cost-effectiveness of fibre optic technology deployment in rural area

Abstract

Studies have shown that the majority of the global population are migrating from rural to urban areas. People are leaving rural areas due to poor services such as poor broadband service. Fibre optic technology has been introduced as a solution to poor broadband quality. However, as a result of the peculiar characteristics of South Africa's rural areas, the majority of the telecommunication operators are hesitant to invest in ICT in rural areas because it tends to be much less profitable. Hence, the study of how cost-effective it would be to deploy a fibre optic network in rural areas as compared to the current wireless (LTE) network remains an open issue. This study investigates the cost-effectiveness of deploying a fibre optic network in the rural area of Mdantsane township, by analysing the installation and operation costs of fibre optic networks in comparison to the cost of wireless (LTE) networks. The finding of the study amongst others showed that while fibre optic networks seem to be great, however, they come at a cost. The cost of drilling and trenching associated with the deployment of fibre optic networks was reported as the key reason why the network deployment is costly. Hence, reducing the cost of drilling and trenching would reduce the cost significantly. The study suggests that, to lower fibre optic deployment costs, network operators should collaborate and share costs through a customised pricing model that benefits both the operators and rural internet users.