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Cape Town – High installation costs for fibre broadband results in it predominantly being rolled out in wealthier suburban areas, says an expert.
Companies such as Telkom and Vumatel have been targeting more upmarket suburbs with fibre-to-the-home (FTTH) technology.
Telkom announced in September that it was building out fibre broadband networks in Johannesburg's Bryanston, Dunkeld and Houghton and Waterkloof in Pretoria. Meanwhile, FTTH outfit Vumatel built its first network in Johannesburg's Parkhurst and is rolling out in the likes of Hyde Park and Gallo Manor as well.
Fibre player 123Net, which is rolling out its network in Durban's upmarket area of Umhlanga, has explained how some fibre roll-outs currently happen.
“There are many new fibre players focusing on FTTH opportunities, although the reach and availability is substantially limited – some focus on gated and cluster communities specifically,” Kalin Bogatzevski, chief executive officer of 123Net told Fin24.
Subsequently, Fin24 readers have previously also asked why FTTH is only currently being rolled out in wealthier areas.
READ: Questions over Telkom's choice of fibrehoods
But an industry expert has said that different methodologies can add to the cost of delivery.
“Given that each area is slightly different, factors such as density of houses, and the distance of fibre run you would need to cover a suburb are also factors which influence the cost. Lastly, a point of presence to allow for better breakout of the services on top,” Shane Chorley, head of Carrier and Connectivity at Vox Telecom told Fin24.
He added that whether companies were delivering cable or wireless services, deployment cost is a significant factor.
“Each of those factors add up to give you a cost per home, and typically you would look at anywhere from about R6 000 up to in some extreme cases about R12 000 per home.”
However, Chorley said that an open access model with fibre broadband, which allows customers to choose their own service provider and even the ability from infrastructure providers to connect to other networks' exchanges, is one way to grow out these networks.
“By driving that open access wholesale model, this is allowing a lot more players to come on board and help drive the penetration and density, which ultimately drives the coverage in different areas,” said Chorley.
“In terms of the roll-out of connecting areas not previously connected, this has a knock on effect - the better you sell your network as you are starting, the better your coverage is to roll out to outer areas.”
South Africa has started to see a greater march towards open access especially with the country's biggest fixed-line player, Telkom, having this year spun off its wholesale broadband division Openserve.
Upon its launch, Telkom said that Openserve is intended to operate in a more open access environment.
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