Is there really a long-term point in this mad rush for Open Access Networks?
The majority of consumers on FTTH end up choosing the cheapest product they can find, and very few stay loyal to a company or brand name.
With the amount of competition, low margins and the ongoing price war between ISPs it leaves little to be desired in the long-term telco space. The only real long term survivors here will be the household name ISPs who have the deep pockets to fund customer acquisition cost of free router, free installation, etc and wait for their 12-24 month return on the customer.
There's also the duplication of costs. You have the FNO with their costs to A) Run a business & B) Run a network. Then you have the ISP, who has the exact same costs, although without as much of a capital outlay as the FNO. The FNO needs to make a profit, the ISP needs to make a profit. These costs are all passed on to the customer at the end of the day. I strongly believe if the FNO operated a closed network, they would be able to provide a 20Mbps product at the R399 price point and up to 1Gbps at R799.
I work directly in this industry so I know that this is technically and financially possible, the only thing pushing back is the consumer who wants choice and not to be forced into a "monopoly" provider. If this were to be regulated properly to prevent FNOs from charging excessive fees, then I don't see why this shouldn't be a viable solution for South Africa as a whole? Vox owns Frogfoot, RSAWEB owns Octotel, why can't the ISP merge into the FNO, remove the duplication and reduce the opex to provide affordable products to everyone?
I'd love to get everyone's thoughts on this
The majority of consumers on FTTH end up choosing the cheapest product they can find, and very few stay loyal to a company or brand name.
With the amount of competition, low margins and the ongoing price war between ISPs it leaves little to be desired in the long-term telco space. The only real long term survivors here will be the household name ISPs who have the deep pockets to fund customer acquisition cost of free router, free installation, etc and wait for their 12-24 month return on the customer.
There's also the duplication of costs. You have the FNO with their costs to A) Run a business & B) Run a network. Then you have the ISP, who has the exact same costs, although without as much of a capital outlay as the FNO. The FNO needs to make a profit, the ISP needs to make a profit. These costs are all passed on to the customer at the end of the day. I strongly believe if the FNO operated a closed network, they would be able to provide a 20Mbps product at the R399 price point and up to 1Gbps at R799.
I work directly in this industry so I know that this is technically and financially possible, the only thing pushing back is the consumer who wants choice and not to be forced into a "monopoly" provider. If this were to be regulated properly to prevent FNOs from charging excessive fees, then I don't see why this shouldn't be a viable solution for South Africa as a whole? Vox owns Frogfoot, RSAWEB owns Octotel, why can't the ISP merge into the FNO, remove the duplication and reduce the opex to provide affordable products to everyone?
I'd love to get everyone's thoughts on this