Internet service providers have applauded Openserve for its recent IP Connect (IPC) price cuts, which will improve the value consumers receive.
Openserve’s IPC is used by ISPs for ADSL, VDSL, and fibre-to-the-home (FTTH) products.
Depending on the IPC capacity purchased, ISPs can now benefit from price reductions of up to 32% – effective from 1 June 2017.
The Openserve price cuts will help ISPs improve the DSL experience and make FTTH products more attractive, they said.
MyBroadband spoke to prominent South African ISPs regarding Openserve’s price cuts – and what customers can expect.
Afrihost – It will improve the ADSL experience and will help fibre roll-out
Afrihost’s commercial director Greg Payne congratulated Openserve for the price reduction, stating it will improve the general ADSL experience and will help Openserve’s fibre roll-out.
“Having said that, there is still a long way for them to go to be competitive compared to other open access FTTH providers,” said Payne.
Payne said the price cuts will help Afrihost to upgrade its network capacity to ensure all its clients get the best experience possible.
Axxess – We plan to use most of the savings to increase our network capacity
Axxess director Franco Barbalich welcomed the price cut. He said they plan to use most of the savings to increase network capacity.
“This price cut and network upgrades will help us to deliver an even better service to our clients,” said Barbalich.
Internet Solutions – IPC price cuts are good news, but we believe Telkom could completely remove IPC charges
Sean Nourse, chief solutions officer at Internet Solutions, said that while IPC price cuts are good news, he believes Telkom could completely remove IPC charges.
“As a pan-African telecommunications provider, we fail to realise why IPC costs exist today in South Africa – as opposed to a nominal interconnect fee,” said Nourse.
“In fact, we don’t pay any IPC costs with our FTTH providers, the only fee we incur on occasion is a nominal interconnect fee. It’s time for real change.”
Nourse said IS continuously looks to pass on value to clients that occurs through changes in the industry.
“Given the announcement is recent and Telkom had not communicated this change prior to this announcement, we need to complete our analysis so we can pass sustainable value onto our clients,” he said.
Cybersmart – The only financially-sustainable option is to increase value as opposed to reducing prices
Cybersmart CTO Laurie Fialkov said most of the revenue on DSL is on the line rental, which ranges between 70% and 85% of the price of the product.
The impact of the Openserve IPC price cut therefore only affects a small part of the overall price of DSL and FTTH products.
“Because FTTH is also running on IPC and an ISP’s speed requirement has more than doubled – from 40Mbps for VDSL to 100Mbps on FTTH,” he said.
“This means you need to take most of that 32% saving and reinvest it in network capacity, otherwise you run the risk of significantly impairing the quality of the service.”
Fialkov said the only financially-sustainable option is to increase value, as opposed to reducing the price of DSL and FTTH products.
Telkom – We hope to announce developments in the coming months
Telkom spokesperson Jacqui O’Sullivan said the company continuously reviews its products and services to offer its customers more value.
“We hope to announce some developments in this regard in the coming months,” said O’Sullivan.
Webafrica – Too early to comment
Webafrica’s Greg Wright said it is too early for them to comment, and that they will need to meet with their upstream provider to determine the impact of the price cuts.