Given the saturation of the upper-income market, several fibre network operators (FNO) are testing innovative, low-income deployment models.
This is according to BMIT’s latest South African Broadband report, which highlights that at least one FNO has passed 3.1 million of the 3.2 million addressable homes in the upper-income South African market.
Of the 3.2 million million homes, 48.7% have been connected.
However, BMIT’s research shows that these figures rapidly drop for the middle and lower income brackets.
Of the 4.3 million addressable middle-income homes, only 2.2 million have been passed, and 16.5% have been connected.
There are 5 million addressable lower-income homes, according to BMIT. However, only 100,000 have been passed, and 0.4% are connected to a network.
BMIT points to several FNOs that have been testing models of deploying infrastructure to maximise the social impact while running a sustainable business to try and capture this market.
These include Fibertime, iLitha, and Wire-Wire, among others.
These FNOs employ models focused on reducing the cost-per-connection, such as using aerial fibre in high-density areas, says BMIT.
Customers are also offered pay-as-you-go options and prepayment options that allow them to buy access on a daily, weekly, or monthly basis.
Companies such as Fibertime and Wire-Wire also offer Wi-Fi roaming in certain areas, allowing customers to connect via access points on street points or a W-Fi mesh network with individual homes serving as the nodes.
The report argues that while larger FNOs such as Vuma, Frogfoot, and Openserve offer services to various income levels, they are currently focused on the middle-income segment.
BMIT managing director Chris Geerdts said these FNOs are committed to providing services in lower-income areas comparable to those in higher-income suburbs.
“Traditional and new-entry FNOs are contributing to narrowing South Africa’s deep digital divide,” BMIT said.
“They have responded to many challenges with unique solutions aimed at developing sustainable and profitable business models.”
The chart below indicates the number of addressable homes in each income segment along with the number of homes passed and the percentage of addressable that have been connected.
