MWEB optimistic as broadband fibre rolls out

Cape Town - MWEB is quietly confident about its new broadband fibre to the home (FTTH) offering for South Africans.

Late last week, the internet service provider (ISP) launched retail packages for its high speed FTTH offering which offers the service in selected areas as part of a cautious roll-out plan.

"As this is a new offer in limited areas and FTTH is quite new we are uncertain of market penetration at this point. The more the better, obviously, as the FTTH experience is great for consumers," Carolyn Holgate, general manager of MWEB told Fin24.

MWEB is working with Telkom and private sector fibre provider Vumatel to deliver fibre connections in the Western Cape, Gauteng and KwaZulu-Natal.

The company offers pricing for the service starting at R999 per month for a 20mbps line speed capped at 100GB per month. That goes up to R2 849 on 100mbps capped at 500GB.

Consumption patterns

While the company's traditional ADSL service is migrating toward uncapped offerings, the fibre service may be a tough sell at the capped prices, but Holgate said that MWEB was moving the market forward on lowering the price to consumers.

"That will depend on area, network supplier, cost of IPC (IP Connect) in the case of Telkom, and cost of fibre roll out.  But the prices are not far off R1 000 already."

MWEB is contacting some of its 320 000 customers directly to offer the FTTH service where it is available, and in addition to the monthly rental, there is a once-off connection fee of R1 500. You will also have to buy a router, available from MWEB at R599.

High speed broadband is ideal for online gamers and those who want rich media content over the internet.

The timing of the MWEB FTTH services aligns neatly with trends in consumption patterns that see a shift toward video over the internet.

According to the Ericsson Mobility Report, video data traffic will grow at 45% per year to 2020 - that means that video consumption will be 17 times greater in the next six years than in the previous six year period.

"Another prominent driver is that video is becoming an increasing part of online content, such as news, adverts, and social media. Video is increasingly shared via popular social sites, such as Twitter," the Ericsson report says.

Universal broadband

In troubling news for broadcast TV, the Ericsson Consumer Lab reported that 2014 also saw a marked change in behaviour. More people watched streaming television than broadcast TV for the first time in the markets studied.

"Drivers for this change include the advent of 4G technology, the growth in smartphone and tablet usage, and a shift in consumer behaviour toward easy-to-use, on-demand services that offer cross-platform access to content," said the report which focused on the US, South Korea and Spain.

In SA, the government has targeted 2020 as a deadline for universal broadband, but a number of reports indicate that the country lags in terms of deployment.

The Institute of Race Relations, for example, found that broadband in SA was both slow and expensive.

The organisation found that average monthly costs of broadband in the country are $28 versus $3 in the UK. The latter country has broadband speeds of 24mbps compared to 4.8mbps locally.

Despite the current pricing, MWEB believes the FTTH service will find traction in SA.

"The high end capped prices are affordable and, from our research, in demand," Holgate said.

Here is breakdown of the MWEB FTTH service pricing:

Here are the suburbs where the service is available:

* Fin24 is part of 24.com, a subsidiary of Naspers. MWEB is a subsidiary of Naspers

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