The Internet Service Providers’ Association (Ispa) has warned that fibre network operators in South Africa shouldn’t assume customers want to receive free speed upgrades and should give them the option of paying less to keep their line speed unchanged.
The association, which represents many of South Africa’s ISPs, said on Monday that although speed upgrades are good news for most consumers, network operators “should not assume forced upgrades make sense for everyone”.
“In today’s challenging economic climate, not all consumers want (or need) a faster service. Some consumers would prefer to experience the same speed service they previously enjoyed and to simply pay less for it,” Ispa said in a statement.
“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 that has taken decades to construct,” it said.
“A healthy and competitive market is beneficial for consumers as market players compete on price and features, trying to offer consumers the best value. Fibre network operators might claim the upgrades are free. However, it can be argued that this is effectively eroding away ISP competition and margins. This could be a path to fostering an environment where vertically integrated fibre network operators and ISPs cooperate to push out the competition.”
A “free upgrade” is not always free to the customer or the ISP, Ispa added. “For some consumers, an upgrade means replacing existing equipment with higher-performing equipment that can support the faster speed.”
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The impact of forced upgrades is significantly higher on smaller ISPs, the association said. This is because of their “often-limited budget and capacity in provisioning their network for the increased capacity, support and operations for such upgrades”.
Consumers should be given the choice of getting more for the same price, or paying less for the same service, Ispa said. – © 2023 NewsCentral Media