Johannesburg, 05 Jun 2006
Telkom is seeking approval for price decreases across selected services from the Independent Communications Authority of SA (ICASA), which could see ADSL monthly connection fees drop by an average of 24%.
This means potentially that the DSL 512 service, which costs R477 in connection fees per month, would be reduced to about R360. However, while it is understood that 24% is the average reduction applied for by Telkom for its ADSL services, the company indicates that certain services could be reduced by as much as 32%.
"Telkom customers are set to benefit from overall price reductions from August this year, if price changes filed by the telecommunications giant are approved by ICASA," says the company in a JSE statement, following the announcement of its annual results.
Telkom has also filed requests for long-distance and international call tariffs to decrease by about 10%, although local call charges are to remain unchanged.
'It`s about time`
MyADSL founder Rudolph Muller says the ADSL reductions are long overdue. "It will effectively be a full year since the last reductions - since then the [ADSL] user base has doubled."
broadband pricing came under the spotlight two weeks ago at the ICASA hearings into ADSL billing structures. However, Muller says the proposed decreases announced this morning are a result of "constant pressure" to reduce prices, not merely the ADSL hearings.
During the hearings, Telkom argued against the scrapping of monthly connection fees, saying such a move would vastly increase the initial installation price.
In a media statement, Lulu Letlape, Telkom communications executive, says ADSL adoption in the small and medium enterprise market increased by 146% over the past 12 months - from 58 000 to 143 000 services.
"Telkom has a focused roll-out strategy to achieve ADSL penetration of 15% to 20% of fixed access lines by 2010," she adds.
Cosmetic changes?
Arthur Goldstuck, MD of research house World Wide Worx, comments: "Although the reductions in the cost of ADSL are very welcome, when looked at in the context of the overall basket, the fact that local calls have remained unchanged means that all other price reductions are really just cosmetic."
He notes that South Africans should expect to see more of these kinds of reductions in the future, as the cost of ADSL is forced to approach the cost of dial-up connectivity.
"Eventually broadband access must replace dial-up, not be an alternative - and the only way for this to happen is for prices to become comparable."
ICASA was unable to comment at the time of publication on when its response to Telkom`s application will be announced.
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