Why fibre networks are increasing prices and line speeds in South Africa

South African fibre network operators have implemented forced speed upgrades and price increases because their costs have increased substantially in recent years.

This was the feedback from industry heavyweights during a ZANOG@iWeek panel discussion on the future of fibre earlier this year.

Forced speed upgrades are a way to offer subscribers some value in exchange for a price increase rather than simply hiking fees and offering nothing in return.

Link Africa chief sales and marketing officer Mark O’Donoghue said their two biggest cost increases were caused by load-shedding and physical security.

O’Donoghue said they were spending up to R1 million per month for armed security for staff, primarily in KwaZulu-Natal.

Much of this cost was driven by extortion gangs, known euphemistically as “business forums”, who demand that companies hire their members to perform 30% or more of construction work in their areas.

“You have to hire their security companies to look after their staff that you are forced to employ,” said O’Donoghue. “We are constantly being pressurised and paying for things that, quite frankly, we shouldn’t be paying for.”

“We shouldn’t have to invest so much in generators and batteries. We should not have to pay armed security for staff to fix a fibre in a remote area.”

Regarding offering speed increases rather than pure price hikes, O’Donoghue said fibre provides a huge amount of bandwidth, allowing fibre network operators (FNOs) to offer more value when they increase prices.

Source My Broadband READ MORE