The new fixed line Monopoly

[TheGuy]

We have recently discovered that there is a new Monopoly in the country regarding fiber roll out.

What the companies have done is to go to the Malls and sign contracts with the Mall management to be the only authorized provider that is allowed to terminate fiber in the malls.

What happens now is that we can get fiber to the mall but we are not able to terminate it to our shop in the mall. What has happened in some instances is the connection to run the fiber from the meet me room in the mall to our shop works out more expensive then the part that runs from the mall to another part in the country.

Can MyBB maybe do an article on it?

 

[Dlamaqhinga]

This needs to be investigated and reported to the competition commission as this is anti competitive practice.

 

[DJ...]

We offer products in most malls in SA and this is not in any way how it works.

Can you explain what you mean by this? There is a once-off installation cost to the end-user and then a far reduced rate on the broadband over fibre for this type of access...

 

[Pavan]

err... the mall/shopping centre is a business itself, built by developers. Telco's enter into a B2B agreement with the developers and property managers to provide connectivity as a basic service - similar to other utilities. The property management team then enters into a pseudo- B2B2C agreement with it's tenants... This is the way it should be. It avoids continuous disruption to the mall for the property managers and allows them to act as a reseller for their chosen partner - providing a new revenue stream.

This is a widely accepted model around the world.

Edit - this is for the last-mile. Who you chose as your ISP is up to you and inter-operability between ISPs and network providers.

 

[Mars]

We offer products in most malls in SA and this is not in any way how it works.

Can you explain what you mean by this? There is a once-off installation cost to the end-user and then a far reduced rate on the broadband over fibre for this type of access...

It would be a good exercise to see if you would be able to provide this person with fibre.

 

[MickeyD]

We offer products in most malls in SA and this is not in any way how it works.

Can you explain what you mean by this? There is a once-off installation cost to the end-user and then a far reduced rate on the broadband over fibre for this type of access...

Try to provide a Fibre service to any shop in Baywest Mall (PE) without using Vodacom Fibre...

 

[DJ...]

It would be a good exercise to see if you would be able to provide this person with fibre.

Almost certain that we can considering that it's in Jozi and that our layer 2 network runs into most JHB malls already.

The only hiccup here is if the mall management are charging their own internal fee for access for you as the shop to their meet-me-room. We can assist with that as well though...

 

[DJ...]

Try to provide a Fibre service to any shop in Baywest Mall (PE) without using Vodacom Fibre...

We have fibre close in Sherwood, but yes that is an MNO network and it's such a pity when this sort of thing happens and the tenants are left to suffer with higher operational costs than are necessary...

 

[TheGuy]

err... the mall/shopping centre is a business itself, built by developers. Telco's enter into a B2B agreement with the developers and property managers to provide connectivity as a basic service - similar to other utilities. The property management team then enters into a pseudo- B2B2C agreement with it's tenants... This is the way it should be. It avoids continuous disruption to the mall for the property managers and allows them to act as a reseller for their chosen partner - providing a new revenue stream.

This is a widely accepted model around the world.

Edit - this is for the last-mile. Who you chose as your ISP is up to you and inter-operability between ISPs and network providers.

Ok so this is all legal and above board? It was just weird that we are able to get Diginet lines installed but not Fiber lines unless we use their provider that is already in the mall.

 

[TheGuy]

Try to provide a Fibre service to any shop in Baywest Mall (PE) without using Vodacom Fibre...

This is one of our problem malls.

 

[Pavan]

Ok so this is all legal and above board? It was just weird that we are able to get Diginet lines installed but not Fiber lines unless we use their provider that is already in the mall.

Yeah, totally legal. Think of it as a B2B agreement between property manager/developer and utility provider. MTN, Neotel, Voda, Telkom, etc. have signed up most of the malls already... The same goes for WiFi with companies like AlwaysOn.

 

[DJ...]

