Fibre prices expected to surge forcing consumers to carry cost

One of the trends that could impact consumers in 2024 is fibre adoption.

Economic issues are affecting fibre service providers and this could lead to price hikes by February 2024, leaving the consumer in the search, to carry the cost.

Fibre connectivity remains a crucial priority for any country and while South Africa still finds its feet in terms of infrastructure to connect more households, it is a little impressive to know that there’s been a 2.400% increase in fibre connections over the past seven years.

This is a good thing according to David Colemon, Chief Product Officer at Frogfoot Networks, who pinpointed some incoming trends shaping the adoption of fibre and innovation in 2024.

So what does this upward fibre trend mean for the connectivity solution in 2024?

According to Coleman, first on the list is the shift towards more affordable solutions. More consumers are more likely to focus more on cost than speed.

“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,” he says.

There is a move towards necessary compared to faster speeds.

“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.”

There is opportunity here. Consumers stand to benefit from solutions aimed at the lower segment of the market, the solutions that will come as companies compete for market share.

Prepaid fibre solutions

He continues to note how speed and reliability are going to play a crucial role in the market this year, which will kick-start the 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.”

Prepaid options keep consumers connected within a cost bracket they can manage without the compromise on quality and speed.

Since prepaid can travel, Coleman notes that this could be 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 improve speeds and quality,” he maintains.

While there are a number of possibilities that could lead to heftier price ranges, the growing adoption of fibre will likely lead to shifting costs, while global shortages of materials, manufacturing components or even trade wars will likely impact overall fibre installation prices. Overall it should be an interesting year for the fibre industry.

Labour costs, regulatory hurdles and new technologies will also play a part in the price to access fibre, which could place consumers in a very precarious position while leaving Colemans’ possible prepaid solution as the preferred consumer bull-eye.

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