The Fibertime Team. Image Credits: Fibertime
Finnish development financier, Finnfund, has doubled down on its backing for SA-based telecoms firm, Fibertime Group. It has invested an additional €2 million into the company to bolster its internet access to the country’s underserved communities. The further funding signals an increasing focus on bridging the digital divide in South Africa, with an estimated 80% of households unconnected to fast and affordable broadband.
While fibre internet access is easily available in wealthier urban areas, it remains expensive and geographically out of reach for the majority of the population, especially residents in urban areas. The high cost of micropayments constitute another problem, due to increased bank transaction fees. This leads to a reliance on cash, which obstructs digital adoption.
As it comes off the heels of an initial €2 million investment in 2023, this second tranche of funding will enable Fibertime to spread its tentacles beyond the wealthy suburbs normally served by fibre providers. The company employs the pay-as-you-go model, aiming to leap past the affordability barriers that exclude majority of the population in lower income communities. The model is supported by technology from Finnish telecoms giant Nokia, which provides both the fibre network infrastructure and customer modems.
Fibertime leverages its subsidiaries fibertime™ and VulaCoin, to offer a solution that tackles both affordability and accessibility. Its time-based pay-as-you-go pricing model allows users to purchase internet access in small increments, while its digital wallets facilitate micropayments, potentially circumventing expensive bank charges.
Tuomas Vaulanen, Investment Associate at Finnfund, said “Finnfund is very pleased with Fibertime’s rapid growth and expansion enabling more townships in South Africa to get access to the internet. As a Finnish development financier and technology-driven impact investor, we are of course proud that Nokia’s technology plays such a vital role in making this happen.” he said.
Alan Knott-Craig, Founder of fibertime™️, explained the investment as a vote of confidence in South Africa. “Finnfund doubling down is a vote of confidence in Fibertime and South Africa. Our country is attracting foreign direct investment, and those funds are going towards building physical infrastructure in townships so that all South Africans can have access to affordable uncapped fiber internet.” he said.
Toni Pellegrino, South Africa Managing Director and Head of Network Infrastructure for Southern and Eastern Africa at Nokia, said “Our collaboration with Fibertime underlines our common vision to digitally enable people in highly-dense populated areas in South Africa with secure, affordable, and abundant data while delivering a long term sustainable business. Nokia is committed to driving the country’s digital goals by bridging the connectivity gap in numerous underserved regions throughout South Africa and is looking forward to supporting this disruptive model beyond South Africa.”
Finnfund, which invests €200-€250 million annually in developing countries, focuses on sectors including renewable energy, sustainable agriculture, and digital infrastructure. Its current portfolio totals €1.22 billion, with half of its investments directed towards Africa. This latest investment in Fibertime leverages a guarantee from the European Fund for Sustainable Development Plus (EFSD+), a financing instrument of the EU’s Global Gateway strategy, which promotes sustainable investments in partner countries. The EFSD+ guarantee falls under the Africa Connected program, specifically designed to support rural connectivity and digital solutions in sub-Saharan Africa.
