The South African fibre-to-the-home market saw significant shifts in 2022 across network operators, market growth and connectivity
As of March 2023, the fibre-to-the-home (FTTH) market extended into 5.24 million reported homes with the various fibre network operators (FNOs) adopting different marketing strategies for their FTTH offerings. According to research undertaken by Africa Analysis, FNOs have only passed 3.72 million unique homes of which 2.11 million have access to prepaid FTTH. The report also found that fixed broadband household penetration has risen to 20% as of March 2023 and grew at a 4-year CAGR of 22.2% across DSL, fixed wireless, FTTH and fixed 4G and 5G and this growth is due to a number of factors. Work from home and hybrid working have driven the adoption of FTTH across fixed broadband services, alongside changing customer expectations when it comes to service, delivery and support.
“The FTTH market has seen solid growth because FNOs are building in areas that previously didn’t have access and opening up new markets, and because old copper technologies, such as DSL, are being replaced by fibre,” says Mary Ogilvy, Head of Division: Fibre & ISP at Vox. “Added to this is the growing reliance on connectivity across the consumer base – people can’t rely on mobile data, it’s too expensive, and they need to be connected at home for work, children’s homework, entertainment and more. In this globally connected society, you can’t live without the internet.”
This is reflected in the number of connected homes in South Africa. While the core market of the upper LSM market is not moving as rapidly as in the initial phases, there have been solid strides towards providing previously underserviced areas with cost-effective and accessible connectivity solutions.
As Ogilvy, explains, people are struggling economically and they want affordable solutions that come with proven service and support so they can stay connected.
“The industry has changed, people are choosing based on reliability and trust and price,” says Ogilvy. “This is an important differentiation – your service may be the cheapest, but if you don’t provide reliable aftercare, people are going to leave. Not many of the ISPs offer 24/7/365 support and many companies only provide support over WhatsApp. This is pushing people towards ISPs that make it easy to resolve problems and manage their FTTH accounts.”
Consumers want FTTH that connects with them as customers and companies paying attention to this need are seeing solid growth within the local market. This is reflected by the changing shape of market share across the top five ISPs – there is now only a small market share difference of 2.7% between them.
“It doesn’t matter if your business has been a stronghold in the market for the past however many years – if your product isn’t delivering, if you’re not adding customers, and if you can’t change with the times, then you’re going to lose market share,” says Ogilvy.
Amidst this flurry of growth and expansion, a few companies have stood out in terms of their growth trajectory and performance, primarily due to their focus on customer service and service delivery. Vox has seen impressive traction, moving to sit comfortably in the top five ISPs across total FTTH homes connected. Vox believes that the reason why the company has gained this traction is because of its commitment to providing FTTH customers with the same levels of support and network grade quality as their business services.
“The goal is to ensure that customers get what they need with minimal stress,” concludes Ogilvy. “We believe that quality is the key differentiating factor – high-quality service, functionality, support and service.”