Former Telkom manager explains why an IPC price cut is urgently needed

A former Telkom Wholesale manager explains why Telkom must cut its wholesale access rates in a growing fibre-to-the-home market.

By - March 15, 2016 Share on LinkedIn
Telkom fibre

The fact that other fibre-to-the-home providers are significantly cheaper than Telkom at a wholesale level will hurt Telkom, and may force Telkom’s hand to reduce IPC prices.

This is according to Marius Olivier, head of XDSL’s commercial business and former Telkom Wholesale manager.

Telkom’s wholesale FTTH model is similar to DSL, where service providers purchase IPC capacity to provide data products to their clients.

Olivier said most ISPs that offer DSL and FTTH products on Telkom’s network have, on numerous occasions, requested lower IPC rates to enable growth in the fixed-broadband market.

He said the number of fibre operators in the market that build their own fibre infrastructure is growing.

The fact that many of these operators cross-connect with ISPs at Teraco at significantly reduced rates will negatively impact Telkom.

“For as long as IPC pricing remains at the high per-Mbps rates they are now, ISPs will be very hesitant to purchase additional IPC bandwidth, if at all,” said Olivier.

He said ISPs will continue to resell fibre-to-the-home and fibre-to-the-business from other carriers like Vumatel, Link Africa, and MetroFibre Networx.

“Telkom was moving in the right direction last year when they provided a double-up option on IPC bandwidth, with an associated 15% increase in the ISPs’ IPC spend.”

He said only a few ISPs took advantage of the offer, though, as the window of opportunity was limited to three months.

“Many requests to Telkom [Wholesale] (now Openserve) to open up the window of opportunity again has fallen on deaf ears,” said Olivier.

“Telkom would most certainly do themselves a favour if they significantly reduce their IPC rates to enable ISPs to resell Telkom’s DSL and FTTH services.”

Olivier said Telkom must reduce IPC rates if its wants to remain a significant player in the fixed-broadband space.

“Should they not reduce IPC prices, Telkom will most definitely feel the burn of reduced uptake and lower fixed-broadband revenues.”

“Let’s hope they make the right decisions in line with the government’s broadband plans for the country.”

More on Telkom IPC prices

Telkom ADSL IPC price cut details

Massive Telkom ADSL wholesale price cuts

Share your thoughts

Join the conversation

Connect with Us

androidappletwitterfacebookgoogleplusfeednewsletter

Poll

Which online social platform is your favourite?

View Results

Loading ... Loading ...

More News

OpenView HD subscriber numbers skyrocket

Openview HD logo

eMedia Holdings has released its financial results for the year ended 31 March 2016, revealing a sharp increase in OpenView HD subscriber numbers.

Meet the local software development company that’s expanding globally

redPanda headline image

Cape Town-based redPanda Software is rapidly growing and looking for experienced core java developers to join their team.

Weirdest and most expensive items you can buy online in South Africa

Online porn

From properties and businesses to crazy-expensive consumer goods, you don’t have to go to the dark web to find offbeat stuff to buy online.

The Pirate Bay goes back to .org domain

The Pirate Bay

The Pirate Bay has gone back to the domain name where it started – ThePirateBay.org.

X

Newsletter Subscription


Name
Email *
Enter the following to confirm your subscription *
Captcha image


Free MyBroadband Newsletter
Subscribe
×