Competition played a role in Telkom’s decision to launch uncapped fixed-line broadband services on Friday. But the main reason it’s going uncapped is that it plans to launch video-on-demand (VOD) services within the next year.

The move — Telkom is at an “advanced stage” of discussions with a number of local and foreign content providers — will put the company on a collision course with incumbent pay-TV operator MultiChoice, which is also planning to introduce Internet-based VOD soon. MultiChoice owns DStv, which already offers a satellite-based subscription VOD-type service called BoxOffice.

Steven White, Telkom’s executive for converged business services, says Internet service providers can no longer provide differentiated services based on bandwidth and line speed alone and need to offer value-added products.

Content delivery will be a cornerstone of Telkom’s plans to remain competitive, he says.

“We understand that fast Internet isn’t the game anymore,” White says. “Our aspiration is to offer full content delivery services.”

He says Telkom isn’t trying to replicate Telkom Media (later renamed Super 5 Media), its failed attempt to launch a satellite-based pay-TV service in competition with MultiChoice. Rather, he says, the company will focus its efforts on Internet-based VOD, later offering full Internet Protocol television products.

White won’t say which content providers Telkom is talking to, but he will confirm that it is not engaging with Netflix.

Netflix is the largest VOD service provider in the US. “We’d love to have Netflix, but SA is not on their radar screen right now,” White says.

He adds that Telkom will increase fixed-line broadband speeds “across the board” to cater for VOD since these services can’t be provided over slower lines. However, he won’t put a timeline to this. Telkom’s entry-level product offers maximum download speeds of 384kbit/s, which is insufficient for VOD.

He also says Telkom is improving its network management capabilities to allow for “deep-packet inspection”. This will allow it to zero-rate certain types of content and premium-rate others. — Duncan McLeod, TechCentral