Ok so this is all legal and above board? It was just weird that we are able to get Diginet lines installed but not Fiber lines unless we use their provider that is already in the mall.

With the landlord's permission you can put in your own fibre as well.

However without it, you're stuffed. And that's their prerogative.

I should point out that you can use any service provider that has a layer 2 network or interconnect with the backhaul provider, so you're not stuck with a single provider situation. However there are not many of us who have a proper layer 2 network - most operators are just resellers of one of our networks by the way, so shop around.

We recently quoted 40% less than what another provider was trying to shaft the shop for simply because we have the economies of scale to move this over a massive network that is currently underutilised to be honest...

 

[DJ...]

This is one of our problem malls.

You're unfortunately stuffed on that front.

I cannot, without coming to some alarming conclusions, understand how a rational building manager opts for this sort of fibre for his/her tenants...

 

[MickeyD]

We have fibre close in Sherwood, but yes that is an MNO network and it's such a pity when this sort of thing happens and the tenants are left to suffer with higher operational costs than are necessary...

Now you know why Thriftwood housing complex was the first Telkom FTTH project... Massive node closest to that Mall.

The Mall owners were forced to relent when big corporates insisted on Telkom services as they have national business contracts. Smaller shops complained due to lack of card machine facilities....

 

[TheGuy]

With the landlord's permission you can put in your own fibre as well.

However without it, you're stuffed. And that's their prerogative.

I should point out that you can use any service provider that has a layer 2 network or interconnect with the backhaul provider, so you're not stuck with a single provider situation. However there are not many of us who have a proper layer 2 network - most operators are just resellers of one of our networks by the way, so shop around.

We recently quoted 40% less than what another provider was trying to shaft the shop for simply because we have the economies of scale to move this over a massive network that is currently underutilised to be honest...

Our provider is using DFA's layer 2 network but it seems even they are getting stuck with these negotiations sometimes.

Will it be possible to do an article on it just so the word gets out and Mall owners start becoming aware that this sort of practices can actually hamper the shop owners business?

 

[kianm]

Whot

 

[DJ...]

Our provider is using DFA's layer 2 network but it seems even they are getting stuck with these negotiations sometimes.

Will it be possible to do an article on it just so the word gets out and Mall owners start becoming aware that this sort of practices can actually hamper the shop owners business?

I'm still not understanding where they are stuck though?

Can you explain a little for me where the exorbitant costing is coming in and for which mall? You can PM me and I can have a look at it for you and maybe provide you with some insight...

 

[davidvanrensburg]

DJ I think that theguy is trying to say is that developers sometimes offer telco providers exclusivity in their buildings for the last mile access. Other times the first fibre provider may tell the land lord that they would cable the entire building for exclusivity etc. This could add a furthur cost for another tenant who would require a fibre service as they may need to rent the last mile from the exclusive isp. Other times it may help if open access is available.

At the end of the day and in terms of the communications act, any licensed telecoms provider has the legal right to provide services directly to their customer, so landlords need to accept this.

 

[Paul Hjul]

Sadly you are more likely to find a puff piece article praising a cartel player who had a rough weekend on the forum than an actual investigative article on this issue.

The heart of the matter is that new property developments (greenfields) offer a massive opportunity to guys laying down network facilities and if there is a latent demand in the development (so think high foot traffic shopping malls with neighbouring office parks) it becomes exceptionally viable for network operators to bundle in the service providing scope into a single offering in the hope of capturing that business. If the property development itself is suffering for capital shortage or a lack of guaranteed uptake the room is created for a network operator to negotiate special exclusivity and the like.

However before throwing too big a stone at any particular MNO for cartel type behaviour it is best to consider the general landscape created by a lack of political leadership and real innovation in the market.

If you are a big teleco who has invested a gizzilion rand into network assets and certain municipalities are rapidly entering the space of undermining the market for NOs by competing as a de facto NO in metropolitan areas and there is a property development market which you can capture it is quite simply your only rational option.