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Telkom`s ADSL price cuts 'misleading`


Johannesburg, 12 Jun 2006

Telkom`s announcement regarding the price cuts on its ADSL services is misleading, says MyADSL.

Rudolph Muller, founder of MyADSL, says it gives consumers the impression the total cost of ADSL was reduced by 24%, when the effective price cut on the full ADSL service is actually around 12%.

Muller was commenting on the price reductions, which include broadband and international call rates, that Telkom announced last week, in conjunction with its annual results. The reductions are expected to take effect in August, pending approval by the Independent Communications Authority of SA (ICASA).

Muller says while the price for ADSL access will decrease by an average of 24% in August, both the line rental portion and installation charges for this service will increase, eating into the savings.

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A Telkom spokesperson argues that MyADSL is mixing products that are dealt with separately.

ADSL and line rental are separate products, and their prices are dealt with and filed for approval by ICASA separately, she says. Telkom`s message on ADSL price cuts, therefore, spoke directly to that product, excluding associated costs such as line rental and charges from the Internet service provider, she adds.

Muller also contradicts Telkom`s comments regarding its wholesale ADSL services.

At the recent public hearings held by ICASA on ADSL prices, John Joseph, managing executive for Telkom Wholesale Services, informed the panel that the cost of ADSL has declined every year since its launch in 2002, Muller notes. The first ADSL reduction actually took place in February 2005, the third year after its launch, he says.

"It is regrettable that Telkom spreads misleading or false information in the sensitive area of broadband pricing, as this can seriously damage any study about the status of SA`s fixed-line broadband market," says Muller.

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