How ISPs will buy DSL and fibre data from Openserve

[Hanno Labuschagne]

How ISPs will buy DSL and fibre data from Openserve

Telkom's wholesale and networks division, Openserve, has replaced its widely vilified IP Connect wholesale product with a much cheaper service that it has dubbed Openserve Broad Connect.

Openserve Broad Connect, and previously IP Connect, is how Internet service providers (ISPs) buy capacity on Telkom's copper and fibre networks.

The launch of Broad Connect came after a Competition Commission inquiry into the South African data services market, which resulted in the Competition Commission instructing Openserve to substantially reduce the price of IP Connect.

 

[Vorastra]

Why is it that richer countries around the world, with more disposable income than us, can somehow offer cheaper and significantly faster broadband services than local companies can?

 

[warwickw]

Why is it that richer countries around the world, with more disposable income than us, can somehow offer cheaper and significantly faster broadband services than local companies can?

Rhetorical question.

 

[Totempole]

Why is it that richer countries around the world, with more disposable income than us, can somehow offer cheaper and significantly faster broadband services than local companies can?

The answer is simple. Because we pay the price they're asking.

 

[charlieharper]

Why is it that richer countries around the world, with more disposable income than us, can somehow offer cheaper and significantly faster broadband services than local companies can?

I've been asking that question for ages... I'm thinking it still might be the international traffic that's costly. Remember about 10-15 years ago when we had 2gb international data and 20gb local data every month on ADSL.

But yeah, it's equally strange that places like Thailand (which is equally as poor as SA) have about 80% FTTH coverage and you can get a 1000mbps line for like R500 (1000 baht) per month.

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Anyhow, I'm (finally) getting my Openserve line installed on Monday. Exciting times.

 

[wingnut771]

I've been asking that question for ages... I'm thinking it still might be the international traffic that's costly. Remember about 10-15 years ago when we had 2gb international data and 20gb local data every month on ADSL.

But yeah, it's equally strange that places like Thailand (which is equally as poor as SA) have about 80% FTTH coverage and you can get a 1000mbps line for like R500 (1000 baht) per month.

AIS Fibre | Home Broadband Internet with Fibre Optic 100%

AIS Fibre Home Broadband Internet with Pure Fibre optic 100% Unlimited Hi-Speed Home Broadband Internet and Mobile Internet with Premium Entertainment Max speed internet 30/10 Mbps 50/20 Mbps 100/30 Mbps 200/50 Mbps Unlimited Mobile Data and Unlimited AIS Super Wi-Fi Watch live TV, News and...

www.ais.co.th

Anyhow, I'm (finally) getting my Openserve line installed on Monday. Exciting times.

This is why it's cheaper imho. When our coverage gets saturated and different companies start competing for the same pie (competition), we should see prices dropping. Right now we don't have a choice, kak 'n betaal, and be grateful to have fiber in the first place.

 

[charlieharper]

This is why it's cheaper imho. When our coverage gets saturated and different companies start competing for the same pie (competition), we should see prices dropping. Right now we don't have a choice, kak 'n betaal, and be grateful to have fiber in the first place.

Yes, that's what I'm thinking too and should happen, at least in theory... but then, FNO's 'claim' it's not feasible to have multiple FNO's installed in a single suburb. Afaik, Openserve and Vumatel even have an agreement not to overlap.

I do however think it's stupid, cause that's like saying it's not feasible to open a Pick n Pay in town because there's already a Spar.

 

[wingnut771]

Yes, that's what I'm thinking too and should happen, at least in theory... but then, FNO's 'claim' it's not feasible to have multiple FNO's installed in a single suburb. Afaik, Openserve and Vumatel even have an agreement not to overlap.

I do however think it's stupid, cause that's like saying it's not feasible to open a Pick n Pay in town because there's already a Spar.

Right now I think it's a race to get there first. When everywhere is settled, then they will start infiltrating the competition. We also got to think of competition from 5G and Starlink in future aswell, so fiber providers have to be careful not to get too greedy.

 

[Swa]

I've been asking that question for ages... I'm thinking it still might be the international traffic that's costly. Remember about 10-15 years ago when we had 2gb international data and 20gb local data every month on ADSL.

But yeah, it's equally strange that places like Thailand (which is equally as poor as SA) have about 80% FTTH coverage and you can get a 1000mbps line for like R500 (1000 baht) per month.

AIS Fibre | Home Broadband Internet with Fibre Optic 100%

AIS Fibre Home Broadband Internet with Pure Fibre optic 100% Unlimited Hi-Speed Home Broadband Internet and Mobile Internet with Premium Entertainment Max speed internet 30/10 Mbps 50/20 Mbps 100/30 Mbps 200/50 Mbps Unlimited Mobile Data and Unlimited AIS Super Wi-Fi Watch live TV, News and...

www.ais.co.th

Anyhow, I'm (finally) getting my Openserve line installed on Monday. Exciting times.

It's not international. Bandwidth only makes up a small fraction of the cost of an entry line. Networks also don't deal with bandwidth except on their own lines.

Right now I think it's a race to get there first. When everywhere is settled, then they will start infiltrating the competition. We also got to think of competition from 5G and Starlink in future aswell, so fiber providers have to be careful not to get too greedy.

Imho they've already been too greedy and have created a lot of bad sentiment. If I have the choice I'd rather pay for wireless than fibre simply because of the treatment from fibre providers. It's also less hassle overall where with fibre your line is entirely dependent on the network provider.

