Business fibre offers benefits over consumer fibre services, but the benefits do not justify the significant premium companies are forced to pay.
Many Internet service providers (ISPs) offer business fibre, which is significantly more expensive than consumer products.
Depending on your ISP, a 100Mbps business fibre connection costs anywhere between R4,000 and R10,000.
WonderNet, for example, charges R8,049 per month for a 100Mbps business fibre service. A consumer service using the same fibre network operator (FNO) costs R899 per month.
To install a new business fibre service takes weeks, and there is an R6,325 charge for installation and activation.
The consumer option, in comparison, takes days to install, and there are no installation and activation fees.
Business fibre is only available on long-term contracts, while consumer services are available month-to-month.
The table below shows the difference between business and consumer fibre from WonderNet from the same fibre network operator.
| Consumer Fibre versus Business Fibre | ||
| Measure | Consumer fibre | Business fibre |
| Installation time | Days | Weeks |
| Contract | Month-to-month | 24 months |
| Installation and activation fees | R0 (free) | R6,325 |
| Monthly price | R899 | R8,049 |
What makes business fibre better?
Business fibre is more expensive than a consumer service, it takes longer to install, and you are forced to sign a long-term contract.
It raises the question of what business fibre offers a company that it cannot get from a consumer product.
MyBroadband asked ISP executives for feedback, and they said the biggest differentiators between business fibre and consumer fibre are service-level agreements (SLA) and network quality.
SLAs give business fibre subscribers guarantees of support availability and repair and response times, where credits are given to customers when these targets are not met.
Business fibre also guarantees network redundancies and congestion ratios to ensure good network quality.
Consumer products, in comparison, are best-effort services. There are no service-level agreements or congestion ratio guarantees.
But does it really matter?
Business fibre sounds like a vastly superior product on paper, but delving deeper into business fibre agreements and network quality raises concerns.
MyBroadband looked at the SLA for business fibre from a prominent ISP, and what it offers is not significantly different from a consumer service.
Support is only available for 14 hours per day during weekdays — and less than half that over weekends. It is worse than consumer support from some ISPs.
The much-touted SLA is also a let-down. Instead of providing a company with peace of mind and guarantees, the contract indemnifies the ISP against legal action or claims.
A company that subscribes to business fibre is required to sign away its right to take action against the ISP for any losses, damages, liabilities, or whatever else.
What is particularly telling is that there is no mention of credits and claims in case of prolonged downtime.
In fact, the largest part of the contract is to ensure there is absolutely nothing a company can do if they experience downtime.
And then there is the promise of a better network experience with guaranteed contention rations.
The reality is that bandwidth has become so affordable that there are essentially no bottlenecks for fibre.
It means that the performance of a consumer fibre service will be similar to that of a business fibre service.
The repair times for business and consumer services are also not significantly different.
Openserve’s average time to repair a residential broadband service is approximately 27 hours, while business broadband services are typically restored within 18 hours.
The most material difference is that you generally cannot get a fixed IP address on a home service, which is available on most business packages.
Business fibre should also carry more protection from undersea cable outages, which comes at a premium as it requires redundant routes.
So, what should business fibre cost, considering the few benefits it offers over consumer fibre?
A prominent ISP executive told MyBroadband there should not be more than a 30% premium for business fibre.
He said a few hundred rands extra to be on business fibre would justify business fibre’s benefits over a consumer service.
Why companies buy business fibre
With the big difference in price between consumer and business fibre businesses, many companies will be happy with consumer fibre if they only want Internet connectivity.
However, this is not possible.
Office park landlords often grant exclusive rights to fibre network operators without considering or understanding their tenants’ requirements.
Companies in these office parks are forced to pay for business fibre, even if a more affordable consumer service will suit their needs.
The only way to address this problem is to ban exclusivity rights on fibre infrastructure. Such regulation will encourage competition and put price pressure on the fibre layer.
“Landlords who do not grant exclusivity will, in time, attract more tenants because they are not forced to buy products which they do not need,” an ISP executive said.
Fibre-to-the-business (FTTB) versus business fibre
It should be noted that this article focussed on business fibre which is used for Internet access, instead of fibre-to-the-business (FTTB).
FTTB is an entirely different service from fibre-to-the-home (FTTH).
FTTH is a layer 3 service only, while FTTB can be split into layer 1, layer 2, and layer 3 services. In simple terms:
- Layer 1 is a dark fibre service.
- Layer 2 allows you to connect branch offices, disaster recovery sites, metro rings, and cloud services such as AWS and Azure.
- Layer 3 is used for Internet and VPN services (this is a massive simplification but provides a very high-level explanation by way of example).
FTTB requires different backend infrastructure and equipment, which comes at a significantly higher price.
In the context of this article, many businesses in office parks are forced to pay for FTTB services when all they need is an FTTH service for Internet connectivity.
Competition between fibre network operators in office parks will resolve this problem and give businesses the option to subscribe to a service that suits their needs the best.
Source: MyBroadband
