Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      South Africa begins complex job of overhauling media laws

      13 July 2025

      Nvidia CEO to hold high stakes media briefing in Beijing

      13 July 2025

      Blue Label Telecoms to change its name as restructuring gathers pace

      11 July 2025

      Get your ID delivered like pizza – home affairs’ latest digital shake-up

      11 July 2025

      EFF vows to stop Starlink from launching in South Africa

      11 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025

      Grammarly acquires e-mail start-up Superhuman

      1 July 2025

      Apple considers ditching its own AI in Siri overhaul

      1 July 2025
    • In-depth

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025
    • TCS

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025

      TCS+ | First Distribution on the latest and greatest cloud technologies

      27 June 2025
    • Opinion

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » News » Telkom price cuts: ISPs react

    Telkom price cuts: ISPs react

    By Sunil Gopal24 April 2015
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp
    Tim Wyatt-Gunning
    Tim Wyatt-Gunning

    Internet service providers (ISPs) have adopted a wait-and-see attitude about the wholesale broadband price cuts of up to 63% announced by Telkom on Thursday.

    Industry body, the Internet Service Providers’ Association (Ispa), says the reductions are a result of a settlement reached between Telkom and the Competition Commission in 2013 regarding the fixed-line operator’s previous anticompetitive behaviour.

    Telkom agreed to pay a R200m penalty and to “functionally separate” its retail and wholesale divisions and adhere to pricing commitments for the next five years.

    It also agreed that its future conduct would be monitored.

    The agreement formed part of a broad-ranging settlement with the commission over abuses that took place between 2005 and 2007.

    The settlement package also included an admission of guilt by Telkom and a commitment to “transparent transfer pricing” to ensure “nondiscriminatory service provision” to its retail division and to ISPs.

    However, Prenesh Padayachee, the MD of Telkom’s wholesale services business, says the price reductions go beyond the Competition Commission settlement agreement.

    Ispa has welcomed the move by Telkom, saying that both ISPs and customers will benefit.

    Tim Wyatt-Gunning, CEO of WebAfrica, says ISPs met with Telkom last week and that all information about the new prices was delivered verbally only.

    “There are a lot of unanswered questions and until we have a full written description of the detail, it would be premature to comment since we can’t make any decisions about our ADSL pricing and packages. The devil, as ever, is in the detail,” Wyatt-Gunning says.

    He says it is unfortunate that Telkom recently increased line rental charges.

    “I think it’s a shame that Telkom chose to increase line rental, because that’s the real barrier to making more South Africans consider getting a fixed line,” he says.

    “IP Connect pricing is a very significant component of an ISP’s costs, but before people can consider an ISP’s offering, they need to be able to afford ‘step one’, which is low-cost line rental.”

    IP Connect — a big input cost for ISPs — is one of the wholesale charges that is being cut by Telkom.

    Crystal Web CEO Shaun Kaplan says, too, that it’s a pity the increases were coupled with an increase in the analogue line rentals.

    “Price reductions result in either the same or similar services offered at a lower price, or an overall better quality of broadband in South Africa,” Kaplan says.

    “We hope that the balance of the market is shifted towards quality over cheap. ISPs have been calling for IPC reductions in order to offer a better quality of service in the market.” Although he welcomes the price reductions, he is also waiting for the details.

    If the cost reductions are indeed significant, it will lead to a more competitive industry and lead to lower fees for consumers, he says.

    Greg Montjoie, executive for connectivity at Dimension Data’s Internet Solutions, says Telkom’s price cuts “will not only have an impact on DSL (digital subscriber line) pricing, but also on the quality of service as the offer includes a commitment from Telkom to provide significantly increased bandwidth on IPC for a marginal increase in cost to the ISP”.

    “We anticipate some ISPs may have to make significant investments in international bandwidth to cater for the increased IPC demand,” Montjoie says.

    “It must be remembered that the Telkom IPC costs are only a portion of the total cost to deliver a DSL service to the market and because of this we don’t anticipate ISPs will be able to pass an equivalent percentage discount to clients.

    “Although ISP fees should decrease and this will allow further penetration in the market, the cost of the line rental is still prohibitive for some and certainly a barrier to entry for many,” he says.

    “However, with the anticipated increase in quality and lowered costs, the ability for people  to use this as a medium to consume more online movies and media will certainly drive penetration and usage as people transition to online consumption of TV shows, movies and other media.”  — © 2015 NewsCentral Media



    Crystal Web Ispa Prenesh Padayachee Shaun Kaplan Tim Wyatt-Gunning WebAfrica
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleTelkom announces sweeping price cuts
    Next Article Me&you mobile pricing revealed

    Related Posts

    TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

    4 July 2025

    Internet industry backs Solly Malatsi’s BEE reform plan

    3 July 2025

    Vodacom fibre deal is ‘anti-competitive and irreversible’: tribunal

    28 March 2025
    Company News

    $125-trillion traded: Binance redefines global finance in just eight years

    11 July 2025

    NEC XON welcomes HPE acquisition of Juniper Networks

    11 July 2025

    LTE Cat 1 vs Cat 1 bis – what’s the difference?

    11 July 2025
    Opinion

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.