Following Telkom’s decision to introduce a wholesale 1Mbit/s ADSL Internet product at less than R50/month, Internet service provider MWeb has debuted an uncapped ADSL solution that costs R79/month.
The MWeb product, which excludes ADSL subscription fees and mandatory dial-tone service from Telkom, is available with immediate effect.
All of the service provider’s capped ADSL products are also available on the 1Mbit/s line.
Telkom introduced the 1Mbit/s product to provide Internet access at affordable prices to those looking for an alternative to data bundles from the mobile operators.
The product is also meant to serve those living far from its telephone exchanges, where speed over copper infrastructure is limited.
“Our new uncapped ADSL products form part of a series of changes we are making as Telkom introduced and reintroduced new line speeds back into the market to give users more options and the opportunity to access the Internet via ADSL,” said MWeb GM for products, sales and marketing Carolyn Holgate in a statement.
TechCentral reported last month that, in addition to the new, low-cost ADSL product, Telkom is mulling other options to grow fixed-line broadband in South Africa. This includes the possibility of doing away with the need for consumers to pay subscription fees for both telephone line rental and ADSL if all they are after is broadband, not a dial-tone service. However, this so-called “naked ADSL” option, introduced by a number of fixed-line operators around the world, does not appear to be in the immediate offing.
Prenesh Padayachee, Telkom’s MD of wholesale services, said that the new 1Mbit/s plan is designed to get people onto the fixed-line network.
Padayachee said that even at R50/month, Telkom can provide 1Mbit/s access speeds profitably, but he emphasised that this is only because the company is using infrastructure already in place. If it had to roll out new networks and equipment, it wouldn’t make financial sense. Still, the product is being offered at a slim margin, he said.
He predicted the new, lower price point will have a “massive impact” on demand for fixed lines in South Africa.
In addition, Telkom is contemplating the possibility of doing away with the need for its customers to pay for a dial tone in addition to the ADSL subscription charges. This would involve providing a single price for copper-based subscriptions.
“There is a lot of work happening in the background around that… It’s definitely something we are analysing.”
But he said that there is a “real cost” in maintaining copper lines into people’s homes. “A large portion of the maintenance component is covered in the access line rental rather than in the ADSL component. But we should get to a point where the copper portion is a fixed-line portion and everything on top of that is an add-on.” — © 2015 NewsCentral Media