Frogfoot has informed Internet service providers that it will implement a price increase to its wholesale fibre-to-the-home (FTTH) services from 1 July 2020.
This comes after the fibre network operator suspended a price increase that was set to take effect from the beginning of May due to the national state of disaster as a result of COVID-19.
At least four fibre network operators (FNOs), including Vumatel and Frogfoot, announced at the start of the year that the wholesale prices of their FTTH services would be increasing.
These price increases were all suspended as a result of regulations published by the Minister of Communications and Digital Technologies, Stella Ndabeni-Abrahams, which stated:
All licensed entities must not effect any price increase and not perform mobile number portability for the duration of the COVID-19 national disaster.
This line was deleted on 8 May by the current acting Minister of Communications and Digital Technologies, Jackson Mthembu, allowing network operators to increase prices once again.
Frogfoot initially informed ISPs about the pending price increase on 28 February. On 30 March, it informed ISPs that the price increase had been suspended and that it would happen on the first day of the month immediately after the state of disaster is over.
MyBroadband understands that the Minister’s deletion of the prohibition against price increases came as a surprise, but it effectively triggered the condition for previously announced wholesale broadband price increases to take effect.
On 13 May, Frogfoot informed ISPs that its previously announced price increase would kick in on 1 June. However, following feedback from its ISP partners, Frogfoot pushed the increase to 1 July.
FTTH subscribers on Frogfoot’s network should expect to receive notices from their ISPs in the next week or so regarding the price increase.
Increased labour costs, weakening rand
Frogfoot CEO and founder Abraham van der Merwe told MyBroadband that the price increases were unfortunately necessary.
Van der Merwe said the reality is their costs are increasing annually in line with inflationary increases in materials, as well as labour costs, which he said is a major cost-driver in construction.
“None of these factors even take into account the massive weakening of the rand, which substantially increases our material costs as most are imported,” he said.
Frogfoot has also incurred massive cost increases during the COVID-19 crisis due to increased operational costs and additional capacity requirements, though Van der Merwe said they will not try and recoup these losses from customers.
“We are simply absorbing these costs,” he said.
Van der Merwe said that subscribers will continue to benefit from free speed upgrades that Frogfoot rolled out at the beginning of April.
Fibre is driving broadband costs down
Van der Merwe added that fibre has been a major contributor to driving down broadband costs and improving the online user experience.
“Frogfoot has always been and still remains one of the lowest-priced fibre operators in the country,” Van der Merwe said.
“On top of that, we were the first – and still remain one of the only ones – to completely abandon backhaul costs for ISPs.”
Van der Merwe said that consumers don’t realise that Frogfoot does not charge ISPs anything for backhauling traffic from individual suburbs, no matter whether it is in the major metros or small rural towns.
“This is in contrast to most other fibre operators, including the two largest ones,” he said.
Frogfoot has been instrumental in bringing broadband to rural parts of South Africa, and it charges the same rates in towns like Ermelo or George as it does in Lynnwood or Tableview.
This is despite having to incur massive costs to bring fibre to small towns, Van der Merwe said.
“The input costs of all fibre operators are increasing and our ability to increase pricing allow us to continue investing in fibre and bring this amazing technology to the rest of the country,” he said.