We completely understand your frustration with these price increases, especially since they seem to be coming from all directions.
As an ISP, any increase passed on to consumers is directly tied to rising input costs, with FNO line rental being the largest. We’ve consistently absorbed as much of these costs as possible, only adjusting service pricing in line with FNO increases—sometimes even less—while not fully accounting for other rising expenses.
That said, it’s worth noting that internet costs, relative to inflation, have actually decreased over the years. A 50 Mbps fibre service today is significantly more affordable than a 4 Mbps ADSL connection in 2010, which cost around R700-R800 per month (roughly R1,500 today when adjusted for inflation). Meanwhile, essentials like petrol, DSTV, and food have more than doubled in price.
Key factors driving these FNO increases include:
- Debt Costs: Rising interest rates have made fibre rollouts more expensive. And the FNOs have borrowed heavily to fund their growth these past few years. Unfortunately, even if rates drop, it’s unlikely FNOs will reduce pricing, as they're facing billions in debt payments annually.
- Energy Costs: The cost of electricity has outpaced inflation 2X the past few years, and Eskom’s instability forces ISPs and FNOs to invest heavily in backup power solutions, increasing operational expenses. Power is a big factor in operating any network.
- Market Maturity: The fibre “gold rush” has slowed, meaning FNOs can no longer offset costs and losses through rapid expansion.
- Labour & Inflation: Rising living costs drive up salaries, impacting all sectors, including network operations and customer support.
- Maintenance & Infrastructure Costs: Fibre networks require ongoing maintenance, replacement of aging equipment, and additional security measures due to theft and vandalism.
We remain committed to providing the best possible service at the most competitive rates while navigating these challenges. Your understanding and continued support are truly appreciated.
Sign up with Google
