Several of South Africa’s top Internet service providers recently complained to MyBroadband about Vumatel’s fibre installation and activation charges.
Part of the problem, they said, is that Vumatel charges a full activation fee when subscribers want to switch ISPs.
Two of the biggest ISPs in the country said they now prefer selling products from other fibre providers because of Vumatel’s high installation fee.
Vumatel explained that its installation fee of R1,500 (excl. VAT) is already heavily subsidised and includes the material, hardware, and labour costs associated with the installation.
While ISPs typically choose to pass on this cost to the consumer, Vumatel said there are also ISPs who run regular promotions during which they absorb the installation cost.
Vumatel argued that a better way to compare the price of fibre-to-the-home providers is to look at the total cost of ownership from a consumer perspective.
Just looking at the initial fees does not tell the whole story, as some fibre infrastructure providers may elect not to charge lower up-front costs, but then charge higher recurring monthly fees.
A simple comparison of the installation and activation charges of various infrastructure operators in South Africa shows that Vumatel is not the only company that charges for switching from one ISP to another – as detailed below.
There are several types of fees which my apply to Openserve fibre installations.
Openserve Connect charges an installation fee for the first 8 metres of trenching and unblocking of pipes, with additional trenching charged at a per-metre rate.
While other networks did not explain their installation fees in this detail, many operate on the same principle.
Openserve then charges a recurring monthly fee for the use of its infrastructure. The ISP then adds its price for access to the Internet to this for the total bill.
Openserve also charges the following non-recurring fees:
- Service Activation – Charged when activating a service, but no installation is required.
- Call Out – When a technician gets dispatched for a fault that is not on the Openserve network.
- Re-grading – Upgrading or downgrading line speeds.
Openserve declined to disclose its pricing, but MyBroadband was able to obtain a price list from an Internet service provider. Openserve offers lower pricing to ISPs depending on the length of contract they sign.
MetroFibre Networx charges different installation fees depending on the type of residence. Its fees include the first 15 metres of trenching.
Its fees are inclusive of VAT and are:
- Complexes/MDUs – R862.50
- Free-standing homes – R1,150
- Agricultural holdings – R2,300
Faircape Group’s infrastructure business charges an installation fee the first time it rolls out to a residence. Its fee is R1,500 excl. VAT.
Installation fees for businesses is dependant on a site visit and quotation.
Cybersmart’s prices are available at openaccess.cybersmart.co.za.
It explained that there are three prices:
- Activation/setup/migration/reconnection – a non-recurring cost.
- Circuit fee – a recurring cost which is a function of the installation fee, as well as the type of service.
- A variable recurring charge which represents the speed of the circuit.
Cybersmart’s Lightspeed service allows subscribers to dial their speeds up and down as they need. This is reflected in the variable charge. If you never change your speed, the variable charge will never change.
If it does change, your ISP is billed for the sum of the highest upload and download speed ration on that particular day, at a set rate.
ISPs can reduce this variable fee by increasing the size of their network-to-network interconnect they have with Cybersmart.
Cybersmart does charge a reconnection or migration fee where its infrastructure is already installed, but the company said that these are much lower than its initial installation costs.
For residential installations, Cybersmart offers a low, medium, and high installation cost. The higher the initial installation cost you pay, the lower your monthly recurring fee.
The company did not provide comment.
FTTH once-off fees
The table below summarises the fees of FTTH providers.
|SA Digital Villages||R999-R1,700||R0||R0||R0|
|Cybersmart||R1,499–R3,999||R0||R0||Less than installation|
*Price provided by ISP.