The cost of home fibre in SA may drop up to R200 per month thanks to a Telkom settlement

Source: Business Insider SA, 15/04/2020

Just how much individuals save will depend on the rand amount
Telkom implements.
South African home users of fibre optic internet connections may
soon be paying between R100 and R200 less every month for that
service after Telkom agreed to cut the prices it charges internet
service providers (ISPs), a technology analyst said.

But just how much individuals save will depend on the rand amount
decrease Telkom implements for its wholesale customers, including
major ISPs such as Afrihost, Axxess, and MWeb.

Telkom owns the largest fibre optic network in the country. On
Tuesday it and the Competition Commission announced an agreement
for a “substantial reduction” in the rates it asks ISPs.

The agreement comes after the Competition Commission’s data
services market inquiry report published in December, which has
also forced Vodacom and MTN to drop data prices. The report found
that Telkom’s Openserve unit charged “excessive pricing” for ISPs
to use its wholesale and ADSL network.

Technology research company World Wide Worx`s Arthur Goldstuck
said consumers can expect monthly savings on their ADSL and fibre
bills which can range between R100 and R200, but there is some
uncertainty on exactly how much end users will save.

“Internet providers also often absorbed the high prices Telkom
charged to help minimise the effect to consumers,` he said.

The Competition Commission kept the exact amount Telkom charged
ISPs confidential.

Goldstuck said he has seen instances where Telkom charged up to
R135 per MB/s, compared to competitors who charged below R10 per
MB/s.

“A couple of years ago Telkom was able to charge excessive fees
for ISPs to use its copper network for ADSL, but this was
basically killed off due to the limitations of copper and copper
theft,” Goldstuck told Business Insider South Africa.

“We thought with the arrival of fibre we’d be freed of Telkom’s
monopoly, but Telkom managed to develop the vastest fibre network
in South Africa which forces ISP to still use it to reach
consumers.”

That meant Telkom was still able to over-charge ISPs, he said.

The Competition Commissions’ Tembinkosi Bonakele said the
agreement with Telkom will lead to lower prices for consumers,
especially to small businesses who are increasingly reliant on
fibre networks.