Biggest fibre networks unveil plans — including bad news for prices

South Africans should not be holding their breath for better fibre-to-the-home (FTTH) prices in 2024, according to feedback from several of the country’s largest fibre network operators.

On a per-Mbps basis, the price of an FTTH connection in South Africa has decreased substantially since the Covid-19 pandemic spurred demand for higher bandwidth.

However, many operators have also been cutting their entry-level packages and migrating customers to higher-end options.

Initially, many of these upgrades came at no extra cost to customers.

While many users welcome more speed, customers who don’t require greater capacity feel forced to pay for more expensive lines that far exceed their needs.

On the flip side, many major fibre network operators (FNOs) are increasingly focused on bringing more affordable products to lower-income areas.

This has resulted in specialised products — usually offered on a prepaid basis — extending into townships and less affluent suburbs.

By the end of 2023, there were only around 1.7 million confirmed FTTH-using households in South Africa, according to data from seven of the nine biggest FNOs.

That is just a fraction of the 17.8 million households in the country, as estimated by Census 2022 data.

MyBroadband asked eight of South Africa’s biggest fibre networks for their plans on pricing, new rollouts, and other ventures in 2024.

Below are the details that the FNOs provided. The country’s second-largest FNO, Openserve, did not provide feedback by the time of publication.

Vumatel

Vumatel said it expected changes in effective per-Mbps pricing of FTTH in South Africa without elaborating on whether these would be decreases or increases.

However, it explained that FNOs were under pressure to ensure their investments benefit a larger demographic, which is resulting in more prepaid services and flexible payment options becoming available.

Vumatel said due to economic conditions in the past year it had conducted a more in-depth review of its regions to ensure it could find products to unlock more value within underserviced areas.

“Our focus remains on the commercialisation of our products within dense lower-income areas, such as Alexandra, Johannesburg and Kayamandi, Stellenbosch.”

“Furthermore, we are committed to ongoing investments in specific regions, ensuring that our network can seamlessly support both current and future FTTH requirements.

“This involves upgrading physical fibre infrastructure, optimising nodes supporting the network, enhancing overall capacity and resilience.”

“Our focus includes expanding capacity and incorporating various layers of resilience across our network where possible. Vumatel is also actively investing in Disaster Recovery Plan (DRP) capabilities, reinforcing our commitment to ensuring service continuity under various disaster recovery events.”

The overarching objective is to provide a quality Internet service in these communities, offering an experience comparable to that of residents in the ‘leafy’ suburbs.

Regarding its other plans for 2024, Vumatel said it was currently implementing a new CRM system — Salesforce — to enhance customer satisfaction and facilitate improved automation and visibility to Internet Service Providers (ISPs) on our network.

“This initiative aims to empower ISPs serving their customer base more effectively,” Vumatel said.

MetroFibre

MetroFibre said due to the increasing cost of doing business due to load-shedding, inflation, and the exchange rate, fibre retail prices in 2024 will likely follow the same inflationary increases as other goods and services in South Africa.

The operator added that the price-per-Mbps of FTTH packages might continue to drop, but it did not anticipate further price adjustments on its packages in 2024.

MetroFibre recently revamped its FTTH offering, separating its network into two categories.

With regards to its other plans for 2024, MetroFibre said it was slowing down its build programme to focus on increased take-up in areas where its network was already available.

In Cape Town, it will aim to increase sales on its fibre-to-the-business network.

Other focus areas include enhancing customer service and providing quality fibre products in underserved areas.

The operator also hopes to complete builds in Thembisa in Gauteng and New Brighton in the Eastern Cape.

Frogfoot

Frogfoot chief product officer David Coleman said rising input price pressure  — including the weak exchange rate impacting equipment and material as well as investment in power and maintenance — continued to put pressure on FNOs’ wholesale pricing to ISPs.

Coleman said the operator would keep pace with the market by offering appropriately priced products that appeal to different market segments.

One of Frogfoot’s big goals in the year ahead is to connect 60,000 homes in the Western Cape’s Vrygrond and Philipi areas with its Rise fibre-to-the-community prepaid fibre service by August 2024.

“This initiative is also exciting as we can already see the benefits of the ecosystem of value created by involving members of each community in the construction, installation, maintenance, registration, education, and use of fibre.”

Coleman added while Frogfoot would continue to service its existing footprint and drive further uptake, it has also started to venture into alternative market segments and product configurations.

“We will continue to drive adoption [for these] in 2024,” he said.

“Remaining reliable to an ever-increasing service base will always be a high priority, as well as finding value for ISPs and the users they service on our network.”

Octotel

Octotel chief operating officer Scott Cunningham said the company did not anticipate prices dropping in 2024 on Octotel’s core products.

“The industry has shown in recent months that the main driver in 2024 will be in the introduction of new products focussing specifically on the value proposition to the end customer,” Cunningham said.

Octotel plans to continue its current network rollout rate through 2024 while ensuring it remains an FNO of choice in the Western Cape.

Evotel

Evotel general manager Bradley Bekker said he expected fibre pricing to be a hot topic in 2024 in light of the current economic climate.

“Most FNOs, including ourselves, will continue exploring ways to add value in many ways and not just from a commercial perspective,” Bekker said.

He did not speculate on any specific moves in pricing.

Bekker said Evotel was looking at ways to provide more proactive service and improve its network monitoring systems to contribute to faster resolutions of faults.

“We call it ‘walking a mile in the customer’s shoes’. [Through this] thinking, we can continue to be the reliable service provider that contributes and gives back to communities that our clients have come to know and love.”

Bekker said Evotel could not divulge any information on rollout plans as these were still in their infancy.

Zoom Fibre

Zoom Fibre expects FTTH prices to stabilise so that providers can ensure “continued quality service”.

The operator plans to expand its prepaid products significantly in the upcoming year, ensuring more options and accessibility for a broader user base.

Zoom Fibre could not divulge its rollout strategy as it was still in the planning stage.

The operator added it was committed to continuously serving communities with reliable, high-speed connectivity to improve lives and bridge the digital divide.

Herotel

Herotel told MyBroadband that it did not observe a decrease in FTTH prices in 2023, contrary to industry claims, and instead saw FNOs and ISPs increase prices.

Herotel is the only closed-access FNO in the country’s top 10 biggest providers.

Whereas the other networks resell their lines wholesale to third-party ISPs, Herotel deals directly with end-users through its own ISP business.

The company said it would carefully review its pricing strategy in 2023, considering factors such as inflation and forex fluctuations.

“Any developments will be communicated transparently and accurately to our stakeholders,” said Herotel brand manager CP Esterhuyse.

One of the operator’s major ventures will be the launch of Hero Business, a business fibre solutions provider.

The company is also evaluating strategic opportunities for expansion in 2024.