Much like Cell C setting the wheels of a mobile price war in motion last April, Telkom started off this year with aggressive tactics, which has ignited some reaction, spurring what could be the start of another telecoms price war - this time on the broadband front.
While it may be more of a scuffle than an actual war at this stage, analysts say it is a move in the right direction, which will ultimately benefit the consumer.
Telkom's January move to significantly cut its uncapped ADSL prices, say analysts, has created a more competitive environment, as other Internet service providers (ISPs) respond, and as pressure mounts for Telkom to relinquish some of its control over ADSL in SA.
And SA's ISPs have sat up and taken notice, with many immediately introducing price cuts and promotions, but some say the move by Telkom is still not enough.
Here is a list of some of the broadband price salvoes that have been fired so far this year:
1. On 24 January, Telkom unexpectedly dropped a price bomb when the company slashed its uncapped broadband prices by up to 40% for consumer uncapped products and up to 35% for business uncapped products. The new pricing became available on 1 February.
2. MWeb, SA's second largest ISP, was first to react when, on 29 January, the company introduced a range of new throttled, uncapped ADSL products to complement its Premium Uncapped ADSL product suite. The new products became available on 1 February.
3. Next to fire, on 4 February, was Web Africa, which reduced its home uncapped ADSL prices by up to 32%.
4. OpenWeb soon joined in, on 5 February, by introducing a promotion on its Standard Uncapped ADSL products - a move expected to save customers up to 60% per month on their ADSL packages.
5. On 5 March, Afrihost began offering free ADSL accounts with 1GB of data. The offer, said the ISP at the time, gives customers free data each month until the account is cancelled and is not a promotion - nor does it place any obligations on clients to sign up.
ISPs say, however, preventing further cuts at this stage is the fact that - while Telkom's retail arm introduced uncapped ADSL price cuts of up to 40% ? its wholesale arm (which supplies connectivity to SA's ISPs) did not follow suit.
As Ovum analyst Richard Hurst says, while the broadband price war is not over per se, Telkom "holds all the cards".
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