out in these under-served locations.

Herotel, which relies primarily on faster, more cost-efficient aerial rollouts, focuses on providing FTTH in secondary towns.

Major operators have also introduced more affordable and flexible pay-as-you-go packages to townships and lower-income communities, like Frogfoot Air, MetroConnect, Openserve WebConnect, and Vuma Reach.

Several of these packages have entry-level prices well below R500 per month for a connection with a 20Mbps speed or higher.

We asked the country’s major FNOs about their plans for 2023.

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Herotel

Herotel told MyBroadband it wanted to continue growing towards becoming the largest fibre and wireless fixed broadband operator in secondary towns in South Africa, expanding to over 500,000 stands.

“We are also developing more products for our customers that go beyond pure Internet access,” Herotel said.

The operator said it expected the downward trend in FTTH prices to continue.

“We are also developing our in-house build methodologies that will take the cost to build a stand down from R4,000 to R1,500 a stand in a standard suburb,” Herotel said.

“In higher density areas, this will decrease even more.”

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Frogfoot

Frogfoot chief business development officer Shane Chorley said their big focus for the coming year would be rolling out into several new high-density areas around South Africa.

“This will likely be done through the use of aerial rather than trenched fibre, which is the standard deployment methodology in such areas,” Chorley said.

“It is not only more cost-effective but easier to install and maintain in high-density areas.”

“This makes the actual rollout of the network cost less per home, enabling more aggressively priced fibre Internet packages in the near future.”

Chorley also said Frogfoot was looking beyond South Africa’s borders for further growth opportunities.

“For example, several European countries still have a fairly low density for fibre usage,” he explained. “Even though they have good DSL connections, we believe there exists the opportunity to bring high-speed fibre to more homes.”

Chorley believes there could be more consolidation in the industry to solve the issue of overbuilt areas, where too many operators are running parallel networks, reducing the likelihood of having a profitable customer base in that location.

“Consolidation among networks is going hand in hand with consolidation in the ISP layer,” Chorley stated.

“While some smaller ISPs that offer niche products will remain independent, the rest will have to combine to compete sustainably.”

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MetroFibre

Among MetroFibre’s big goals include passing an additional 100,000 homes with FTTH. Areas nearest to current coverage with high demand will be the main target.

The operator aims to expand its network to pass an additional 500,000 homes by 2025.

It will also focus on its fibre-to-the-business (FTTB) build in Cape Town, which started rolling out in 2022.

In addition, MetroFibre is investigating an intermittent FTTH product for customers in underserved areas who don’t need an “always on” service.

“Here we’re looking at affordable top-up-packages that allow customers to pay only when they need it, removing the concern of lengthy contracts,” MetroFibre said.

The company already offers pay-as-you-go vouchers to lower-income households with its MetroConnect packages, providing a 20Mbps service with prices ranging from R20 for 24 hours to R400 for 30 days.

MetroFibre also told MyBroadband it was monitoring the market for the potential for further consolidation, with the view of acquiring other players.

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Octotel

Octotel CEO Trevor van Zyl told MyBroadband that the operator would not only roll out to more homes in the Western Cape but also explore and execute national network rollout opportunities, thanks to funding from RMB.

Key focus areas will be on providing fibre connectivity to previously under-serviced communities, offering innovative and industry-first products, retaining customers, and managing Octotel’s self-supplied carrier-grade transmission technology and services to the benefit of home and business customers.

Van Zyl said Octotel planned to launch its prepaid and pay-as-you-go fibre product offering during the first quarter of 2023.

He said although he didn’t expect existing fibre product prices to drop, he anticipated there would be more value for customers, with operators upgrading speeds while keeping prices the same.

At the same time, he believes this would provide an opportunity to introduce more affordable lower-tier products to new customers.

Van Zyl added that there would likely be more consolidation opportunities in the fibre market in the coming year.

“It is inevitable. However, we’ve also seen that there is significant friction from a completion perspective which will no doubt result in certain conditions or restrictions being imposed [by the Competition Commission],” Van Zyl said.

He added that there not only existed consolidation opportunities between mobile and fixed-line operators, like with Vodacom, Vumatel, and DFA’s Maziv venture, but there was scope for merging between FNOs themselves.

In the overall FNO market, Van Zyl believes that customer acquisition will be at the forefront of all operators’ objectives over the next 18 months.

“New network rollouts will slow as FNOs and ISPs focus on takeup and return on capital investment,” he said.

Van Zyl also said load-shedding would remain one of the biggest challenges to ensuring network uptime and performance, requiring networks to invest heavily in backup power.

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Openserve

Openserve said it had three general goals in mind for 2023.

Firstly, to continue enabling the digital ecosystem through “innovative connectivity” solutions. Secondly, to provide the “best customer experience in every interaction”. Lastly, to create a high-speed, scalable and cost-efficient network.

“Openserve will continue with its growth trajectory in the fibre market, increasing homes passed and homes connected with fibre,” the company said.

“Our aim is to make fibre accessible to all South Africans. Our targeted areas, therefore, spread nationally and across all segments, including individual customers and businesses.”

Openserve would not be drawn into speculation around pricing changes in the coming year, stating this would be impacted by “market forces”.

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Vumatel

The country’s biggest fibre network operator by homes passed and connected did not provide feedback to our query on its plans for 2023.

Source: Mybroadband