Case: Bridging the digital divide in South Africa

Nokia Director Toni Pellegrino, South Africa: “Finnish technology and knowledge will make a big difference in the connectivity in Africa”

Finnfund has invested 2 million euros in the Fibertime Group, a company offering a world class internet and connectivity to people in poor communities in South Africa. At the heart of the innovation is both the affordable pricing model, pay-as-you-go, and the technology used.

The Finnish company Nokia is providing both fiber access nodes for the fiber exchange and fiber modems to create a WiFi network across the entire townships. Digital inclusion is a shared value for both Nokia, Finnfund and Fibertime. The journey has been a valuable learning process for all partners.

“It is crucial to learn how people act and spend money to make sure that our product would adapt to local environment”, says Toni Pellegrino, Managing Director Nokia South Africa.

“When mobile network came, we first thought it was the way to connect everybody wirelessly also on the African continent. But what we realize today, in order to connect and not to leave anybody behind in the digital revolution, you need to use different kind of technologies. Fiber, such as Fibertime in townships or non-terrestial solutions such as satellites in deep rural villages in Africa serve different needs. It is the multitude of technologies that will provide coverage we need on the continent.”

Finnfund joined the journey already at early stage.

“For many European investors, there is a lot of scepticism around investing in Africa. But already from the outset, Finnfund saw that this project would have great impact and that it fulfills their requirements for a sustainable and profitable investment. I hope it will show how Finland and Finnish technology will make a difference in connectivity in Africa, and the model can be scaled to many African countries.”

The strong development impact of tackling the usage gap is clear: Increasing internet access helps create jobs and is crucial to all personal human development including education, communication, access to information and financial inclusion.

For Nokia, community engagement and local know-how are important factors in success.

“In emerging markets, we always have the commitment to act locally and having local people working for our projects, For example in South Africa, 90% of our people are local South Africans. In order to succeed, it is important to have talented people who understand the local market, have same values and language.”

The next billion

“Our vision at Fibertime is to connect the next billion Africans to the internet . We pioneer new pay-as-you-go models for fiber internet to low to middle-income communities. Every single home gets a free Wi-Fi router installed, and then we sell time-based, world class internet for affordable price” says Rich Henn, CEO and co-founder of Fibertime.

This brings new market to people, access to internet, information and financial inclusion for affordable price in low to middle-income communities.

“We have had an excellent collaboration with Finnfund. Right from the outset, we have been aligned that this business needs to be profitable in order to be sustainable. And while making profit, we act in an ethical and responsible way. We are super passionate to deliver the impact that Finnfund´s investment has made in the Kayamandi community. “

Read more about Finnfund’s investments in digital infrastructure and solutions