South African domain name price hikes on the horizon

South African hosting providers Absolute Hosting and 1-Grid will implement slight price adjustments following the recent increase announcement by the ZA Domain Name Authority (Zadna).

The authority announced it would implement a 5.23% price adjustment in the rate of billable transactions for all co.za, org.za, net.za, and web.za domains with effect from 1 October 2024.

This includes increasing the registration and renewal fee from R55 to R61 per domain name.

MyBroadband asked several local hosting providers how the adjustments would affect their pricing.

Absolute Hosting managing director Jade Benson said the company reviewed Zadna’s announcement and would try to absorb some of the increase.

“We are aware that our clients are sensitive to price increases overall, and it is because of this that we introduced affordable co.za domain registration pricing at R69 incl VAT last year,” said Benson.

He anticipates that Absolute Hosting will implement just a R2 price increase for its domain registration fee.

“We anticipate that our co.za domain registration fee after the price increase will be priced at around R71 incl VAT, as we try to absorb some of the increases announced by ZADNA and reduce the impact on our clients,” said Benson.

1-Grid noted that the price of its .co.za domain registrations had already increased from R89 to R99.

“This is the only price adjustment we’ve implemented recently,” it added.

Zadna announced the impending price hikes on Friday, 21 June 2024, and noted that the adjustment is CPI-linked.

CEO Molehe Wesi said Zadna had made the decision based on an extensive financial analysis and the impact of exchange rates and inflation on its operational expenses.

“This decision follows thorough consultations with industry stakeholders and aligns with current economic developments and operational needs,” said Wesi.

It’s important to note that Zadna’s adjustments are wholesale fee increases.

Registrars must decide whether to absorb the increases or whether to pass them on to customers.

The authority also highlighted its estimated price hikes for the 2025/26 and 2026/27 financial years. Its price hikes for the next three years will be as follows.

• 2024/25 — 5.23%
• 2025/26 — 6.56% (estimate)
• 2026/27 — 6.15% (estimate)

“These figures will be confirmed annually in July, based on the prevailing Consumer Price Index (CPI), allowing for industry implementation in October of every year,” said Wesi.

Jade Benson, Absolute Hosting managing director

He advised that stakeholders align their timelines and communications with the authority to facilitate a smooth transition.

Zadna also announced the launch of the Non-Commercial Development fund, which will see the ZA Registry Consortium (ZARC) collect and transfer accumulated funds each month to support non-commercial initiatives and capacity developments.

Wesi said the organisation would allow multi-year registration and renewals on terms of up to five years.

“This new option will coexist with the current annual registration and renewal structure, providing registrants with greater flexibility and choice,” he said.

Zadna aims to implement the new policy by 1 October 2024. It said it would collaborate with the ZARC and stakeholders in the months leading up to its implementation.

ZARC is the registry operator for co.za, org.za, net.za, and web.za.

Domain Name Services CEO Neil Dundas told MyBroadband that the price adjustment was initiated and motivated by ZARC.

He said ZARC initiated the domain name wholesale fee adjustment request in mid-2023, with plans to implement it in October of the same year.

“For several reasons unknown to us, the anticipated inflationary wholesale price adjustment was never implemented in 2023,” said Dundas.

He explained that the ZARC initiated the process again in 2024, this time considering the missed 2023 adjustment.

“This, in a nutshell, is what led us to the current wholesale price adjustment from R55 to R61 (excl. VAT),” said Dundas.

“As the ZARC, we believe that this wholesale price adjustment, which is the first adjustment since 2021, will enable us to continue to provide the level of service our registrars have come to expect.”

He added that the ZARC believes the adjustment is reasonable and will continue to position the .ZA second-level domain structure, particularly co.za, as an attractive, competitive, and affordable namespace for registrars and the general Internet community.