Telkom has agreed to cut the cost of IP Connect, the product Internet service providers have to purchase to get access to Telkom’s fixed-line broadband network, by 30% from Sunday, 1 April, the Independent Communications Authority of SA (Icasa) said on Friday.
ISPs have long complained about the high cost of IP Connect, saying it is one of the contributing factors to high fixed-line broadband costs in SA.
“The cost of the IP Connect product is the single largest cost component faced by competing ISPs in providing choice to the end user for fixed-line ADSL services,”Icasa said in a statement.
The authority said it expected the reduction in the prices to increase the margins available for ISPs, stimulating innovation and investment. It would also provide space for retail price reductions and increase take-up of ADSL services.
In addition, Icasa said it was making progress in its phased approach to unbundling Telkom’s local loop — the “last mile” of copper cable infrastructure into homes and businesses. It said it was working with all stakeholders to ensure the implementation of a “bit-stream” product, with a clear and concise ordering system for ISPs. It wanted this implemented by November 2012.
“Further options will be explored at a later date, taking into account the financial and technical viability of such as well as dynamics within the market for the provision of broadband services,” Icasa said.
It added that it was working with Telkom to determine the size of the access-line deficit — the difference between what Telkom charged subscribers for basic line rental and the cost of providing the line — as a precursor to the introduction of bit-stream access.