Affordable Fibre Is Becoming More Competitive. But Affordability Alone Isn’t Enough

Affordable fibre is becoming an increasingly competitive segment of South Africa’s broadband market, with both new entrants and established players developing different models to reach lower-income and historically underserved communities.  

Industry veteran and Ilitha Telecommunications CEO Vuyani Jarana says providers need to understand how people actually live and use connectivity. As competition grows in this market, that understanding is critical to designing services that deliver meaningful value to the communities they serve. 

As more providers enter the market, the challenge is moving beyond simply making fibre cheaper. Ilitha’s experience rolling out its services to township and rural communities over the past 18 months shows that affordability is only one part of the equation. Adoption also depends on what people need connectivity to do, network quality, network economics and how closely the service reflects the way communities actually live and use the internet. 

The company marked the latest stage of that expansion in Mthatha this week, formally launching its network in the O.R. Tambo District of the Eastern Cape. Ilitha has now connected homes across 27 communities in the Eastern Cape and KwaZulu-Natal. 

The value of connectivity goes beyond access 

For CEO Vuyani Jarana, the experience has challenged a straightforward assumption that lower household incomes are the primary barrier to broadband adoption.  

“While affordability is key, the internet use case has a big effect on adoption and usage,” Jarana said. “What drives usage and adoption is the sense of value.”  

That has influenced how Ilitha approaches the market. Rather than simply reducing the price of a conventional fibre proposition, the company has focused on what connectivity enables once it reaches a household or community.  

Making connectivity useful in everyday life 

“We are moving from asking how we connect a community to asking what we can enable once that community is connected. That is where we see the next opportunity,” says Jarana.  

For Ilitha, broadband creates access to things that can have a practical impact on people’s lives, from education and employment to healthcare, entertainment and essential services.  

Jarana argues that internet use is already embedded in daily life in many urban households. In some township households, the immediate value can be less obvious beyond messaging platforms and social media. This has led Ilitha to look at services and partnerships that can make the value of broadband access more tangible. 

For example, the company’s Mthatha launch demonstrated that approach, including the introduction of TruMD, a digital healthcare service providing access to HPCSA-registered doctors through secure online consultations. The service can provide medical advice and, where appropriate, prescriptions and referrals remotely. They also showcased their partnership with SpecCon, an innovative learning platform that delivers accredited learnerships, short courses, and nationally recognised qualifications designed to equip learners with workplace-ready skills. 

Building networks around local realities 

Network quality is an imperative for Ilitha during their rollout.  

Ilitha takes a different approach to the capacity available within the home. Depending on the package, the network can support between 200 Mbps and 300 Mbps of capacity across up to 15 devices, with up to 20 Mbps allocated per device. Jarana argues that this gives households considerably more usable capacity than a conventional shared connection, where multiple devices may compete for the same bandwidth. 

“When you drop in this capacity, each device runs its own highway,” explains Jarana. 

Ilitha takes the idea of connectivity further by connecting entire communities. When a user is in a connected community they remain connected, even outside the home. This nomadic connectivity further responds to the unique context of how people consume and need internet. 

The company’s prepaid, uncapped model means broadband connectivity can become the primary service for a household, rather than one of several data options. Jarana says this changes the expectations placed on the network. When customers have committed their available data spend to a fixed connection, downtime has a more immediate impact.  

The economics of network deployment also cannot be separated from the characteristics of individual communities. 

Ilitha has found significant differences between established townships, where housing density can be high, and more self-built areas where larger yards and different settlement patterns can change the economics of reaching each home.  

This is an area where Ilitha believes its experience of operating in township and peri-urban markets gives it a different perspective from providers approaching the market as a new frontier. 

“We didn’t start by building a conventional network in an established urban neighbourhood and then ask how to make it work in townships. We started in these communities, and our model has been shaped by what we have learnt on the ground about how people live and use connectivity,” says Jarana. 

Scaling what Ilitha has learnt 

That experience is now being backed by further investment. Absa Corporate and Investment Banking has supported Ilitha with R500 million in funding to accelerate the expansion of affordable fibre connectivity across South Africa’s township economies. 

“We have spent the past 18 months proving that this model works. The next phase is about taking what we have learnt and scaling it responsibly,” concludes Jarana.