Domain name price hikes in South Africa

All .za domains registration and annual renewal fees will increase by R10 on 1 April 2021.

This follows a resolution at a ZA Domain Name Authority (ZADNA) board meeting on 28 August 2020 to increase the wholesale fee of co.za, org.za, web.za, and net.za domain registrations.

The resolution will see the wholesale fee for .za domains increase from R45 to R55 per year.

ZADNA’s announcement of the pending wholesale price hikes follows public consultations regarding the matter.

South African hosting provider Xneelo has released its updated domain pricing for the year.

It highlighted the R10 price increase passed down by the ZA Central Registry (ZACR) and explained that its international registry partner, Tucows, has also been incrementally increasing prices for international domains.

“Since 2017, Xneelo has absorbed these price increases, despite exchange rate fluctuations,” the company said in an email to customers.

“Our revised pricing is based on fair market value and is competitive relative to the industry.”

Why .ZA domains are getting more expensive — the interplay between ZADNA, ZACR, and DNS

Some registrars and domain name owners registered objections to the proposed price increase, asking for greater transparency from the ZACR regarding how the additional funds will be used, and arguing that the ZACR should look into operational efficiency before asking for a price hike.

To understand the objections raised, it is necessary to understand the relationship between ZADNA, the ZACR, and its service provider Domain Name Services (Pty.) Ltd.

ZADNA is the statutory regulator and manager of the .ZA namespace. It currently charges the ZACR R12 per domain per year.

ZADNA increased its price from R7 to R12 per domain from 1 June 2016, causing a major dispute between itself and the ZACR.

Several industry players pointed out that ZADNA had provided commitments that it would not increase its fees until at least 2017, but ZADNA argued that the commitment did not extend to the fees it charges the ZACR, only the fees the ZACR charges to registrars.

ZADNA approved a wholesale EPP price increase from R35 to R45 per year on second-level .ZA domains (i.e. co.za, org.za, web.za, and net.za) in November 2014. It promised to avoid a fee increase for at least 3 years – unless drastic circumstances justified a change.

The dispute between ZADNA and the ZACR was resolved by a settlement agreement. Under the terms of the agreement, the ZACR now pays the increased fee of R12 per domain to ZADNA and it also agreed to back-pay a portion of the increased domain registrations fees to 1 June 2016.

The ZACR has therefore been charging a wholesale fee of R45 per year on domains for nearly six years, while the annual fees it pays ZADNA increased from R7 to R12 per domain.

Domain Name Services (Pty.) Ltd., also known as DNS, is a service provider to the ZACR that provides the technical systems for managing South Africa’s second-level .ZA domains, .capetown, .durban, .joburg, and .africa.

It stands to reason that a significant proportion of the annual domain renewal fees collected by the ZACR go to DNS for the technical services they provide.

Increase is essential for the sustainability of .ZA – ZADNA

When MyBroadband questioned ZADNA about the wholesale price increase last year, it said adjusting the prices was essential for the sustainability of the .ZA namespace.

“The Wholesale fee is vital for the .ZA domain namespace security and development thereof, as it is evident through the implementation of DNSSEC and now data escrow services which will ensure our ccTLD will be resilient,” ZADNA stated.

It also noted that it has not increased the fee for five years.

MyBroadand pointed out that ZADNA did increase its annual fees to the ZACR in 2016 by R5 per domain, and asked whether that increase wouldn’t naturally have led to a wholesale price increase anyway.

According to ZADNA, the fee increases have nothing to do with one another.

“A Registry Fee increase does not translate to a [Wholesale Fee increase] and it does not precede the EPP Wholesale fee, more so, the focus here should be on the EPP Wholesale Fee and the Authority’s pronouncement.”

Why does the ZACR need a wholesale fee increase?

“.ZA-managed domain name pricing has remained stagnant for the past 5 years due to a moratorium being in place from March 2015 until March 2019,” a spokesperson for the ZACR told MyBroadband.

“This directly impacted on the Registry’s ability to continue providing innovative, robust, resilient and secure registry services, as external factors like inflation and currency fluctuations are generally not sympathetic on any commercial entities’ operational capabilities.”

The ZACR stated that given the critical role that a domain name plays within the Internet value chain and the economy at large, it is important for ZACR to ensure that there is 100% uptime of registry services.

“This is an internationally benchmarked performance level and attracts operational costs, like any other business that wants to offer excellent service offerings.”

What the additional income from second-level .ZA domains will be used for

According to the DNS website, there are currently 1,313,438 second-level .ZA domains registered.

While ZADNA has increased its fee to the ZACR by R5 per domain per year, it has also approved a wholesale EPP price increase of R10 per domain.

This means that when you subtract the extra money going to ZADNA, the ZACR will generate an additional R6,567,190 per year. What will this money be used for?

“ZACR is a not-for-profit entity tasked with the management of critical domain name infrastructure, thus all of its funds are utilised towards ensuring that the Registry functions optimally,” the ZACR told MyBroadband.

“Apart from investing in critical registry infrastructure (hardware), building and maintaining a buffer to respond to disaster management and business continuity obligations timeously, the ZACR believes that it is extremely important to also contribute to the development of new and emerging channel partners (Accredited Registrars) so that they are better equipped to offer quality-driven domain name services.”

The ZACR said that it has supported industry-related programs like Basic and Advanced DNS Training and Coachlab initiatives in the past, but these suffered as a direct result of the moratorium on price increases being in place.

“ZACR would like to reinstate these enterprise development programmes as part of its efforts to transform the domain name sector.”

Now read: Why .ZA domains are getting more expensive