Is Open Access Dead?

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Delingr

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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 :)​
 
Delingr said:


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.

​
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How do you offer that to an end user without an Open Access network?

PS, I also work directly in this industry it appears.
 
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pinball wizard said:
How do you offer that to an end user without an Open Access network?
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If you're providing a reliable service at a good price then there shouldn't be a need to move providers. I understand what I'm saying is perfect world theory, and we're all terrified of another Telkom scenario. The idea is how do you bring the cost down without sacrificing network quality, support and ultimately the businesses bottom line.
 
Delingr said:
If you're providing a reliable service at a good price then there shouldn't be a need to move providers.
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Well, in my perfect world scenario, me, the FNO is providing a reliable, stable service in an open access manor. That leaves ISP's free to hustle in whatever way they see fit to garner customers. Free market and all that. Monopolies simply don't work. And without an open access environment, and end user runs a very real risk of being sold the short end of the stick, ala Telkom as you point out. And history shows us that monopolies almost always end up with a Telkom scenario, in any industry in any country.
 
If the FNO provides the service the pricing will also be around what the ISP charges as they will have to increase their support services as they will not have the ISP who will provide the support for the services and filter out the non issues from the real actual issues. Want proof of such issues look in this forum- many non issues being posted only to be found to be a user side issue.

Those support people will have to be trained and paid. That is where the ISP is already ahead as they have the staff in place and only needs to train them on the new products and services.
 
Delingr said:
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.
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The above pricing would still be a relative long shot unless you want your ROI to be 7 - 10 years, there is a low point on FTTH, IE you will never see a R199 20 Mbps service, but bandwidth packages will increase in tiers as you are seeing currently with openserve and other operators. IE 20Mbps in 2021 for R599 then 50Mbps in 2022 for R599 and so on, however a R399 service is not viable it is usually sold at a loss by the FNO and/or ISP. You could offer a 1Gbps OA service for R799 as an example if you were able to recover some of the Invetsment upfront, such as Cybersmart's R899 - 500Mbps service, which a R5000 once off is charged.


The kick up and fuss from Body corporates/ HOA and free standing homes about Closed access is not worth it, residents wanting to have 100 ISPs choose from is the problem, no customer loyalty, clients will cancel with ISP A to save R5 per month , by signing up with ISP B.
 
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Zaque said:
The above pricing would still be a relative long shot unless you want your ROI to be 7 - 10 years, there is a low point on FTTH, IE you will never see a R199 20 Mbps service, but bandwidth packages will increase in tiers as you are seeing currently with openserve and other operators. IE 20Mbps in 2021 for R599 then 50Mbps in 2022 for R599 and so on, however a R399 service is not viable it is usually sold at a loss by the FNO and/or ISP. You could offer a 1Gbps OA service for R799 as an example if you were able to recover some of the Invetsment upfront, such as Cybersmart's R899 - 500Mbps service, which a R5000 once off is charged.


The kick up and fuss from Body corporates/ HOA and free standing homes about Closed access is not worth it, residents wanting to have 100 ISPs choose from is the problem, no customer loyalty, clients will cancel with ISP A to save R5 per month , by signing up with ISP B.
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Look at Vumatel tho, 20mbps for 399 and 40mbps for 529.
 
This is just an illusion of choice.

Same FNO backhauled by the same provider. ISPs using the same upstream like NAP and seacom etc. It's all the same thing with different badges on it.

Right now the golden era has passed. FNOS scrambling to build in small towns because the low hanging fruit has been devoured.

Next we will see big consolidation Ala Vumatel buying SADV from the same share holders lol.

Entry to market is really easy for an ISP right now. Get half a rack at teraco pay a couple of commits get some seacom and you in business. How long will that last ? Again consolidation will happen customer bases will get sold...
 
Zaque said:
no customer loyalty, clients will cancel with ISP A to save R5 per month , by signing up with ISP B.
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Firstly, why should a customer be loyal? The consumer regularly gets screwed over by service providers, everyone is in it to make money.

Secondly, most FNOs charge fees for changing ISPs. On Octotel, as far as I'm aware, I'd need to pay something like R800 to switch to a different ISP. I'm happy with mine, they're not the cheapest but the service and support has been excellent. I wouldn't switch unless they were really out of line with pricing, or if quality of the service deteriorated. Certainly not for R5/m.
 
@Jaseyyxx

the ROI on the vuma reach products are extremely long compared to a normal model, second to that they do not allow end users to control their lines, the same way as an Open access environment, they drop a Wi-Fi based ONT and CGNAT the network.

If eryone would be happy with not using their own router/ ISP provided router and the FNO controlling their CPE, then it wont be an issue.

@Totempole correctly stated, they are aiming at a lower income bracket and currently higher speeds would still be around the same cost as a normal line.

@mono2 it also comes down to the FNO as the ISPs all share the same backhaul back to the DCs anyways, so a closed access network would make people angry but Open access gives the end user "piece of mind" but its the same thing at the end of the day
 
Zaque said:
@Jaseyyxx

the ROI on the vuma reach products are extremely long compared to a normal model, second to that they do not allow end users to control their lines, the same way as an Open access environment, they drop a Wi-Fi based ONT and CGNAT the network.

If eryone would be happy with not using their own router/ ISP provided router and the FNO controlling their CPE, then it wont be an issue.

@Totempole correctly stated, they are aiming at a lower income bracket and currently higher speeds would still be around the same cost as a normal line.

@mono2 it also comes down to the FNO as the ISPs all share the same backhaul back to the DCs anyways, so a closed access network would make people angry but Open access gives the end user "piece of mind" but its the same thing at the end of the day
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I'm on VumaReach and have almost full access to my CPE, I can change settings that matter like port forwarding and such, also I have a public IP from my ISP. What happens with new signups on almost any FNO is you get put behind a CGNAT until the customer requests a public IP. Most people don't need the public IP and won't even notice being behind a CGNAT
 
waylander said:
Extreme shortage - and not aided by the local squatters leasing millions of African IPs to Chinese IP brokers. @Jan has covered it quite extensively and I have my thread on Cloud Innovation too - it's bad!
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Interesting. My ISP offers IPv6, I just need to enable it on my router, but I haven't bothered to educate myself as to the pros and cons just yet.
 
Open Access is very much alive but hear me out about this hypothetical situation out because I am losing my hair.

FNO is rolling out to an area, ISP's are notified and they get the ball rolling.
FNO now has its own ISP on the network. Not the same company but a sister one.
Said ISP undercuts every single ISP on the network.
Said ISP now has an entry-level package below cost for a promo.

So the Open Access model in this hypothetical case is functioning, but none of the ISP's can actually compete with the FNO's own ISP.
 
ghostRgg said:
Open Access is very much alive but hear me out about this hypothetical situation out because I am losing my hair.

FNO is rolling out to an area, ISP's are notified and they get the ball rolling.
FNO now has its own ISP on the network. Not the same company but a sister one.
Said ISP undercuts every single ISP on the network.
Said ISP now has an entry-level package below cost for a promo.

So the Open Access model in this hypothetical case is functioning, but none of the ISP's can actually compete with the FNO's own ISP.
Click to expand...
Is this a real situation? Doesn't seem terribly plausible to me.
 
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