Fibre network operator Frogfoot is charging Internet service providers (ISPs) a R750 fee if their fibre-to-the-home (FTTH) customers on its network want to downgrade their speeds.
MyBroadband learnt of the charge after receiving an email from an FTTH customer of Limpopo-based ISP Capricom Networks.
The email explained there were changes to the customer’s line speed and monthly fees due to Frogfoot increasing the speeds and wholesale pricing on most of its FTTH products.
In this customer’s case, he had been paying R599 for Frogfoot’s 30/3Mbps FTTH product.
Following Frogfoot’s changes, Capricom migrated him to the network’s new entry-level 40/10Mbps package, priced at R700 per month.
That means his new package is R101 — or about 17% — more expensive.
He cannot downgrade to a slower speed as this is the new entry-level product.
But the customer also pointed out that customers on higher-end packages who wished to downgrade would face a hefty penalty fee.
According to the ISP, Frogfoot levied a R750 fee for any downgrades. In the case of Capricom, it recovered this fee from customers.
To illustrate the financial implications this might have, you can look at its effect on a customer with the 30/30Mbps package who was migrated to 40/40Mbps.
This customer’s monthly fee will increase from R650 to R800 per month, an increase of R150 — or roughly 23%.
Even if the customer decided to downgrade to the entry-level 40/10Mbps package, they would pay R50 more per month than on their previous 30/30Mbps product.
Downgrading to 40/10Mbps would save them R100 per month compared to the 40/40Mbps package’s price.
Therefore, it would take just over seven months to recover the cost of the downgrade fee.
Penalties only apply to downgrades
Frogfoot chief product officer David Coleman confirmed to MyBroadband that they levy an additional service charge on ISPs when a customer’s connection needed to be downgraded.
In the case of upgrades, however, it does not charge anything over and above the new cost of the package.
Coleman said that changing speeds and other services require changing the terminal equipment setup deployed at the premises and some administration on Frogfoot’s portals, which might result in some downtime.
Coleman also said Frogfoot’s wholesale pricing increases were no higher than the inflation rate.
Since Frogfoot’s last price changes occurred in May 2021, the overall inflation was roughly 10.7%.
In the case of Capricom, the price increases appear to be substantially higher than this, particularly on the entry-level packages.
While major ISP Afrihost decided to absorb the increases, considering the thin margins these companies run on, many other smaller providers will likely follow Capricom’s approach.
It is also worth noting that Frogfoot charges a R1,725 fee for changing ISPs. Although this is not unique to Frogfoot, its migration fee has always been on the high side compared to other fibre network operators.