Lower Telkom tax urged

High-speed DSL access is unaffordable, before bandwidth costs are even factored into the equation, says ISPA GM Ant Brooks.
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High-speed DSL access is unaffordable, before bandwidth costs are even factored into the equation, says ISPA GM Ant Brooks.

In what looks like an interim measure for Internet service providers (ISPs), the industry association is calling on the regulator to force Telkom to bring down line rental costs.

The Internet Service Providers' Association (ISPA) says the costs that Telkom charges for line rental (Telkom tax), is keeping the actual cost of broadband artificially high. It also says customers should not be forced to have a voice line with an ADSL connection.

However, a request like this could be entirely mitigated, if the Independent Communications Authority of SA (ICASA) pushed Telkom to unbundle the local loop. Access to exchanges and infrastructure could give broadband providers the opportunity to provide their own ADSL, and not just bandwidth.

Chris Gilmour, Absa Investment analyst, says the association is likely putting out the call as an interim measure, before the local loop is unbundled, especially since the regulator often takes time to make decisions.

ICASA has not given any clarity on the local loop, despite repeated requests from ITWeb for that information.

BMI-TechKnowledge research director Brian Neilson says ISPA's call is likely to be heard. “The ADSL market is gradually opening up, and Telkom has put a commercial reselling model in place for the transmission component of ADSL, ahead of expected future regulatory intervention in the form of a formal wholesale regime.”

[EMBEDDED]He says ICASA is required to rule each segment of the telecoms market, and the DSL market has become a large part of Internet access in the country, meaning Telkom's monopolistic hold on the infrastructure will have to be examined.

“It's likely the wheels are already in motion, and Telkom would be hard pressed to disprove SMP in relation to ADSL transmission over its copper local loop. By adding its voice to this challenge, ISPA is adding fuel to embers that are already glowing,” he adds.

ISPA GM Ant Brooks says the analogue line rental and DSL access costs for a 4Mbps ADSL service alone cost R544 per month. This means high-speed DSL access is unaffordable for most South Africans before bandwidth costs are even factored into the equation, he explains.

Add on an uncapped MWeb account and the price goes to around R899. UK-based telecoms provider BT supplies an ADSL line, with unlimited bandwidth and unlimited calls in the UK, at around R450 per month.

Candice Jones
ITWeb online telecoms editor

Candice Jones is an online telecoms editor with a focus on telecoms. She loves line speeds that go up and call rates that go down.

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