Telkom confident of broadband targets

By Nicola Mawson for Telkom
Johannesburg, 04 Dec 2006

Telkom is confident of meeting its broadband targets and says by 2010, there will be between 15 and 20 ADSL lines for every 100 fixed-lines.

However, Telkom's fixed-line penetration rate has been falling since 2000, points out Rudolph Muller, broadband activist and MyADSL founder. "It's quite convenient to say a percentage of fixed-lines [when those figures are falling]."

Based on the company's latest figures, released in its interim results to end-September, Telkom had a total of 4.68 million fixed-lines. This was a reduction from the March figures of 4.7 million. By the end of September last year, the company had 4.73 million lines, indicating a year-on-year reduction of 1.2%.

However, Telkom has seen rapid growth in ADSL lines, with 190 172 ADSL subscribers by the end of September. This was a 99.6% growth in subscribers year-on-year. By the end of March this year, the company had 95 290 subscribers.

Penetration rates

Based on the company's latest figures, by the end of September, this penetration rate stood at 4.1%. At the end of March 2006, this figure was 3% and - by the end of September last year - it was 2%.

Muller says despite the introduction of ADSL in 2002, the company has seen a "drastic" reduction in fixed-line penetration. He argues that the advent of broadband should have the opposite effect.

Telkom was not immediately available for comment on this issue.

Lulu Letlape, group executive for corporate communication at the telecoms company, says Telkom aims to achieve an ADSL penetration of between 15% and 20% of fixed access lines by 2010, through introducing new service offerings.

But, Telkom's fixed-line penetration rate in the past year has fallen 2%, to 9.9%, by the end of September. In March, the company reported a fixed-line penetration rate of 10%, which was down from September 2005's figure of 10.1%

Telkom aims to increase penetration further through the "innovative bundling of broadband access and voice packages, such as launching WiMax, triple play, as well as providing interactive services such as video on demand, IPTV and voice over IP," says Letlape.

Not so sure

Muller, however, is less confident of Telkom reaching these targets. He notes the original target - set for 2008 - has already been pushed back two years and the company would have to accelerate installations now at "a rapid pace".

Telkom is installing almost 8 000 lines a month if one divides its gains over a six-month period, he says. Muller points out that some industry players have indicated this figure should be closer to 30 000.

However, Letlape says that during the 2006 financial year, there was a 146% increase in ADSL installations.

A BMI-TechKnowledge statement released last month indicated SA is likely to fall short of overall broadband targets. The statement notes that as Telkom continues to upgrade its DSL services to higher speeds at cheaper prices, "all signs now indicate its roll-out cannot keep up with the latent demand".

BMI-T expects there to be nearly two million PC broadband connections by 2010. However, the company says "the overall definition of broadband used in this case is a generous one, including all connection speeds".

The statement says government's ambitious goal of 5% of population penetration is not going to be met. "But at two million connections, we would, in fact, achieve close to 4% of a population of 50 million people in 2010.

"This would be a big achievement, especially considering SA had a 0.2% penetration at the beginning of 2005."