News / National
South African fiber providers are gradually forming local monopolies
25 Oct 2024 at 14:27hrs | Views
The South African fiber internet market, once praised for its Open Access model, is now seeing a rise in monopolistic practices by Fibre Network Operators (FNOs) that control neighbourhoods, estates, and business parks. In 80% of cases, FNOs act as the sole provider in a given area, limiting consumer choice and raising concerns about anti-competitive behavior.
A recent study by the Internet Service Providers' Association (ISPA) highlighted that consumers often have no choice of FNO, with many estates locked into exclusive contracts with a single provider. Originally dynamic and highly competitive, the FNO market is increasingly closed to competition. This shift has been attributed to high entry costs and reluctance among operators to invest in areas where another FNO has established infrastructure. These barriers have left consumers facing stagnant service standards and outdated speeds - South Africa's networks are capped at 1Gbps while countries like the UK now offer 2Gbps speeds.
The ISPA also reports that service standards have dropped, citing obstacles faced by ISPs trying to switch customers between networks. Some FNOs charge exorbitant fees for ISP access, while others impose fees simply to change the name associated with a line, leaving customers in complex estates with little leverage if quality falls short.
To address these challenges, the ISPA has called on Communications Minister Solly Malatsi to amend laws allowing for more competitive practices and service choices. Legislation outlined in the 2016 National Integrated ICT Policy White Paper offers a framework to protect consumers' rights to choose their ISP, though enforcement remains limited. The ISPA's new initiatives, including its Fibre Network Operator Perception Survey, aim to establish standards and promote a healthier, more competitive fiber industry.
Ultimately, consumers can submit complaints to the Competition Commission, but as legal recourse remains financially prohibitive, sustained advocacy from consumer groups may be necessary to achieve meaningful reform.
A recent study by the Internet Service Providers' Association (ISPA) highlighted that consumers often have no choice of FNO, with many estates locked into exclusive contracts with a single provider. Originally dynamic and highly competitive, the FNO market is increasingly closed to competition. This shift has been attributed to high entry costs and reluctance among operators to invest in areas where another FNO has established infrastructure. These barriers have left consumers facing stagnant service standards and outdated speeds - South Africa's networks are capped at 1Gbps while countries like the UK now offer 2Gbps speeds.
The ISPA also reports that service standards have dropped, citing obstacles faced by ISPs trying to switch customers between networks. Some FNOs charge exorbitant fees for ISP access, while others impose fees simply to change the name associated with a line, leaving customers in complex estates with little leverage if quality falls short.
To address these challenges, the ISPA has called on Communications Minister Solly Malatsi to amend laws allowing for more competitive practices and service choices. Legislation outlined in the 2016 National Integrated ICT Policy White Paper offers a framework to protect consumers' rights to choose their ISP, though enforcement remains limited. The ISPA's new initiatives, including its Fibre Network Operator Perception Survey, aim to establish standards and promote a healthier, more competitive fiber industry.
Ultimately, consumers can submit complaints to the Competition Commission, but as legal recourse remains financially prohibitive, sustained advocacy from consumer groups may be necessary to achieve meaningful reform.
Source - online
