BMIT’s latest South African Broadband Report explores the dynamic new set of market players, who have been testing innovative, low-cost fibre deployment models. Chris Geerdts,  Managing Director at BMIT, says these companies are dedicated to providing quality, affordable connectivity to lower income households, as the upper income market saturates.

BMIT’s chart, above, illustrates how the vast majority of homes in upper income urban areas are already passed by at least one fibre network, and around 50% of them are already connected. However connect-rates drop dramatically to under 20% in middle income suburbs, whilst in the lower income market it is under 1%.

In the lower income market, the new generation of Fibre Network Operators (FNOs), such as Fibertime, iLitha and Wire-Wire (among others), has been actively testing innovative models which maximise social impact on a sustainable, profitable basis. BMIT has seen creative design concepts and pricing and distribution models adapted to this target market.

The models are based on reducing the cost-per-connection through a variety of innovations, using aerial fibre, in areas of high housing density. For this market, pay-as-you-go options are added to the traditional prepayment options, to buy access on a duration basis of a day, week or month. Fibertime even has a one-hour access option and has introduced a crypto-based micropayment system to enable such payments.

Some of these projects also incorporate Wi-Fi roaming on a mobile device throughout the suburb, in addition to the fibre installed in each home; the Wi-Fi can be enabled either by means of Access Points mounted on the street poles (as Fibertime does), or through a Wi-Fi mesh network where individual homes serve as the nodes (e.g.Wire-Wire)

Although BMIT observes that many of the deployments are in trial phase, Fibertime has already secured funding and commenced expansion, whilst Ilitha recently secured social-impact investor funding to expand its footprint. The more established FNOs such as Openserve, Vuma and Frogfoot have solutions for suburbs across a range of income levels, but are more focused on the significant opportunities presented by the middle income suburbs. Other operators, such as Zoom and Herotel, continue to focus on smaller towns. BMIT’s Broadband Report also describes initiatives by satellite, mobile and wireless operators, in both household and business markets.

Geerdts believes that the new cohort of fibre operators are committed to providing a reliable, quality service with download speeds comparable to those in higher-income suburbs. He notes that paying R5 for a period of access at home and nearby, at speeds of 50Mbps or more, is clearly a compelling offer. Both traditional and new-entry FNOs are contributing to narrowing South Africa’s deep digital divide – certainly in urban settings. They have responded to many challenges, with unique solutions aimed at developing sustainable and profitable business models. As the chart shows, there is still considerable work to be done.