New front in ISP price war? - TechCentral

New front in ISP price war?

Rob Gilmour

Has RSAWeb opened a new front in the price war between Internet service providers? The company has cut the price of broadband line rental by as much as 30%, cutting out all the margin it earns from reselling lines from Telkom.

It has reduced the price of digital subscriber line (DSL) rentals on 384kbit/s line to R129/month, below Telkom’s rate of R152/month. On 1Mbit/s lines, it’s cut the price to R211/month, compared to Telkom’s own R289/month. And on 4Mbit/s and 10Mbit/s services, the price is now R322/month, compared to R413/month via Telkom directly.

RSAWeb MD Rob Gilmour says consumers have benefited from the recent price war of data provision, but when the cost of line rentals is added, the barrier “remains too high, especially for the lower income groups that have been hardest hit by recessionary pressures and rampant inflation”.

“Despite the steady fall of DSL and mobile data costs due to healthy competition over the past two years, the cost of DSL line rentals has not followed suit,” Gilmour says. “[The Independent Communications Authority of SA] is making strides in the right direction with local-loop unbundling, but the progress is too slow and too late in the game.”

He says that by reducing line rental costs, broadband penetration “can grow at a faster pace, creating a much larger pool of Internet users”.

“The new prices will also put pressure on the incumbents to lower the wholesale prices of line rentals, as we’ve seen was the case with the recent broadband data price wars.”  — Staff reporter, TechCentral

Comments are closed.