During the Budget Review in February this year, the National Treasury acknowledged that most companies that provide telecommunications infrastructure are moving from copper to fibre optic cables.
“To align the tax system with technological advances and international practice, the government proposes reducing the period over which electronic communication lines and fibre optic cables are written off.”
“Government will consider further alignment between taxpayers that own these assets and those with the right to use them,” it said.
Under section 11D of the Income Tax Act, companies that provide telecommunications infrastructure are currently allowed to write off lines or cables used for the transmission of electronic communications over a period of 15 years. A better tax allowance would boost international investment in fibre infrastructure in South Africa.
The more companies able to provide fibre infrastructure within the country would mean far larger coverage than we currently have. Larger coverage will not necessarily reduce the cost of using fibre in households or businesses.
Cost of fibre is still too high
Fibre is not new in South Africa, it has been around for almost a decade. According to a survey released by the SA Institute of Race Relations in 2015, the average cost of South Africa’s broadband connectivity (ADSL) per month was 10 times higher than that of the UK, even though the UK’s speed was five times faster than South Africa’s while reaching more people.
In 2016, only 10% of homes were using fibre optic technology. This number is low largely because of the cost of using fibre. If the government manages to achieve its goal of having fibre installed across the country by 2020, this might fast-track high-speed internet in SA.
The Department of Telecommunication and Postal Services has hosted a number of workshops for the preparation of the Electronic Communications Amendment Bill which aims to prepare the country for the digital industrial revolution and contribute to lowering the cost to communicate.
How much fibre coverage do we have across the country?
The map below, available at fibre2thehome.co.za, allows you to browse a map or search for your area to quickly find out whether your area has fibre coverage or not.
Top two cities with the most fibre coverage: