Co-build agreements
Working together
Co-build agreements
Vodacom is playing an active role in the provisioning of fibre . We have been able to provide more than 31,000 homes and businesses with fibre infrastructure to date . In 2016 , we made significant inroads – signing wholesale agreements with two third-party network infrastructure providers – SADV and MetroFibre Networx .
We also signed lease agreements with Fibrehoods , Openserve , Century City Connect , Vumatel , and Dark Fibre Africa to deliver Vodacom Fibre products . Through these providers , Vodacom customers will have access to Vodacom Fibre Broadband , Vodacom Fibre Fixed Voice , and value added services .
Vodacom and other parties are facing challenges today when it comes to rolling out fibre infrastructure , including :
For FTTH to reach as many consumers as possible , many service providers must come together and collaborate in meaningful and practical ways . All great projects require multiple players – and this is no small project .
There are several examples worldwide where competitors have joined forces to roll out infrastructure together , resulting in increased competition and better service quality . While these projects have not been very successful for mobile network sharing arrangements , being reduced in scale and scope due to cost overruns and delays , there are functional examples in the fixed-line and submarine cable space .
For example , in Spain , Vodafone has co-built infrastructure with a competitor – offering a second choice over the incumbent ’ s DSL / fibre network to 3 million households .
1 . Large investments required 2 . Difficulty to create and maintain focus 3 . Issues to achieve economies of scale
4 . Target areas chosen are only very-highincome and easy-to-deploy
A co-build structure can provide adequate funding , establish focus in a single-purpose entity , and achieve higher volumes that result in efficiencies . The increased deployment scale will create local employment in the construction industry and reduce the cost of imported materials that cannot be sourced in South Africa due to the larger purchase volume .
The risk sharing makes it more attractive to venture into greenfield areas that are currently underserved . This requires good governance structures that anticipate and cater for conflicts of interest . An additional benefit of co-build is it also avoids duplication of infrastructure .
Working together
While Vodacom recognises that working with different providers to build infrastructure can be challenging ( especially given South Africa ’ s advanced competition laws ), we have worked with partners and shared infrastructure providers before to achieve technological and pro-competitive gains – such as in tower sharing .
Vodacom has observed that third-party network infrastructure partnerships will assist in giving access to pre-deployed FTTH networks , inclusive of access build and active equipment . This rapidly increases time to market and allows customers to enjoy fibre offerings across a wider geographical area .
In addition to ambitious co-build plans , Vodacom will continue to use third-party networks to deliver fibre to as many South Africans as possible – rather than compete for high-value areas .
South Africa has ambitious 2030 connect targets set by the government to deliver better access to Internet services to all citizens . This will be one building block that Vodacom is able to provide , in order to achieve these targets . ■
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