Internet Solutions has informed subscribers it is increasing the price of its connectivity and cloud services.
The company said the severe devaluation of the rand against leading currencies, along with inflationary impacts on its input costs, has significantly impacted its business.
The impact is also being felt by other South African Internet service providers who are using US dollar-based services and products.
MyBroadband asked them what the impact of the weak rand is having on their businesses, and whether consumers can expect price hikes.
MWEB: We will absorb as much of the impact as we can, and only look at price adjustments where absolutely necessary
MWEB CEO Derek Hershaw said the weak rand impacts many areas, and that international bandwidth and Capex are particularly hard hit.
He said no telecommunications products are completely immune – be that directly or indirectly – to a weaker rand.
Despite these challenges, MWEB has no immediate plans to increases the price of its products.
“The SA consumer is getting battered from all sides, and we will try not to add to that,” said Hershaw.
“We will absorb as much of the impact as we can and only look at price adjustments where it is absolutely necessary.”
Axxess: Our connectivity-based product pricing has not been affected by the weak rand
Axxess director Franco Barbalich said the weak rand has affected a few non-connectivity related products and services which they offer.
“We have done the relevant price increases last month on these products, which included international domain name and some hardware prices,” said Barbalich.
The good news is that Axxess’s connectivity-based products have not been affected, as the company’s upstream providers have absorbed the additional costs.
Crystal Web: We have absorbed all price increases on behalf of our customers
Crystal Web CEO Shaun Kaplan said the weaker rand impacts on all services due to the reliance on international services and assets to operate a network.
However, Crystal Web has absorbed all price increases on behalf of its customers, and no price increases are planned at this point in time.
Cybersmart: We have most of our major supply contracts in rand
Cybersmart CEO Laurie Fialkov said they have most of their major supply contracts in rand, and those that are in foreign currency, they hedge for a 12-month period.
“There is stuff that we import, which is now 5% more expensive, but that is mostly hardware,” he said.
He said the weak rand has some advantages as well. “Local fibre duct manufacturers are now cheaper than China, which is amazing,” said Fialkov.