ISPs claim Telkom’s cheap Openserve fibre prices are below cost

Hanno Labuschagne

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ISPs claim Telkom’s cheap Openserve fibre prices are below cost

Prominent ISPs in South Africa have raised concerns that Telkom’s fibre pricing may be anti-competitive as it is sold below cost.

Telkom Retail is currently offering a 25/25Mbps fibre package on the Openserve network at R449 per month - the cheapest on the market.

Telkom is also running a promotion for a 25/5Mbps package in april for R399 per month on a 12-month contract.
 

Vorastra

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ISPs claim Telkom’s cheap Openserve fibre prices are below cost

Prominent ISPs in South Africa have raised concerns that Telkom’s fibre pricing may be anti-competitive as it is sold below cost.

Telkom Retail is currently offering a 25/25Mbps fibre package on the Openserve network at R449 per month - the cheapest on the market.

Telkom is also running a promotion for a 25/5Mbps package in april for R399 per month on a 12-month contract.
So what's the game?
Supplementing Telkom wholesale losses with Telkom retail revenue?
 
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ghostRgg

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Brought this up before and got told it's fair because they own the infrastructure. Same is happening in many fibre rollouts where the sister/other company is an ISP which sells deals below what is impossible for other isps to compete with. It's a tactic that honestly is a grey area.

Those moaning that isps are overcharging and milking consumers need to look at the actual network costs. It's not just a line rental fee, it's switches, backup routes, software, interconnects, backhauls costs, international routes, local routes, ASN costs, IP address (expensive and running out here) and even more involved.
 

ghostRgg

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So what's the game?
Supplementing Telkom wholesale losses with Telkom retail revenue?
Basically why I'm not a fan of this. Other networks are doing it though. Even if their ISP makes a loss, the line rental/infrastructure provider picks up it anyway since they make rental on it. Cheaper and you get more users moving over to it. Actually a good tactic but shady as hell.
 

Corelli

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I wish openserve can come to my area. I would pay half of what I pay Vuma, and still get a faster line.

Seriously I never had issues with Telkom but everyday I see my community page members complain about long downtimes with Afrihost and MWeb, and I smile cause I dont have issues.

Its about growing the userbase. Amazon ran for about 8 years at a loss, Netflix has been running at a loss just to get users.
 

r00igev@@r

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Bwahahahahaha - good luck on subscribing to this. Telkom billing will make a mistake and empty your bank account!
 

randomcat

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568zdk.jpg
 

Swa

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They're selling it below what they're charging the resellers, not selling it below cost. There's a big difference there. If you don't like it then start providing your own services. We shouldn't have this separation of network and ISP in any case.
 

|tera|

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They're selling it below what they're charging the resellers, not selling it below cost. There's a big difference there. If you don't like it then start providing your own services. We shouldn't have this separation of network and ISP in any case.
It's a kak separation. Makes everything difficult for everyone.

Just a method to fleece.
 
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mr_norris

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why are you comparing an FNO to an ISP?
Headline: ISP's claim Telkom's cheap Openserve Fibre prices are below cost

On a less serious note, it was only a matter of time before people started complaining about Vuma. I thought I'd get in early on the action :D
 
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