More for the same price isn’t always a bargain in the longer run
The Internet Service Providers’ Association of South Africa (ISPA) has warned network operators not to ‘force’ fibre upgrades on consumers. In a statement, the ISPA said that adverts offering “more for the same price” are good news for most consumers, but upgrades don’t make sense for everyone.
The ISPA represent the interests of more than 220 ISPs. The crux of the matter is, as its statement explains, “Oftentimes, the faster [fibre] service comes at the cost of margins ISPs operate on. [Fibre network operators] can, therefore, directly influence the financial viability of ISPs and the competitive market which has taken decades to construct.”
The argument is that while fibre network providers might claim the upgrades are free, they often erode ISPs’ margins and ultimately vertically integrated fibre network operators and ISPs could put competitors out of business.
No going back
“Many ISPs create and offer cost-effective services for consumers on a limited budget, and it is often those consumers who are casualties of forced service upgrades. A ‘free upgrade’ is not always free to the customer, or the ISP. For some consumers, an upgrade means replacing existing equipment with higher performing equipment that can support the faster speed.
“This upgrade could entail a site visit, equipment cost and provisioning downtime. Worse, if a customer isn’t happy with the automatic upgrade, and wants to downgrade back to the same speed as before, many [fibre network operators] will charge a fee because the customer has (in their view) now downgraded to a slower service. This practice is unfair and hurts those consumers who are already under financial pressure,” it continues in the statement.
Pay less for the same option
ISPA believes that competition fosters an environment where consumers obtain better value and that consumers should always have the right to choose between getting more for the same price, or paying less for the same service.
“While internet access has become a necessity for everyone and is no longer a luxury, many consumers would still welcome the chance to pay less for a service they have.
“Due to high mobile data prices, consumers are often forced to use fixed access last mile services like FTTH or ADSL. Should mobile prices drop to similar levels to that of emerging markets like India, consumers could pay around R3.20 [€0.16] per GB. This could make mobile data a competitive and viable alternative for consumers.”