Call to end South Africa’s fibre downgrade fees

A major South African fibre Internet service provider (ISP) believes that fibre network operators (FNOs) should put an end to charging customers for downgrading their lines.

Over the past few years, many of the country’s biggest FNOs have automatically upgraded fibre-to-the-home (FTTH) customers to packages with faster speeds, sometimes at an additional monthly cost.

The Internet Service Providers Association of South Africa (ISPA) and many customers have complained about this practice.

They argue that customers often don’t require the additional speed and have limited budgets for home Internet.

“In today’s challenging economic climate, not all consumers want (or need) a faster service,” ISPA said.

“Some consumers would prefer to experience the same speed service they previously enjoyed and to simply pay less for it.”

Some customers also learnt that downgrading to a lower-end package to pay a lower price could trigger a downgrade fee.

Cool Ideas product manager Robin Roux explained while ISPs often get blamed for downgrade fees, they are only passing on costs charged by the FNOs.

“We generally push back where possible on these fees as we don’t like charging them,” Roux told MyBroadband. “Customers generally assume it’s some penalty clause we have implemented ourselves.”

Roux said Cool Ideas found some of the downgrade fees to be incredibly exorbitant, making it impractical to absorb them.

Roux could not speculate on the purpose of the downgrade fees but said Cool Ideas would love to see an industry free of downgrade fees, regardless of how small they might be.

“We feel it’s detrimental to the idea of a month-to-month service, and in the end, the ISP always seems to lose with these fees, no matter how upfront we are about them to customers,” Roux said.

Two major FNOs charging downgrade fees

Cool Ideas does not charge downgrade fees to customers on any of the four biggest open-access FNOs — Frogfoot, MetroFibre, Openserve, or Vumatel.

“When there is a downgrade fee — regardless of FNO — and we don’t absorb it,  we make an effort to add no additional cost (other than VAT) to said downgrade fee,” Roux said.

Another major ISP, Webafrica, told MyBroadband that it also does not charge a specific downgrade fee for FTTH packages.

Webafrica said Openserve was the only FNO among the big operators that always charged ISPs if their customers wanted to downgrade.

Openserve previously told MyBroadband it charged a “nominal” fee for downgrades but would not share the specific amount.

Vumatel occasionally does so based on volumes on a particular package.

Roux said this typically happened when a certain percentage of an ISP’s customer base downgraded, usually to the entry-level package.

Vumatel also implemented a R500 downgrade penalty for ISPs participating in an optional incentive campaign, for which it would reward ISPs with R500 for every customer that upgraded to a higher-end plan.

While participation was optional, Vumatel was accused of dodgy behaviour because it made a temporary promotional speed increase permanent a month after the incentive programme kicked off.

This made it more difficult for ISPs to upsell customers while also punishing them if their customers wanted to downgrade after the speed increase.

Frogfoot previously considered implementing a R750 cancellation fee but withdrew this after MyBroadband reported on customers complaining about the charge.

Another major FNO that previously told MyBroadband it did not implement downgrade fees was Evotel.

The biggest closed-access fibre network in South Africa — Herotel — told MyBroadband it does not charge any downgrade fees either.

“We do not believe in penalising our customers or having any penalty clauses for downgrading, customers should have the freedom to choose the product that they want when they want it,” Herotel said.

In Herotel’s case, it is both the FNO and ISP, so there would be no misunderstanding about who is levying the downgrade fee.

“We prioritise customer satisfaction and strive to offer transparent and fair policies that align with our commitment to providing high-quality services,” Herotel said.

Herotel also said it does not trap customers with contracts that penalise them for cancelling.

“They are free to leave whenever it suits them,” the company said.

MyBroadband also asked Afrihost, MWEB, and RSAWeb for their policies on FTTH downgrades, but they had not responded by the time of publication.