A ‘free upgrade’ is not always free to the customer, the Internet Service Providers’ Association of SA has warned.
THE INTERNET Service Providers’ Association of SA (Ispa) has sounded caution around Fibre Network Operators (FNOs) forcing fibre upgrades on consumers, as it may come with a cost.
Ispa is an industry representative body representing the interests of more than 220 ISPs.
It said while upgrades advertising “more for the same price” was good news for most consumers, FNOs shouldn’t assume forced upgrades made 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 simply pay less for it.
“Often the faster FNO service comes at the cost of margins ISPs operate on. FNOs can, therefore, directly influence the financial viability of ISPs and the competitive market, which has taken decades to construct,” it said.
South Africans face onerous data costs and amid a cost-of-living crisis it forces people to choose between buying food or for example growing businesses online.
Expensive internet services widen the so-called “digital divide” between the world’s tech and internet haves and have nots, according to the United Nations, which says about half the global population falls into the latter group.
One gigabyte of mobile internet in South Africa cost on average $2.04 (R37.18) in 2022. According to Statistics SA, South Africa ranks 135 out of 233 countries worldwide from the cheapest to the most expensive mobile data. Out of 57 plans measured in South Africa, the lowest price observed was $0.07 per 1GB for a 30-day plan.
Ispa said a “free upgrade” was not always free to the customer or the ISP, as sometimes an upgrade means replacing existing equipment with higher performing equipment that could 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 FNOs 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 said.
Ispa said if an upgrade was going to be made automatically to any customer’s service, then there must be no charge levied if that customer did not want to take advantage of the forced upgrade and did not want to upgrade.
“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 that they have… Should mobile prices drop to similar levels to that of emerging markets like India, consumers could pay around R3.20/GB. This could make mobile data a competitive and viable alternative for consumers,” it said.
– BUSINESS REPORT
