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Cape Town - Home broadband should be accessible as a utility rather than a status symbol, says an infrastructure provider.
"We do however believe that fibre should not be a premium product. It is ultimately an utility and investors should expect utility type returns for this kind of investment and the product must be priced accordingly," Niel Schoeman, CEO Vumatel told Fin24.
The company is building a last mile infrastructure fibre broadband network that seeks to alleviate the data demand crunch that has seen many South Africans frustrated with data access.
"Despite the large investment required, we believe fibre and connectivity in SA has been overpriced for far too long," Schoeman said.
For comparison, a basic Telkom broadband package starts at R219 per month for a 2mbps line, but that excludes line rental of R166.50 and a 10GB "soft cap".
Open access
You could buy the data from an internet service provider (ISP) such as Afrihost or MWEB, but in most cases, consumers have to rent a copper cable from Telkom.
But the Vuma network completely escapes the national operator.
"Our network is completely independent from Telkom at this stage. We do this so we can guarantee speeds and network quality, whilst avoiding the charges levied by Telkom Wholesale, which makes up a disproportionate part of the cost to access for customers," said Schoeman.
In addition, the company says its network is open access so that consumers can choose which service provider to use for internet access.
"We are an open access network: we provide the infrastructure to ISPs to access their customers, but do not offer any services ourselves. We simply provide the access to the customer.
"This effective sharing of the infrastructure by several service providers results in the most efficient use of capex (capital expenditure) as duplication of investment is eliminated, which means savings to the consumer," Schoeman said.
This policy is in-line with national broadband policy which seeks to build open access models.
Ambitious
According to the government's National Broadband Policy presentation to the Parliamentary Portfolio Committee in February, the vision for the country is "A high capacity, open access wholesale network that leverages existing (brownfield) infrastructure and private capital to reach underserved areas (greenfield) through voluntary incorporation".
In practice though, the open access principle may more easily apply to new fibre networks rather than legacy systems as the networks can be customised to the needs of emerging technologies.
Schoeman was unapologetic about his company's vision to tackle established players.
"We therefore aim to deliver fibre infrastructure which has far improved speeds at prices comparative to those of legacy copper systems such as ADSL, if not cheaper."
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