The connectivity and ubiquity of fibre remains a priority, globally. In the UK, Ofcom is predicting that the country will achieve more than 80% of full fibre coverage over the next two years. Already in Japan, Iceland, Korea, Spain and Sweden it is more than 80% while South Africa is clambering forwards to connect as many households as possible with an impressive 2,400% increase in fibre connections over the past seven years. But what does this upward fibre trend mean for the connectivity solution in 2024?
First is the anticipated shift towards more affordable solutions for cash-strapped consumers. The pressure placed on people from an economic standpoint is trickling down into all aspects of daily life with most consumers focusing more on cost than on speed. This is likely going to trigger a flurry of price announcements that will balance changing speeds within different packages more aligned with customer needs.
That said, economic pressures are affecting the ISPs as much as consumers – dollar pressure and inflationary costs are being felt by service providers so most will increase their prices across the board as of February 2024. A deft balance between price and performance will soften the price blow, but many companies are unable to continue absorbing the impact of the current climate and have to pass some of the costs on to the consumer.
The move to faster service is in line with a global trend. Internationally, consumers are gaining access to speeds beyond a gig. There has been this ceiling on fibre to the home (FTTH) of a gig both upload and download, but nobody has actively ventured beyond this for a home offering in the past, although it has been standard practice for fibre to the business (FTTB). Now, companies are breaking the ceiling and introducing higher speeds to remain competitive and there’s a collapse happening in the middle and higher segments.
This is an opportunity for customers to benefit from solutions that are aimed at the lower segment of the market. Solutions that will potentially come in at low price points as companies compete for attention and market share. The services are limited with reduced Wi-Fi range, but they do provide rapid connectivity and radically improved experiences on mobile devices alongside improved reliability. Customers don’t lose connectivity when there’s a power failure as they can keep their routers connected, unlike mobile solutions that last as long as the available cell tower battery.
The speed and reliability factors are going to play a significant role in the market in 2024, igniting increased adoption of FTTH solutions across new areas of the South African market. The available speeds will likely sit at around 50Mb per second and the cost of connectivity will easily be covered by cash. This is transformative accessibility that will have a lasting social impact and will be further bolstered by the move towards prepaid fibre solutions.
These prepaid packages are affordable and accessible. People are at a point where they have to make tough choices about purchases, so prepaid options keep them connected within a cost bracket they can manage but without a significant compromise on quality and speed. It is very likely that this will remain as solid growth in 2024 for all these reasons plus the added benefits of connectivity while on holiday – prepaid can travel. This is the ideal investment for students, retirement villages and holidaymakers.
The smooth transition from limited connectivity options to a variety of options to suit different customers and budgets is opening doors for South Africa. On the social front, it allows for improved business opportunities, education, networking and collaboration, providing people with the connectivity they need to enrich their lives. On the business front, it puts service providers on a new frontier where competition may yet bring the prices down even further, but will definitely improve speeds and quality.
The shape of connectivity in 2024 will be defined by accessibility, affordability and ingenuity. Customers will want fibre but they also want more options at better costs while companies will continue to fight for growth within shrinking margins and tightening belts.