Municipality defends sole fibre network provider despite price hikes

The Saldanha Bay Municipality (SBM) has defended giving one fibre network operator (FNO) the sole mandate to roll out fibre infrastructure in its area of governance.

That is despite the operator, Zoom Fibre, announcing forced upgrades and substantial price increases from June 2025.

In recent months, MyBroadband has been contacted by the Internet service providers (ISPs) that resell Zoom Fibre’s products and several of their fibre-to-the-home (FTTH) customers.

They wrote in to report that Zoom Fibre was planning to scrap its three most affordable lines, which are typically priced under R500 from major ISPs.

Existing customers on these packages were initially set to be force-upgraded to Zoom Fibre’s 50Mbps line.

That would lead to most of these users paying hundreds of rands more per month, despite many opting for the entry-level products precisely because of lower pricing.

While Zoom Fibre has provided limited feedback, it has not explained why the drastic changes were necessary.

It has also remained quiet about rumours regarding its operational and financial issues, which have allegedly led to dozens of retrenchments in recent weeks.

On several occasions, MyBroadband also asked the municipality for feedback on the impact of Zoom Fibre’s changes on its residents.

It failed to respond to our queries for more than a month, before eventually publishing a statement on its website on 14 May 2025.

The municipality said that “recent articles and social media posts” about its fibre rollout — dubbed the Baobab Smart City project — contained “inaccuracies and misinformation”.

“Saldanha Bay Municipality aims to provide clarity and offer a factual perspective for better understanding,” it stated, without directly addressing the alleged misinformation.

After delving into the details of the project’s history, SBM asserted that the open-access fibre project was successful at providing reliable Internet connectivity to residents and businesses.

“At the start of the SBM Baobab Project, the broadband penetration in the SBM was estimated to be 12% versus the current estimated 80% broadband penetration today, well above the national South African average,” SBM said.

The municipality also explained that Zoom Fibre was the only FNO that fit the criteria for the contract.

“Zoom was the only bid that complied with delivering fibre connectivity to every household and neighbourhood in the municipality across all Living Standard Measures (LSMs),” SBM said.

“This bold approach directly advanced SBM’s broader objective of bridging the digital divide and ensuring equitable access to digital services.”

The municipality also said that the pricing of Zoom Fibre’s packages with speeds of 50Mbps and 100Mbps compares well with those of other FNOs.

In a limited comparison of 18 packages, it stacked the prices of Zoom Fibre’s 50Mbps and 100Mbps products from three unnamed ISPs on three unnamed FNOs with prices from five unnamed ISPs on Zoom Fibre.

It should be noted that dozens of ISPs sell packages from numerous major FNOs in the country. Therefore, there are hundreds of possible 50Mbps FTTH packages on the market.

While SBM also calculated the average prices of 50Mbps and 100Mbps packages from “other FNOs” and compared them with Zoom Fibre’s, it did not list these FNOs or the ISPs used for that calculation either.

Zoom Fibre only follows industry trends — Municipality

However, the issue at hand was not Zoom Fibre’s competitiveness in 50Mbps and 100Mbps products — it is the scrapping of its 15Mbps and 20Mbps products.

The municipality said that although it was sympathetic to the needs of local residents and businesses, broader national and local fibre market trends fell outside its direct control or influence.

It seemed to defend Zoom Fibre’s decision as part of a larger trend in the FTTH market. 

“FNOs have begun to limit the types of speeds and packages offered in the market, with the first implementations occurring in the first quarter of this calendar year,” SBM said.

It is true that several other major FNOs have simplified their offerings and largely moved away from products with speeds below 50Mbps in recent years.

However, all other operators did so gradually over several years and did not suddenly alter their line-ups in 2025, as implied by the municipality.

Their price hikes have also been much lower than what Zoom Fibre is implementing.

Gradual increases vs sudden hikes

FNOs like Vumatel, Openserve, MetroFibre, and Openserve initially made their upgrades free or only implemented marginal increases with their changes, despite drastically increasing speeds.

On an annual basis, the new prices of these packages have increased by far less than what Zoom Fibre’s entry-level packages will from June 2025. 

A good example is Telkom’s Openserve, which offered an entry-level 25/10Mbps line until March 2023.

This was upgraded to 40/20Mbps in April 2023 with a wholesale price hike. As a result, Afrihost’s price for this package increased from R497 to R547.

In September 2023, Openserve again upgraded the line speeds to 50/25Mbps, this time without wholesale price increases.

Following Openserve’s latest price adjustments in April 2025, the package costs R647 per month.

That is an increase of 30.2% from the product’s R497 price between April 2022 and March 2023.

Instead of steadily increasing users’ speeds, Zoom Fibre plans to remove its three entry-level packages and implement heavy and sudden increases.

A user on its entry-level 15/15Mbps package on Afrihost is currently paying R267 per month.

Under Zoom Fibre’s original plan, they would have been forced to upgrade to 50/50Mbps at a new price of R697, which is a 161% price hike.

Following the negative attention, Zoom Fibre announced that it will retain its 30/30Mbps package for existing customers.

Those on the 15/15Mbps and 20/20Mbps lines will be upgraded to this package instead of the 50Mbps product.

However, customers on the 15Mbps package will still pay around R200 more per month, which is likely well over 40% more than their current fee.

These increases are out of line with market trends, especially among the biggest FNOs in the country.