The risk of “stupid money” and government dictating broadband prices

Cybersmart CEO Laurie Fialkov has warned against government involvement in telecommunications pricing in South Africa.

Cybersmart has been one of the pioneers in rolling out fibre-to-the-home and fibre-to-the-business services across the country.

A lot of money is needed to build a new fibre network, and receiving adequate funding is therefore important to be a relevant player in the FTTH and FTTB market.

Fialkov also warned against “stupid money” in the industry.

“Massive funding being injected into a company with no business plan whatsoever, with the express purpose of buying market share, can destroy the margins which are needed to create a sustainable fibre businesses,” he said.

Fialkov added that government involvement in determining pricing in the telecommunications industry is a nightmare.

“I understand the #DataMustFall campaign, and to a certain extent agree with it, but unless there is a monopoly preventing lower prices, market forces should determine the price,” he said.

He is also against the nationalisation of telecommunications assets, especially under the pretence that communications services are a constitutional right.

Fialkov said political uncertainty in the telecommunications market is currently an issue which keeps him, and many of his peers, awake at night.

Now read: How Vodacom and MTN can lose their cellular spectrum

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The risk of “stupid money” and government dictating broadband prices