The Internet Service Providers’ Association (Ispa) has called for further reductions in the fees Telkom charges ISPs for access to its fixed-line broadband network.
The fees, known as Internet Protocol Connect (IPC) charges, were reduced by 30% in 2012, prompting a wave of price cuts to consumers.
“Further reductions in IPC prices are required urgently to keep fixed-line connectivity competitive in South Africa,” Ispa says in a statement, adding that IPC is responsible for up to 70% of the cost base of connectivity provided by third-party ISPs.
“The retail ISP market has shown time and time again that high levels of competition lead to pricing transparency and wholesale rate cuts are quickly and efficiently passed on to consumers.,” says Ispa co-chair Marc Furman. “With the local-loop unbundling process stalled, Ispa urges [regulator] Icasa to consider mandating a further reduction in the IPC rate to help drive prices lower until other options for service provision become available.
“We believe Icasa should act swiftly to reduce the IPC cost further and look to review it on an annual basis. This is a palliative measure that worked well and should be employed again.”
Ispa says the IPC product has “not seen any significant upgrade or improvement since it was introduced a decade ago”.
“Despite being critical to the service that ISPs provide to their customers, it remains ‘best effort’, with no service-level agreement or quality-of-service guarantee available to the ISPs that use it.” — (c) 2013 NewsCentral Media