SA Connect is the South African government’s national broadband policy and strategy. This framework aims to deliver universal, affordable internet access to all citizens.
Launched in 2013, the initiative seeks to connect government institutions, schools, healthcare facilities, and underserved communities to fast and reliable internet.
As part of the programme, the government aims to deliver full broadband coverage by 2030, ensuring that every South African, regardless of location, can participate in the digital economy.
But as the government works on longer-term broadband infrastructure projects, like SA Connect, there is a significant opportunity for ISPs to fill these connectivity gaps.
Introducing the hybrid carriers
In the past, a company might specialise in offering fibre networks, and that’s the only field they played in. But this has changed.
To compete, you need to expand your offerings. This trend is driving the rise of hybrid carriers; service providers that find other ways to connect communities.
Hybrid carriers and ISPs are companies that combine multiple connectivity technologies or service models to deliver internet access more efficiently and affordably, especially in areas where a single approach falls short.
These hybrid players are usually smaller than the more traditional telcos, and they’re able to succeed by servicing the more isolated and underserved communities.
They’re typically more agile and can deploy modern connectivity solutions at pace. This agility also allows them to experiment with innovative service models that might be unfavourable to larger, more traditional providers.
Fibre companies like those mentioned above face multiple obstacles in deploying new infrastructure to remote township communities, such as obtaining demand and intent confirmation and securing municipal approval. The time and cost associated with digging or erecting fibre lines is another barrier.
Couple this with the reality that many of these communities are unbanked and have constrained disposable income, which limits their ability to sign on for debit payments and what they can afford to spend on data or subscriptions.
Additionally, smaller user bases and lower ARPU (average revenue per user) mean that the financial return on these infrastructure investments is typically far lower.
The business case for Community Wifi
Underserved South African communities alone represent R26 billion in annual spending power, much of which remains disconnected from digital commerce and services.
Across these underserved areas, community Wifi has the potential to empower people by allowing them to connect to the Internet.
In action, a Community Wifi model will see subscribers buying prepaid vouchers that they can use to get online at different Wifi hotspots across their community, be it their local supermarket or the cafè down the road.
For a small fee of around R5 or R10, community members can access the Internet for a day as they move about connecting to different hotspots across their community.
For a fibre operator, offering this additional service makes good business sense because the average person might not be able to afford their fibre services, but can afford to connect for a small daily fee.
Now, this single fibre point might be servicing a few hundred people, and that small daily fee equates to a positive return on investment. In this way, they’re able to make money where fibre isn’t a good fit, while also driving digital inclusion because the solution is more affordable.
In addition to fixed and hotspot coverage, hybrid carriers also represent the next frontier in MVNO growth, with many ISPs leveraging their existing presence in underserved communities to roll out mobile services.
This omni-service approach ensures that providers are able to service their customers at home, at their destination and anywhere in between.
While expanding your service offerings opens up new business opportunities, it can also increase billing complexity. Many OSS (Operational Support System) / BSS (Business Support System) vendors offer billing software that caters to a specific type of billing, but few are equipped to meet the complex and evolving needs of hybrid carriers.
To scale effectively, hybrid telcos need flexible, integrated billing systems that can support their growing needs and cater to multiple disparate services, like mobile (MVNO), fixed line, fixed wireless and fibre, as well as the voucher inventory, distribution and redemption requirements associated with community WiFi or prepaid mobile.
Across our portfolio of products and services, VAS-X remains committed to supporting providers looking to bridge the digital divide with capable and cost effective solutions.
