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

Business Insider SA
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  • Telkom reached an agreement with the Competition Commission to cut the prices it charges internet service providers (ISPs) to use its network. 
  • One technology analyst believes SA consumers can expect price cuts of between R100 to R200 on their monthly home-fibre bills as a result.
  • Just how much individuals save will depend on the rand amount Telkom implements.
  • For more stories, go to Business Insider's home page.

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.

See also: Here's how much you'll save after another steep rate cut – and how you can make it work harder

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.

See also: Gold now costs R1 million a kilogram - and could climb even higher

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