Telkom fibre price turnaround

Partially state-owned network operator Telkom sells Openserve fibre-to-the-home (FTTH) packages at prices that are highly competitive with many of its rivals.

The company had previously been accused of offering unfair pricing on Openserve packages, with competing Internet service providers (ISPs) alleging that they were selling some packages at below cost.

Telkom launched Openserve as a functional separation of its wholesale operations in 2015, before legally separating the company from itself in September 2022.

Openserve is a wholly-owned subsidiary of the Telkom Group. However, it operates autonomously.

In April 2021, prominent ISPs accused Telkom of offering anti-competitive fibre pricing on Openserve packages.

At the time, it advertised a 25/25Mbps Openserve FTTH package at R449 per month, making the product the cheapest on the market.

Moreover, it offered a promotion where customers could get the package for R399 per month on a 12-month contract.

ISP executives told MyBroadband the pricing from Telkom is suspect when considering the wholesale costs associated with this product.

At the time, Openserve charged a wholesale price of R410 for the package, excluding VAT. With VAT added, the rental cost alone would be R472.50 per month — R23.50 more than Telkom’s advertised price.

The fibre network operator (FNO) also charged a Broad Connect wholesale fee for local bandwidth usage on the line, for which it charged R9 per Mbps.

Therefore, it appeared as though Telkom was either making a loss on the 25/25Mbps FTTH package or that Openserve was offering Telkom the package at reduced rates.

This resulted in ISPs alleging that Telkom was engaging in anti-competitive behaviour. A prominent fibre ISP executive told MyBroadband at the time that the package’s break-even point was around R483.

A new MyBroadband analysis showed that this practice appears to have stopped, with Telkom’s pricing for Openserve packages often being higher than competing ISPs.

Entry-level FTTH price showdown

MyBroadband compared FTTH prices available through Afrihost, Axxess, RSAWeb, Telkom, and Webafrica across prominent FNOs.

As not all packages offer the same download speeds, we calculated the price per megabit per second (Mbps) for each package to determine which offers the best value for money.

Regarding various ISPs’ pricing for Openserve packages, Telkom’s pricing compares fairly well to Afrihost, Axxess, RSAWeb, and Webafrica.

The asymmetrical Openserve 50Mbps package’s price per Mbps is R13.10 through Telkom, with Axxess and Afrihost offering slightly better pricing of R12.70 and R12.94, respectively.

However, RSAWeb and Webafrica’s pricing is slightly higher at R13.70 and R13.98 per Mbps, respectively.

Regarding the FNO’s symmetrical packages, Telkom doesn’t offer the symmetrical Openserve 30Mbps connection.

Axxess and RSAWeb’s pricing for the package is R16.17 per Mbps, while Afrihost’s is R16.33 per Mbps, and Webafrica’s is R16.63 per Mbps.

Telkom does offer Openserve’s symmetrical 50Mbps package, and it offers the second-best price per Mbps of the ISPs compared.

Afrihost’s pricing for the package equates to R14.94 per Mbps, while Telkom’s pricing works out to R15.18 per Mbps.

Meanwhile, RSAWeb charges R15.30 per Mbps, Webafrica charges R15.38 per Mbps, and Axxess charges R15.70 per Mbps.

The tables below compare entry-level FTTH prices from Afrihost, Axxess, RSAWeb, Telkom, and Webafrica across various FNOs regarding the price per Mbps.

The first table compares asymmetrical FTTH package prices, while the second compares symmetrical packages. The second table is further divided into speed categories.

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