Telkom charging twice for the same product

The telecommunications industry is in the dark over a time-frame for when Telkom (TKG) will be made to reduce its IPConnect (IPC) service, with the result that the incumbent continues to hold back fast, affordable broadband – according to OpenWeb.

The broadband provider noted that the Independent Communications Authority of South Africa (ICASA) was set to engage with industry to reduce the price of Telkom’s IPConnect (IPC) service, from 31 March, 2012.

This is according to its local loop unbundling document released at the end of last year.
“However, industry is confused as to when this will happen, and more importantly, what the price reduction will be for IPConnect services,” OpenWeb said.

Group CEO, Keoma Wright, accused Telkom of holding back fast, affordable broadband in South Africa.

“As everyone is aware, the cost of the IPConnect service is the single-most expensive ingredient in the make-up of ADSL. If Telkom cut the cost of their IPConnect link by only 50% per month, ISP’s would be able to instantly offer a less-contended service that costs less.”

Wright says Telkom is charging twice for the same product. “Telkom clients and their ISP’s are paying for the use of the same Telkom ADSL network, this is ludicrous.

“Telkom really has two choices – both of which they will ignore until the regulatory body forces them to choose. They can either drop the cost of IPConnect significantly; we are talking about a drop of up to 90% to make a significant difference. Or alternatively offer third party ISP’s access to Telkom exchanges.”

OpenWeb says that, although ICASA is discussing its promised ADSL IPConnect price cut intervention with Telkom, nobody can confirm when this will materialise.

The regulator told MyBroadband last month: “ICASA has engaged Telkom in respect of a price reduction for IPConnect services. Once discussions have been finalised, the authority will inform all stakeholders of changes in the wholesale access regime for fixed line services.”

Telkom also confirmed that the regulator has engaged with them regarding a possible price reduction for IPConnect services.

“If the Minister of Communications, Dina Pule, wants to achieve 100% broadband penetration by 2020, she must address the above issue first, as this will be a quick win for the government,” Wright concluded.