{"id":550296,"date":"2022-01-16T13:00:02","date_gmt":"2022-01-16T11:00:02","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=550296"},"modified":"2022-01-14T15:33:25","modified_gmt":"2022-01-14T13:33:25","slug":"5-fibre-trends-we-could-see-in-south-africa-in-2022-including-solutions-to-deal-with-load-shedding","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/cloud-hosting\/550296\/5-fibre-trends-we-could-see-in-south-africa-in-2022-including-solutions-to-deal-with-load-shedding\/","title":{"rendered":"5 fibre trends we could see in South Africa in 2022 – including solutions to deal with load shedding"},"content":{"rendered":"

If there is anything that 2021 has taught us, it is that you cannot take anything for granted, says <\/span>Shane Chorley, head of sales and marketing at ISP, Frogfoot.<\/span><\/p>\n

\u00a0<\/span>The local fibre landscape is evolving rapidly: changes in-home and workplace behaviour, driven by the pandemic, means that demand for quality, reliable connectivity continues to surge, while recently seen consolidation among Fibre Network Operators (FNOs) and Internet Service Providers (ISPs) is bringing a new dynamic to the industry.<\/span><\/p>\n

For Frogfoot\u2019s part, we have been continually upgrading our network in order to keep up with the volume of capacity – we have seen close to a doubling of data usage across the network over the past two years – as there is a sustained shift online for work, education and entertainment purposes.<\/span><\/p>\n

Going forward, here are some developments that are likely to come to the fore in 2022:<\/span><\/p>\n

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1. <\/span><\/b>Continued fibre network rollout<\/span><\/b><\/p>\n

\u00a0<\/span><\/b>With demand for reliable and cost-effective internet connectivity continuing to grow, fibre network operators will continue to invest in expanding their networks. What is likely to change, however, is the reduction of overbuilding that we are witnessing in several areas around the country.<\/span><\/p>\n

\u00a0<\/span>The challenge here is not that there are one or two operators in a single area but rather up to five operators laying their network in the same area. In such instances, the latecomers are unlikely to achieve the uptake required to make their investments worthwhile.<\/span><\/p>\n

\u00a0<\/span>More competition is good for the customer: it gives them more choice and better pricing options, but the danger is that a race to the bottom will ultimately have a negative impact on both these businesses and their customers in the long run, with future investments in network expansion being reduced or deferred due to unsustainable pricing being maintained in a war of attrition.<\/span><\/p>\n

\u00a0<\/span>Lastly, the allocation of spectrum by Icasa could spur an expansion of fibre networks, as operators look to provide backhaul capacity for the 5G towers that will be built on the edge.<\/span><\/p>\n

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2. <\/span><\/b>Consolidation among FNOs<\/span><\/b><\/p>\n

\u00a0<\/span><\/b>Apart from going out and laying fibre themselves, South Africa\u2019s FNOs are now looking at growing their networks through mergers and acquisitions. Frogfoot itself grew its network with the acquisition of LinkAfrica\u2019s Western Cape fibre-to-the-home (FTTH) assets, helping solidify our presence in the Western Cape, and solidify the company\u2019s position as the third-largest fibre provider in South Africa.<\/span><\/p>\n

We have seen several other moves in the industry featuring other players, the most recent of which has seen the Vodacom Group acquiring a strategic stake in the owner of Vumatel and Dark Fibre Africa.<\/span><\/p>\n

Here again, those operators who are looking to expand their operations through acquisitions will have to tackle the issue of overbuild, as they look to find suitable partners with the least network duplication to their own.<\/span><\/p>\n

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3. <\/span><\/b>Consolidation among ISPs<\/span><\/b><\/p>\n

Similarly, we have seen a consolidation among ISPs – a recent example being that of Afrihost (which already has a majority stake in Axxess) buying a majority stake in Cool Ideas – and this trend is set to continue.<\/span><\/p>\n

Increasingly, what we are seeing is that the smaller ISPs lack the volume, scale and network capacity to effectively compete with the bigger players. Additionally, the bigger ISPs have the financial muscle to sustain the highly competitive pricing of their connectivity packages for a longer period of time, and this puts pressure on the ability of smaller ISPs to respond in a similar vein.<\/span><\/p>\n

This pricing pressure means that ISPs will need to reduce costs, automate more of their operations in order to make their business more efficient and look at what the next sales opportunity is. Going forward, ISPs will simply not be able to sell only fibre but will need to add value on top of the connectivity layer, be it becoming IT consultants, and offering more products and solutions.<\/span><\/p>\n

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4. <\/span><\/b>Innovative solutions to deal with load shedding<\/span><\/b><\/p>\n

\u00a0<\/span><\/b>South Africans need no explanation of the havoc that load shedding is causing to businesses (including fibre network operators), and home users. Conventional redundancy solutions are increasingly taking strain from the high stages of load shedding that has been implemented around the country recently.<\/span><\/p>\n

\u00a0<\/span>With more frequent power outages, batteries used in UPS systems do not have enough time to recharge before the next round of load shedding. This means that FNOs (and businesses and home users) need to turn to alternative solutions, such as renewable energy, which is abundantly available in South Africa.<\/span><\/p>\n

\u00a0<\/span>Despite this, Frogfoot is investing heavily in implementing power redundancy across the multiple layers of its fibre network, starting right at the top (the core) before working its way down closer to the end customer.<\/span><\/p>\n

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5. <\/span><\/b>New products to improve fibre uptake<\/span><\/b><\/p>\n

FNOs are also looking at additional ways of improving the uptake of fibre in areas that are already covered by their network, by providing connectivity solutions that are targeted at a more cost-conscious market, such as residents at smaller homes, renters and students.<\/span><\/p>\n

A pilot project, Frogfoot air, being carried out on select parts of the company\u2019s network sees the installation of a WiFi-enabled subscriber gateway, which means that users don\u2019t need to purchase and install any additional equipment in order to get started.<\/span><\/p>\n

Unlike options from some FNOs, Frogfoot is sticking to its existing model where it provides wholesale access without dictating the end-user pricing or terms – and leaving this up to the individual ISPs to decide. If successful, Frogfoot is looking to expand the concept across its entire network countrywide.<\/span><\/p>\n

Lastly, with efforts to tackle the pandemic showing some progress, and vaccination rates increasing, we are seeing more businesses reopen their offices and staff going back. However, with these organisations having invested considerably in ensuring that their employees can work remotely, it is highly unlikely that many will go back to working onsite full time, and rather adopt a hybrid approach.<\/span><\/p>\n

While employees might have to make a return to the office, the demand for high speed, high quality and stable connectivity at home is here to stay. Having experienced the benefits, it is unlikely that people will look to reduce their internet packages: they have now become accustomed to a certain level of experience, and will not want to have this reduced in any way.<\/span><\/p>\n