Telkom has hit back at the introduction by MWeb and other Internet service providers of uncapped broadband, accusing rivals of “not delivering on their promise”.
In a newsletter sent out to Telkom subscribers with their monthly bills this month, the incumbent fixed-line operator climbs into its competitors without naming them.
“The introduction of uncapped broadband was supposed to bring with it pure Internet joy, but it’s become very clear that all that joy is subject to terms and conditions that are hidden in small print,” the newsletter says.
“It’s unfortunate, but that’s what you get when you buy uncapped broadband in SA. Many service providers talk the talk, but don’t deliver on their promise.”
The newsletter goes on to talk about Telkom’s Do Broadband products, and how they supposedly offer better value than the uncapped offerings from the company’s rivals.
It markets the fact that its 1GB Do Broadband Level 1 product, which costs R199/month, also offers 10GB of “free” local bandwidth, a 3GB mailbox and access to Encyclopaedia Britannica online. “You can choose to buy another 1GB for R64,76,” it says. “The total will be R263,76.”
The company then lays into rival MWeb, without naming it: “The entry-level package from other providers that includes ADSL will set you back R349. That’s R86 EXTRA [Telkom’s emphasis] per month!”
Telkom says “the truth” is that “many people don’t use all their allocated data per month. Now, by going the uncapped way, you’re most certainly subsidising someone else and you get zilch in return.”
The newsletter concludes by saying that there are offers in the market that, at face value, look cheaper than its Do Broadband products. “However, they do make make provision for 10GB FREE [Telkom’s emphasis] local data that gives you access to locally hosted websites like your banking institutions.”
The newsletter — clearly aimed at stopping Telkom customers from switching to another Internet service provider — may backfire on the fixed-line operator. The company’s broadband customers have long complained about Telkom’s aggressive bandwidth capping policies and perceived high prices.
Analyst and researcher Arthur Goldstuck, MD of World Wide Worx, says Telkom’s Internet service provider will lose market share if it doesn’t respond to the improved offerings in the market from the likes of MWeb.
“I’m not suggesting Telkom needs to match other service providers gigabyte for gigabyte, but they do need a new mindset in terms of what they give the customer — not the rations they are doling out at the moment,” he says.
“The market perception is that uncapped broadband is now the market trend and if Telkom doesn’t offer it, people will choose other service providers.”
However, Goldstuck says Telkom is still in a controlling position in the market. Even if consumers desert its Internet service provider en masse, it will still collect the lion’s share of revenues in the broadband market due to its monopoly control over the fixed-line network. — Duncan McLeod, TechCentral
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