ISP demand surges as homes become offices
● In April, shortly after lockdown was imposed, Jacques du Toit, CEO of internet service provider Vox, faced two challenges.
The first was to facilitate remote working conditions for 300 of his staff within a week, which he calls a “lesson from hell”, and the second was to meet a 50% increase in customers signing up for Vox’s services.
In May and June demand increased a further 40% each month. Since March 26, Du Toit said, Vox has linked up 250-300 new users a day as people started working from home.
A Stats SA survey in May found that before the lockdown just 1.4% of people with jobs worked from home. During lockdown, 77.9% did so.
Vox’s new customers included staff from companies such as Absa, Liberty and RMB, which contributed 30,000 to 40,000 new customers on its network.
The spread of fibre beyond Durban, Johannesburg and Cape Town is also contributing to the spike in connectivity.
Dietlof Mare, CEO of fibre infrastructure company Vumatel, said that since 2014 it has connected almost 800,000 sites. In addition to the Western Cape and Gauteng, it recently extended its footprint to Polokwane in Limpopo.
Shane Chorley, head of sales at Frogfoot, a fibre infrastructure company, said users in towns are “data starved” and Frogfoot is expanding its network to Mbombela, Polokwane, Pretoria, Richards Bay, Bloemfontein and Pietermaritzburg.
He said Frogfoot is looking primarily at the consumer market, but there are opportunities to target smaller businesses that are based in and around residential areas, too.
For Vox to capitalise on demand it aims to buy small internet service providers in areas that will be connected to the expanding fibre infrastructure currently being laid by open access fibre network installers, said Du Toit.
The rise of fibre to the home blurs the line between consumer and business users, said Du Toit. Vox is now offering a home office package that includes voice services and uninterrupted power supply units for rental.
However, as home-based employees of big companies are getting connected, smaller businesses are battling to make ends meet. Steve Briggs, chief commercial officer of Wondernet, a subsidiary of wholesale fibre provider Seacom, said small businesses, especially in the hospitality, retail and education sectors, have been hard hit.
The company has offered downgrades and payment holidays to some clients, and contracts in the 150 office parks that are connected to its reticulation system can now be changed to month-to-month offerings.
Du Toit said that for businesses that are still able to trade in a lower level of lockdown “we assist with re-packaging our offering to them”. About 1% of its clients were “chancers” who tried to use lockdown as an excuse to cancel existing contracts. “We didn’t tolerate their nonsense,” he said.
Meanwhile, two new undersea cables are expected to cut data costs, starting in 2021.
Jan Hnizdo, CEO of Teraco, a data centre that hosts about 240 telecommunications businesses, said from as early as next year the Google Equiano cable along the west coast of Africa should be operating. It is part of the company’s plan to drive down data costs. A further cost reduction may be expected in 2024 when South Africans will be able to enjoy the benefits of Facebook’s 2Africa cable, said Hnizdo.