Telkom is moving to shake up the broadband market in South Africa and arrest the decline in the number of fixed lines in service by slashing prices, doubling speeds, doing away with separate telephone line rentals, offering free bundled mobile data and offering unlimited free calls to customers.

The radical overhaul, to be announced on Friday afternoon, looks set to spark renewed interest in the company’s broadband digital subscriber (DSL) and fibre-to-the-home products as competition in the fixed-line market, where Telkom historically enjoyed a monopoly, intensifies.

TechCentral can reveal that Telkom will, over the next 30 days, double the speed of some lower-end DSL plans and offer free, unlimited on-network calls to all broadband users on its new “Unlimited Home” deals. It will also offer Sim cards, with bundled data — up to 3GB/month — to all subscribers to the new fixed-line plans. The free calls apply to those made to other Telkom fixed-line numbers as well as any of the four million users of its mobile network.

The moves, which echo the radical mobile plans the company introduced last year called FreeMe, are likely to set the cat among the pigeons, especially the plan to offer unlimited free phone calls. “Data has fallen,” declared Attila Vitai, the CEO of Telkom’s consumer business, in an interview with TechCentral – a reference to a social media campaign by consumers for operators to reduce the price of Internet access in South Africa.

The radical overhaul comes just a week after Openserve, Telkom’s wholesale division, announced sweeping price cuts to its wholesale broadband IP Connect pricing and to its fibre access portfolio. Those price cuts come on top of price reductions that Openserve announced in May and which took effect in June.

Under a wide-ranging consent agreement with the Competition Commission, entered into in 2013, Telkom operates Openserve on an arm’s-length basis, with the wholesaler meant to serve the entire market of Internet service providers, including Telkom’s retail arm, on an equitable basis.

‘Listening to customers’

“We have been listening to customers, not just here in South Africa, but looking at worldwide trends,” said Vitai. “I think the world over, consumers are worried about bill shock, the cost of using data, whether it’s mobile or fixed, and the only way realistically that customers feel at ease about using substantial volumes of data for video downloads and so on is if it’s unlimited.

“We saw the success of FreeMe, and we’ve tried to replicate on fixed what we did on mobile,” he added. “We are giving people a great deal of value for a fixed price in terms of unlimited data at a certain speed, depending on which package you buy. We will give free Telkom on-net calls — unlimited as well. This is the end of people worrying about Telkom’s voice revenue decline.”

Vitai said he is confident that the new plans will not only arrest the falling number of fixed lines in service, but has the potential to reverse the trend as consumers begin to see much greater value in having a wired connection at home.

All the new plans offer unlimited data, with a high-bandwidth fair-use policy (FUP) — up to 6TB/month on a top-end plan — to prevent abuse. Even if consumers exceed the FUP, they may have their speeds throttled, but won’t be cut off from the Internet.

To sweeten the deal even more, the company has announced it will offer discounted calls to 30 top international destinations. The 20% discount means calls to the US and the UK, two popular destinations, will cost 50c/minute.

TechCentral can reveal that Telkom customers on 2Mbit/s and 4Mbit/s plans will have their speeds boosted to 4Mbit/s and 10Mbit/s respectively. Those on higher-speed connections will see their monthly bills reduced. Telkom is also doing away with telephone line rental as a separate line item on bills.

“From 31 August, existing uncapped customers will automatically be upgraded to the new Unlimited Home plans at higher speeds,” Telkom said.

“Customers will be upgraded from 2Mbit/s to 4Mbit/s and from 4Mbit/s to 8Mbit/s or 10Mbit/s respectively. Customers will enjoy double the broadband speed and experience much higher fair-use policy values with minimal price increases compared to current packages. Significant price reductions have been applied to the 20Mbit/s, 40Mbit/s and 100Mbit/s Unlimited Home plans,” it said.

The FUP starts at 360GB/month on the 4Mbit/s plan and goes up to 6TB/month on the 100Mbit/s fibre plan. Data used between midnight and 7am won’t count towards the FUP. The table below provides an overview of the new packages, which include all costs, including the cost of the line:

“The packages, which are competitively priced by global standards, will open new unlimited gaming, streaming and downloading opportunities for South Africans for a standard monthly cost,” Telkom said.

“We are trying to open up data communications to the masses. We are conscious of the digital divide and we are trying our best to bridge that,” Vitai told TechCentral.

The new 4Mbit/s plan comes with a Sim preloaded with 1GB/month of mobile data, while the 10Mbit/s package comes with 2GB/month of mobile data. The 20Mbit/s, 40Mbit/s and 100Mbit/s plans come with 3GB/month each. The mobile data only works on Telkom’s network — roaming MTN data is not available.

The new deals are permanent rather than promotional tariffs and have been filed with communications regulator Icasa, Vitai said.

“We are hopeful that this will open up fixed-line communications to a larger market. This is what consumers want. It will have the impact of reducing churn … and will arrest the longer-term decline on the fixed-line side.”