 

[supersunbird]

Yes, that's what I'm thinking too and should happen, at least in theory... but then, FNO's 'claim' it's not feasible to have multiple FNO's installed in a single suburb. Afaik, Openserve and Vumatel even have an agreement not to overlap.

I do however think it's stupid, cause that's like saying it's not feasible to open a Pick n Pay in town because there's already a Spar.

Have 2 fibre networks in my neighborhood (OpenServe and Frogfoot) and I hear Metrofibre wants to install in at least one part as well.

 

[wingnut771]

Have 2 fibre networks in my neighborhood (OpenServe and Frogfoot) and I hear Metrofibre wants to install in at least one part as well.

When it becomes the norm instead of the exception, then pricing will come down imho. I'm stuck with vuma only.

 

[Swa]

When it becomes the norm instead of the exception, then pricing will come down imho. I'm stuck with vuma only.

Same here. Would have preferred Openserve but their planned fibre completely disappeared as soon as Vumatel laid theirs.

 

[ReggaeBoyz]

Yes, that's what I'm thinking too and should happen, at least in theory... but then, FNO's 'claim' it's not feasible to have multiple FNO's installed in a single suburb. Afaik, Openserve and Vumatel even have an agreement not to overlap.

I do however think it's stupid, cause that's like saying it's not feasible to open a Pick n Pay in town because there's already a Spar.

As far as I understand, it is a simple case of mathematics. It costs about R8,000 to R10,000 to pass one house in a suburb. To break even you need at least 20% signup and at 30% you start making a profit. In Benoni there are a number of suburbs with three FNO's and therefore all three cannot make a profit as not everyone will sign up for fibre and those that do, normally sign up to the first provider that becomes available. I think that Vumatel introduced their no overbuild policy due to the fact that they were just not making money when overbuilding. I am of the opinion that the reason that there is no overbuilding is due to economics and not any agreement as I do not believe there is any love lost between Openserve and the other FNO's, besides the fact that it would probably also be illegal.

 

[wingnut771]

As far as I understand, it is a simple case of mathematics. It costs about R8,000 to R10,000 to pass one house in a suburb. To break even you need at least 20% signup and at 30% you start making a profit. In Benoni there are a number of suburbs with three FNO's and therefore all three cannot make a profit as not everyone will sign up for fibre and those that do, normally sign up to the first provider that becomes available. I think that Vumatel introduced their no overbuild policy due to the fact that they were just not making money when overbuilding. I am of the opinion that the reason that there is no overbuilding is due to economics and not any agreement as I do not believe there is any love lost between Openserve and the other FNO's, besides the fact that it would probably also be illegal.

What's illegal? I'm sure all the folks on frogfoot/octotel/metrofibre who have packetloss would jump at the opportunity to switch to openserve or vumatel, or at least by having another network in those areas would have lit a fire under their ass to fix it.

 

[supersunbird]

What's illegal? I'm sure all the folks on frogfoot/octotel/metrofibre who have packetloss would jump at the opportunity to switch to openserve or vumatel, or at least by having another network in those areas would have lit a fire under their ass to fix it.

Collusion.

 

[wingnut771]

Collusion.

How is having more than one network in an area collusion?

 

[charlieharper]

As far as I understand, it is a simple case of mathematics. It costs about R8,000 to R10,000 to pass one house in a suburb. To break even you need at least 20% signup and at 30% you start making a profit. In Benoni there are a number of suburbs with three FNO's and therefore all three cannot make a profit as not everyone will sign up for fibre and those that do, normally sign up to the first provider that becomes available. I think that Vumatel introduced their no overbuild policy due to the fact that they were just not making money when overbuilding. I am of the opinion that the reason that there is no overbuilding is due to economics and not any agreement as I do not believe there is any love lost between Openserve and the other FNO's, besides the fact that it would probably also be illegal.

I suppose it's only trenched fibre that's that expensive though.
Most countries with great coverage (eg New Zealand, Korea, Japan, Thailand etc) rarely trench though.. instead, they pull their fibre overhead (aerial fibre). Much more cost effective. Especially considering the fibre optic cable itself is no more than about R10 per metre and a pole is like R500 each. They can probably do a whole street for R10,000.

I know municipalities in SA prefer if you do it underground, but many FNO's (eg Vuma, Openserve) still get aerial wayleaves approved.

 

[supersunbird]

How is having more than one network in an area collusion?

If you follow the conversation you will realize that a supposed FNO agreement NOT to built in same area was under discussion.

 

[Swa]

As far as I understand, it is a simple case of mathematics. It costs about R8,000 to R10,000 to pass one house in a suburb. To break even you need at least 20% signup and at 30% you start making a profit. In Benoni there are a number of suburbs with three FNO's and therefore all three cannot make a profit as not everyone will sign up for fibre and those that do, normally sign up to the first provider that becomes available. I think that Vumatel introduced their no overbuild policy due to the fact that they were just not making money when overbuilding. I am of the opinion that the reason that there is no overbuilding is due to economics and not any agreement as I do not believe there is any love lost between Openserve and the other FNO's, besides the fact that it would probably also be illegal.

Of course you can still make a profit. Just increase your ROI from 2-3 to 10 years. Half your price and more people will sign up. I don't know how 2 years became the norm to chase.