Openserve has mounted a defence of its resolution to launch its personal web service supplier, telling TechCentral that the Telkom-owned wholesale fibre operator is “nicely under the edge for dominance” in competitors legislation – and that the bundled offers ISPs warn they can not match can be found to each supplier on its community on the identical phrases.
The launch of Openserve ISP, which sells uncapped fibre on to shoppers from R345/month with a free Wi-Fi modem, free set up and no fixed-term contract, has rattled a few of the firm’s wholesale companions, with the Web Service Suppliers’ Affiliation saying it could elevate members’ issues with the competitors authorities.
In an in depth written response to questions from TechCentral, Openserve mentioned the brand new channel exists to attach houses its community already reaches. Openserve fibre passes roughly 1.5 million houses, it mentioned, but about half stay unconnected – “a determine that has confirmed persistent over time”. The ISP’s goal is “to convey the advantages of fibre connectivity to houses and communities which have remained unconnected, in help of broader digital inclusion in South Africa”.
Requested whether or not an equally environment friendly ISP shopping for Openserve’s wholesale inputs at rate-card costs might match the direct provide and nonetheless make a constructive margin, the corporate mentioned sure – and disputed the premise that the free modem and set up are retail subsidies.
“Free set up and free Wi-Fi-enabled ONTs (optical community terminals) are customary wholesale constructs obtainable to each ISP on the Openserve community via the Webstream product, on the identical revealed phrases,” it mentioned. “Openserve ISP acquires these inputs in precisely the identical manner, and on the identical revealed price card, as any third-party ISP … [and] a variety of ISPs already run comparable gives available in the market in the present day.”
‘Beneath the edge’
Openserve additionally mentioned its ISP “acquires traces, provisioning slots and restore providers on the identical revealed costs, phrases, methods and timescales as each third-party ISP”, and that it’s topic to the identical code of conduct governing the safety of ISPs’ confidential data. It didn’t, nevertheless, decide to the written equivalence and transfer-pricing undertakings, independently audited, that TechCentral requested about and that wholesale companions have demanded.
On the structural query – why a retail channel was launched contained in the wholesale entity moderately than via a separate group firm – Openserve mentioned its market share is about 21% of houses handed and 20% of houses related, with Telkom’s share of the ISP market “even much less”.
Learn: Openserve launches its personal ISP, rattling wholesale companions
“The Telkom group is nicely under the edge for dominance, which is ready at a minimal threshold of 35% by way of the Competitors Act,” it mentioned.
That’s the firm’s authorized protect in opposition to margin squeeze claims, which the Competitors Act lists among the many exclusionary acts of a dominant agency. However the act’s dominance check is extra nuanced than a easy 35% ground: part 7 supplies {that a} agency with lower than 35% of a market is nonetheless dominant if it has market energy. Critics are additionally prone to contest the market definition – for an ISP whose prospects sit on Openserve infrastructure, there is just one wholesale provider of these traces.
Openserve additional famous that its 2023 authorized separation from Telkom got here “a while after the settlement with the Competitors Fee had expired” – a reference to the 2013 settlement, which included a R200-million penalty and practical separation commitments over margin squeeze and exclusionary conduct, and which business gamers regard because the origin of Openserve’s separation logic.
Trade veterans stay unconvinced by assurances alone. “Openserve could promise that each buyer might be handled equally. In a market with this historical past, a promise shouldn’t be sufficient. Equality have to be auditable,” mentioned Mark Grey, CEO of Easttel, certainly one of South Africa’s oldest impartial web suppliers. “What we concern is the referee deciding to play striker whereas maintaining the whistle.”
Ispa has mentioned it’s canvassing members’ views and can elevate issues with Openserve’s administration or the competitors authorities “as acceptable”. — © 2026 NewsCentral Media
