South Africa’s telecoms sector has a stock excuse it reaches for whenever a powerful player wants to do something anticompetitive, and it never seems to wear out: we’re doing this for the underserved communities.
By Paul Colmer, Executive Member, Wireless Access Providers’ Association (WAPA)
Vodacom used it to justify its bid for fibre operator Maziv. Now Openserve, the country’s biggest fibre network operator, has reached for the same line to explain why it has quietly launched its own retail ISP inside the wholesale business that many other South African ISPs depend on.
On 10 July, Openserve told its wholesale partners by email, three days before the rest of the industry found out, that Openserve ISP was open for business. Chief Commercial Officer Makgosi Mabaso framed the launch as part of a drive to grow fibre adoption and bring connectivity to underserved communities.
It’s a nice line. It also doesn’t survive five minutes with even the smallest bit of scrutiny.
Numbers don’t lie
Openserve ISP sells eight fibre packages. Two of them, priced at R345 and R425 a month and restricted to lower-income areas, are the ones doing the “underserved communities” work. The other six start at R499 and run to R1 449 a month for a 500Mbps uncapped line, hardly the profile of a household the industry considers digitally excluded.
Every package, top to bottom, comes with no installation fee, a free router, and a R250 Netflix voucher for new sign-ups. If reaching poorer households were genuinely the point, the freebies would sit on the R345 product, not the R1 449 one. They don’t.
Two-eighths of this portfolio is aimed at people who need the help. The other six-eighths is a straightforward push at the top of the retail market, wearing the two-eighths as camouflage.
We have watched this play before, and I mean that literally. I wrote at the time that Vodacom’s promise to “connect the unconnected” through its Maziv bid was PR dressed up as public interest, because fibre simply doesn’t add up commercially in sparsely populated areas.
In fairness, the Competition Appeal Court went on to approve that deal in August 2025 once the Competition Commission withdrew its opposition. Politics, as always, trumps policy.
But the underlying pattern still holds: two very different companies reached for exactly the same “underserved communities” justification for two very different, but equally self-interested, moves. In both cases, the claim did more marketing work than the actual product range could support.
Here is where Openserve’s version is far worse, though. Vodacom at least had to buy its way into somebody else’s open-access network, and endure three years of regulatory scrutiny and behavioural conditions to do it. Openserve doesn’t need to buy anything.
It already sets the wholesale price every ISP pays. It already processes every ISP’s orders, holds their customer and fault data, and controls the provisioning queue. It has simply switched on a retail front door inside the same building that decides how quickly everyone else’s faults get fixed.
Ask any ISP or WISP what happens when there’s a capacity problem and Openserve has to choose whose line gets prioritised, its own customers or its wholesale partners’, and you’ll get the same uneasy answer: nobody knows, and that is precisely the problem.
A dangerous precedent
There is precedent for closed networks in South Africa. Herotel sells directly to consumers and always has. MetroFibre runs open access and a direct retail arm side by side.
Neither has faced a court case for it. But both built that model at a fraction of Openserve’s scale, and neither is also the referee, timekeeper and pitch owner for a market of independent ISPs who built their businesses on wholesale access to that same network.
That distinction matters. It is the entire reason Openserve exists as a separate company in the first place.
Telkom was fined R200 million by the Competition Commission back in 2013 for exactly this kind of margin squeeze, and Openserve was carved out as a standalone legal entity in 2023 specifically to put regulatory daylight between the network and the retail business. This move puts the two right back in the same room, just with a different logo on the door.
Whatever the legal technicalities turn out to be, this is a bad deal for the industry, and a particularly bad one for the small ISPs and WISPs who spent years marketing Openserve’s network, absorbing bad debt from non-paying customers, and building the subscriber base on margins so thin that some operators clear barely R50 a client a month. They made this network worth owning.
ICASA and the Competition Commission should be asking hard questions now, while there is still an ecosystem left to protect, not in five years’ time when the damage is already done.