Telkom is killing smaller ISPs through below-cost fibre offering – telecoms exec

[rpm]

Telkom is killing smaller ISPs – telecoms exec

Telkom is destroying small ISPs and slowing down fibre network rollouts by offering its 25Mbps Openserve fibre packages below cost.

This is the view of an executive from one of South Africa’s leading ISPs, who spoke to MyBroadband on condition of anonymity.

 

[NeonNinja]

So?

 

[Cactus]

An ISP’s only hope in this scenario is that another infrastructure provider comes to the area and offers an open access price that makes this customer profitable.

However, this is unlikely given that other fibre network operators (FNOs) are slowing down rollouts to keep their business case viable.

This has always been the case. Once someone lays fibre it's unlikely someone else will. Don't blame telkom for that

 

[konfab]

You can take OpenServe out Telkom, but you cannot take Telkom out of OpenServe.

In the long term, they cannot keep this up sustainably.

 

[Sideshow Bob]

So, this ISP executive - is he saying that prices need to be same across all providers, all other things being equal ?

So price collusion ?

According to the ISP executive, Telkom’s prices are in violation of the Electronic Communications Facilities Leasing Regulations of 2010, which are more commonly referred to in the industry as “open access” regulations.

In particular, clause 9 (3) of the regulations state that:

“An electronic communications facilities provider must apply similar terms and conditions, including those relating to rates and charges, in similar circumstances to itself, affiliates, and other electronic communications facilities seekers requiring similar services, unless otherwise requested by the electronic communications facilities seeker.”

 

[Willie Trombone]

So?

You don't get it?
The least Telkom can do is offer wholesale that is lower than retail, not the other way around

 

[Willie Trombone]

This has always been the case. Once someone lays fibre it's unlikely someone else will. Don't blame telkom for that

What makes you think Telkom is being blamed for that?

 

[Cactus]

What makes you think Telkom is being blamed for that?

Telkom is killing smaller ISPs – telecoms exec

Telkom is destroying small ISPs and slowing down fibre network rollouts by offering its 25Mbps Openserve fibre packages below cost.

This is the view of an executive from one of South Africa’s leading ISPs, who spoke to MyBroadband on condition of anonymity.

 

[R13...]

So?

Because it is anti-competitive behavior and once the small ISPs are killed off they'll jack up prices. In the end, it is you the consumer who gets shafted.

 

[Sideshow Bob]

Because it is anti-competitive behavior and once the small ISPs are killed off they'll jack up prices. In the end, it is you the consumer who gets shafted.

I hear you but till now wouldn't Telkom make the same argument? That the other ISP's were cheaper earlier and thereby killing Telkom business and they had to act in order to be competitive?

 

[mrlgm007]

Limited cover, they pull out the copper and not replace it and the closest LTE tower is 1.3 km away and oversubscribed

 

[eddief1]

Telkom would not be getting preferential costing from Openserv, that would get them in trouble quickly as all ISP's would lodge complaints instantly.

I am an huge supporter of small ISP's but I feel this is just a different business model, the big boys flexing their muscles if you like and simply buying clients to increase subscriber numbers and try and profit off value adds or wait for FNO costs to drop.

The marketing benefits are also huge. It's not just Telkom, other ISP's also do it.

The R399 price point is in the money

 

[Johnatan56]

Do note Telkom doesn't have that much of a lower cost in regards to rollout, they're still carrying quite a lot of baggage.

This is against open access rules though, one would have to see how they are cross subsidizing the loss.

 

[Bighit]

Because it is anti-competitive behavior and once the small ISPs are killed off they'll jack up prices. In the end, it is you the consumer who gets shafted.

Exactly this. Like when Mango still flew between Cape Town and PE, FlySafair used to charge R399 for the same route. Mango stopped flying that route and FlySafair increased their prices to R699.

 

[Herr der Verboten]

Telkom is killing smaller ISPs – telecoms exec

Telkom is destroying small ISPs and slowing down fibre network rollouts by offering its 25Mbps Openserve fibre packages below cost.

This is the view of an executive from one of South Africa’s leading ISPs, who spoke to MyBroadband on condition of anonymity.

Like afrihost's R29 internet killed them or vodacom killed by unsustainable uncapped internet

 

[The Magster]

Oh man, I don't believe I'm saying this but...wish my contract was with Telkom.

 

[StefanB7]

So?

They're planning of driving them out of the market. Once they're gone, there will be less competition and less competition is almost always worse for low prices.

 

[neoprema]

I know money is a problem for many but i'de much rather pay more than Telkom for proper customer services and infrastructure repairs when there's problems.

 

[grok]

Because it is anti-competitive behavior and once the small ISPs are killed off they'll jack up prices. In the end, it is you the consumer who gets shafted.

Funny how this was exactly what we said when ANC government propped up their monopoly all those years ago.
Reap what you sow, clowns..

 

[Kloofvreter]

Boohoohoo