Lower ADSL IPC rates to boost ISP profitability
The Independent Communications Authority of South Africa (ICASA) announced last week (30 March 2012) that wholesale ADSL IPConnect (IPC) prices will be dropped by 30% from 1 April 2012. The lower wholesale ADSL rates give Internet Service Providers (ISPs) more breathing room on pricing.
Cybersmart MD, Laurie Fialkov said that the IPC price breaks are very welcome, as it makes the prices that the company currently has in the marketplace profitable. “Without the price breaks, the prices are just [breaking] even, with some of our products [making a loss],” said Fialkov.
Mweb ISP CEO, Derek Hershaw said that the company will use the IPC savings to boost its network capacity, and also cut the price on some of its products.
Altech Autopage’s Wayne de Nobrega said that, although recent pricing in the market was already pre-empting the price drop, the price reduction of 30% will create some additional room for some price adjustments.
“You will definitely see some additional products from ATC – first for the business market and then later for the consumer market,” said de Nobrega.
Web Africa CEO, Tim Wyatt-Gunning said that that the IPC price should probably be halved, but 30% is a good start.
“Since IPC represents well over half of our entire network costs, it’s a meaningful drop, so, for once, thank you Telkom for helping us to get one step closer to our international peers,” said Wyatt-Gunning.
Afrihost director, Greg Payne said that the ISP is very happy with the IPC reduction. “It is something we have been hoping would happen for a number of years,” said Payne.
“This will definitely have a positive impact on ADSL prices for consumers and businesses in South Africa. It also is positive for local ISPs, where they will be able to offer more exciting fixed-line services to compete with the latest mobile offerings,” said Payne.
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