Telkom files minor price changes

Johannesburg, 22 Jun 2010

Telkom has filed its tariff changes with the Independent Communications Authority of SA (ICASA), detailing an overall increase in prices of under 1%.

Despite heavy pressure on the company's bottom line, Telkom has only increased a few of its product prices. The company has also turned its focus to broadband offerings, keeping the rate unchanged, likely in the hope of attracting more volumes.

However, the company will have difficulty encouraging consumers to adopt its products, without an uncapped offering. Affordable uncapped broadband products flooded the market earlier this year, and have significantly changed the market and access prices. However, Telkom has yet to produce on what will fit the consumer.

“In our drive to make telecommunications more affordable and accessible, while aligning tariffs with costs, as well as our endeavour to defend and grow our business, I believe that we have, in general, managed to contain upward tariff adjustments fairly adequately,” says Nombulelo Moholi, MD of Telkom SA.

Telkom yesterday released dismal annual results, showing another decline in fixed-line voice customers. The company says it will now target the broadband market aggressively in the hope of stemming the tide.

Part of the plan will be realised in August, when the company formally releases its 10Mbps lines for Internet customers. Telkom has been testing the offering for over a year, and many exchanges have already been upgraded to the higher speeds, with some customers reporting 12Mbps.

Telkom's most popular product, DoBroadband, is one of the few areas where it is still seeing growth, with an increase of 25.4% over the year. ADSL subscribers increased by 18.1% over the year.

“Leaving certain prices unchanged will make these services - particularly the broadband experience - more attractive, affordable and accessible. Having complied with all regulatory prescriptions, Telkom is confident our proposed price changes will be approved by ICASA,” notes Moholi.

International woes

The prepaid market is where Telkom's increases will show. PrepaidFone local and long-distance calls increased overall by 4.5%.

Its Waya-Waya product will see a surcharge increase of 5c per call and installations for the product will go up by R13. Monthly subscriptions on Waya-Waya will increase by R5.60 and weekly rentals will go up by R1.29. Those customers paying the annual subscription will now pay R10 more.

Telkom's most popular voice package, Closer 1, will see an increased subscription of R5 and new postpaid line installations will go up from R468.05 to R491.

Moholi says: “Telkom's pricing has been carefully considered, taking the needs of its customers and economies of scale into account. Keeping the current overall tariff adjustment to a minimum is geared towards making the company more competitive and ensuring that telecommunications becomes more affordable and accessible.”

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