10 year Exclusivity Contracts for Residential Complexes

[pedruid]

I wonder if anyone can shed light on this practice. I live in an ECHO Foundation Retirement Village and Frogfoot has laid fibre as far as our main entrance gate. I have been promoting it being allowed into our village and have put Frogfoot in touch with ECHO HO. The sticking point is that Frogfoot are requesting that ECHO sign an undertaking not to allow another Fibre Company to enter for a minimum f 10 years.
Anybody on the Forum had any experience of this?

 

[krycor]

10 years.. WOW!

 

[cavedog]

Well if you want an operator to sign an exclusivity agreement then Frogfoot is probably the one you want if they allow open access ISP wise and not force everyone to use Vox then it's not half bad. 1Gbps symmetrical for ~R1800 you can't complain about that

 

[pinball wizard]

I wonder if anyone can shed light on this practice. I live in an ECHO Foundation Retirement Village and Frogfoot has laid fibre as far as our main entrance gate. I have been promoting it being allowed into our village and have put Frogfoot in touch with ECHO HO. The sticking point is that Frogfoot are requesting that ECHO sign an undertaking not to allow another Fibre Company to enter for a minimum f 10 years.
Anybody on the Forum had any experience of this?

It's probably illegal for them to propose that and for you to sign it. Check the definitions in the act.

Also, why would anyone in their right mind sign any exclusivity with any infrastructure provider? You would only be screwing yourselves now and in the future.

I have a complex right now trying to shed themselves of a 5 year exclusivity deal that the developer signed with some mickey mouse provider before the body corporate was formed.

 

[calypso]

Frogfoot does try these tricks. Annoying because it seems that it's not the norm.
For me I negotiated down to 5 years, as I do want them to get going on the fibre. Even so 5 years is a long time.

 

[supersunbird]

I wonder if anyone can shed light on this practice. I live in an ECHO Foundation Retirement Village and Frogfoot has laid fibre as far as our main entrance gate. I have been promoting it being allowed into our village and have put Frogfoot in touch with ECHO HO. The sticking point is that Frogfoot are requesting that ECHO sign an undertaking not to allow another Fibre Company to enter for a minimum f 10 years.
Anybody on the Forum had any experience of this?

Well, ask them what the benefits are. For such a long exclusivity period it has to be darn good.

 

[D tj]

Tell them Ok, but match other ISP offerings and be 20% cheaper on each offer!
See how fast they sign.
Suspect the'll hop over backwards.

 

[Polymathic]

For a retirement village this is basically means being stuck with Frogfoot for the rest of their lives

 

[Wasabee!]

It's probably illegal for them to propose that and for you to sign it. Check the definitions in the act.

It's not illegal, although there is the case of Vodacom (the hipocrits who claim to be open access sometimes and price gouge the customers ) vs Openserve recently which might've set some precendent.

One needs to be aware that if you want to have a company spend sometime hundreds of thousands of rands (in large complexes) to invest in infrastructure which takes quite a few years to break even, it makes sense to want some guarantee that they can make that return back. It's just a matter of what side of the fence you sit.

I'd rather have Frogfoot than Vodacom, Openserve or Vuma as their prices and support are better. The only thing I'd suggest is to ask them for their annual escalation. Currently Frogfoot are fairly cheap, though they might increase over time - although it's sometimes understandable seeing the input costs they have to deal with eg. Labour, fuel, importing material etc. and inflation.

 

[supersunbird]

Tell them Ok, but match other ISP offerings and be 20% cheaper on each offer!
See how fast they sign.
Suspect the'll hop over backwards.

For 10 years there must be at least a 50% discount, if not more.

 

[ThatGuy_ZA]

Eish, that's a tricky one.

We've got Octotel in out block of flats and they didn't say anything about exclusivity.

 

[calypso]

Well, ask them what the benefits are. For such a long exclusivity period it has to be darn good.

There are no extra benefits they just install and no one else can install for that period. Its got nothing to do with the ISP pricing. It just means that the only people who can put fibre in your grounds.

 

[supersunbird]

There are no extra benefits they just install and no one else can install for that period. Its got nothing to do with the ISP pricing. It just means that the only people who can put fibre in your grounds.

Then I'd say "Tsek" for that kind of long exclusivity if I was them.

EDIT: And there should be exit clauses with deadlines if one takes a 5 or 3 years deal, and they do not meet the deadlines, contract is void. to avoid what is said below.

 

[Leno]

I would avoid signing exclusivity

We signed 3 year last november with a provider, they promised 6 weeks install and we are still waiting

Now we have 3-4 different providers going right past the building that we cannot use and we twiddle our thumbs

 

[Leno]

One needs to be aware that if you want to have a company spend sometime hundreds of thousands of rands (in large complexes) to invest in infrastructure which takes quite a few years to break even, it makes sense to want some guarantee that they can make that return back. It's just a matter of what side of the fence you sit.

The unit density in complexes and flats are far higher than in normal residential areas (more customers for less trenching etc)

Yet they seem to be able to make business sense without exclusivity contracts in normal residential areas?

They are just trying to exploit the situation which i suppose any business will try

 

[calypso]

Then I'd say "Tsek" for that kind of long exclusivity if I was them.

Well who else do you have that wants to install?

 

[Cius]

I find that once a complex has fibre another provider generally is slow to come in anyways as there are plenty of complexes with zero providers to install in, why compete if you don't have to. Vuma did our complex and while it was a mess during them laying it out we have had zero interest from any other provider since. Hence functionally the exclusivity contract does not seem to make that big a difference. That being said its a bad idea and I would force negotiate a clause that says if they cannot deliver by a certain date the exclusivity clause falls away obviously otherwise they will delay the installation months as they know they have you locked down.

 

[pedruid]

Well who else do you have that wants to install?

That’s exactly my point. No one.