MWEB calls for quick win LLU solutions

MWEB CEO says that reducing Telkom’s ADSL IPC prices will give the industry a quick win

By - December 2, 2011

MWEB today (2 December 2011) said that it supports the phased approach for Local Loop Unbundling (LLU) announced by ICASA yesterday, but has called for measurable steps to be implemented in the process.

Rudi Jansen, MWEB Group CEO, says that MWEB has been an active supporter of a phased approach throughout the LLU discussion process and believes it is the best way for stakeholders to transition their business models, ensuring the sustainability of the process.

“While the announcement came out as scheduled from the regulator and we welcome the approach, we believe short term interventions need to be put in place to tackle issues around IP Connect and Bitstream access,” he says.

“Reducing Telkom’s IPC prices will give the industry a quick win, for example, as will addressing the Naked ADSL issue,” says Jansen.

Telkom’s IPC is currently the only way ISPs can connect to the last mile on the Telkom infrastructure. But Jansen says that at six times the cost of connecting to Europe, the prohibitive cost of national broadband is stifling industry growth.

“Reviewing the IPC pricing by 31 March 2012 as stated by ICASA could result in direct benefits for the consumer, but it is too early to pin our hopes on it”, Jansen adds.

Rudi Jansen

Rudi Jansen - MWEB CEO

The issue of access-line deficit, where Telkom claims the average cost of maintaining lines is higher than the monthly telephone line rental fee it charges its customers, requires more investigation, Jansen believes.

As such, MWEB supports ICASA’s recommendation to establish an access line deficit recovery scheme to take active steps towards Naked ADSL.

“Telkom’s access line deficit argument in opposition to Naked ADSL reinforces its monopoly and again holds back the local telecoms industry, preventing the growth of other ISPs and job creation for the local economy.”

“The consumer is also impacted by having to pay a voice line rental fee for a voice line they may not even use,”” says Jansen.

ADSL is also increasingly competing against mobile broadband solutions. Jansen says the fact that Telkom does not allow the ADSL line portion to be subscribed to as a stand-alone makes it difficult to ensure a competitive offering.

In addition, he says, it increases Telkom’s ability to bundle voice minutes with ADSL lines which further weakens competitive offerings.

Jansen also expressed the company’s disappointment at ICASA’s announcement not extending LLU to the wireless broadband industry.

MWEB believes the very inflated prices wireless operators offer ISPs for access to their last mile infrastructures should be lowered to wholesale levels to enable ISPs to compete effectively. This would further stimulate broadband growth and ensure the advancement of the industry as a whole and not just in isolated pockets.

“LLU will go a long way to address certain key problems that currently exists in the local broadband industry. We should be further down the road by now, but at least some momentum has been created. Maintaining that momentum will stimulate competition, increase Internet penetration, promote consumers choice and support job creation as ISPs are given the opportunity to increase their growth,” says Jansen.

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