New era for Openserve

Telkom’s wholesale fixed-line division, Openserve, has assured that its own Internet service provider (ISP) business will be treated on the same terms as third-party ISPs.

Openserve recently notified its partner ISPs that it had launched its own fibre retail business to sell services directly to end users.

As with most large fibre network operators in South Africa, Openserve has operated exclusively on an open-access basis.

While it builds and maintains its fibre network and supporting hardware, it only sells lines at wholesale prices to ISPs.

These companies resell the lines to end-users and handle the service’s billing and customer support components.

Openserve launching its own ISP may evoke painful memories among those familiar with the Telkom of yesteryear, which had garnered a reputation for abusing its fixed-line monopoly.

From the late 1990s to early 2000s, Telkom dominated fixed-line Internet services in South Africa, often to the detriment of private ISPs and consumers.

It owned and controlled the vast copper-based networks that supported telephonic services, as well as dial-up and digital subscriber line (DSL) Internet.

While it resold some of its products through third-party ISPs, it was frequently accused of giving preference to its own retail division.

Following many years of complaints and lobbying, the Competition Tribunal forced Telkom to separate its infrastructure and retail businesses, leading to the establishment of Openserve in 2015.

The company gradually decommissioned its copper network and replaced it with fibre optic cabling. In its last financial results, it revealed it had passed over 1.5 million homes with fibre.

Over 200 ISPs are reselling Openserve’s packages, giving consumers a wide range of choice in pricing and support.

In stark contrast to Telkom’s reputation during its monopolistic years, Openserve has developed a good name among ISPs for, among other things, its reliability and adherence to open access principles.

ISPs’ perception of fibre network operators (FNOs) is regularly gauged by the Internet Service Providers’ Association, the official Internet industry representative body in South Africa.

Openserve came second in its latest survey, behind Octotel. Third place went to MetroFibre Networx. After that, there was a substantial gap in perception scores to the next fibre provider on the ranking.

When it came to what ISPs thought the overall strengths and weaknesses of South African FNOs were, they remained: reliability, staff friendliness, technical proficiency, and adherence to open access.

Many industry players are likely concerned that an ISP operating within Openserve could exploit its proximity to the FNO to offer better pricing and services than third parties.

Openserve’s ISP currently offers eight packages, which MyBroadband compared with major third-party ISPs in the table below. We’ve highlighted the most affordable options for each package in green.

Dealing on equal terms

In response to questions from MyBroadband, Openserve disputed allegations that it would give its own ISP preferential network access or terms.

It insisted that the Openserve ISP acquired network access on the same published wholesale terms available to all ISPs.

That meant its ISP would get access to the same products, the same pricing, provisioning processes, service level agreements (SLAs), and technical support.

“Orders, installations and fault resolution for Openserve ISP customers are handled through the same processes and against the same SLAs that apply to every ISP on the network,” the company said.

Openserve also said its own ISP would not have any separate queue or priority. “Every licensed ISP and wholesale customer continues to have equal access to the Openserve network,” it said.

“ISPs’ existing agreements, onboarding processes and commercial terms are unaffected by the launch,” the company said, adding that the wholesale business model remained the foundation of its strategy.

“Openserve continues to invest in expanding coverage, improving network resilience and enhancing service quality across South Africa.”

“Openserve’s wholesale partners have been instrumental in growing South Africa’s broadband market and remain central to its future.”

It also explained that Telkom’s retail Internet business would continue to sell Openserve’s fibre packages separately.

“The launch of Openserve ISP does not change the group’s brand structure, and wholesale products, pricing and commercial terms continue unchanged for all Openserve customers,” it said.

“Openserve ISP is an additional retail route to market over the network, not a replacement for the partner ecosystem.”

Openserve said its ISP aimed to accelerate broadband adoption, expand digital inclusion, and make it easier for more South Africans to participate in the digital economy.

“While fibre has passed millions of homes and businesses, many remain unconnected,” the company said.

“Openserve can improve utilisation of existing infrastructure, support continued investment in the national network and extend the benefits of connectivity to more South Africans.

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