ICASA: Monday 18 April

Hi folks

Unfortunately I could not attend the ICASA hearings today, but from the feedback I have received I can inform you that it was a heated affair. Telkom’s presentation was short and unsubstantial, but afterwards they were peppered with penetrating questions from both the ICASA panel and the public. The following basic points were addressed in their presentation:

Capping: The old story that they must protect against bandwidth hogging
Throughput: Generally ADSL users get between 380 and 400 kbps before protocol is applied.
Line rental: The purpose for rental is because they have a material deficit. They denied any cross-subsidization. They admitted that your telephone usage might help to cover access costs for ADSL.
Pricing: ADSL prices will come down when competition enters the market. With the increase of clients there will be a decrease in price. Operating costs are continuous which means line rental costs will continue as well.
Other offerings: They are planning on introducing new offerings.

Some issues in the questioning part:

MWeb pointed out that they do not cap, but Telkom does. Telkom maintained that the capping takes place on the ISP side.

Telkom maintained that there is no line rental duplication, even when the council tried hard to clarify this point.

Telkom said that they will make contention ratios available.

Telkom said that the reason why they have line rental and the other countries don’t, is because they structured their product offering different.


There are many other issues. I will give a few more after I have listened to the presentation…

Comments are most welcome as usual.

Regards,

RPM

rpm said:

Telkom said that the reason why they have line rental and the other countries don’t, is because they structured their product offering different.

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Will ICASA please rule that Telkom has to structure their offerings according to international practice so we can pay international related ADSL rates!

hmmmm , was anyone there or anyone have the transcript to the days proceedings ?

Hi Kaspaas

I do not think ICASA will fall for these excuses. In my presentation I made it clear that they will try these tactics, and the panel apparently hammered on these issues. They international comparison is the one that stood out, and it is simply not possible to argue it away.

Regards,

RPM

I think Telkom is trying to pull a "we dont care" with a final statement like that.

Pricing: ADSL prices will come down when competition enters the market. With the increase of clients there will be a decrease in price.

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So what they are actualy saying is we will milk you as long as we can and as hard as we can.

I agree with kaspaas, ICASA needs to step in and slay this schoolyard bully.

rpm said:

Pricing: ADSL prices will come down when competition enters the market. With the increase of clients there will be a decrease in price.
RPM

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So when will the "competition enter the market and how will then miraculously be possible to lower prices? What is the difference between now and then as far as costs are concerned.

Do they not think that lower costs will attract more clients and therefore more revenue?

Sounds like the same old bull! Hope ICASA can see through it and make a ruling to favour us (the clients) and enforce it.

rpm said:

Hi folks
Telkom said that the reason why they have line rental and the other countries don’t, is because they structured their product offering different.

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"Structured" how????

What is the difference between now and THEN? Well, if they lower it NOW it means they will lose R600/month per user. say SNO only starts entering the schoolyard in Jan 2006, Telkom will score another R288 000 000 from the ADSL users. Its enough to make me sick...

<Q>[KillKape]So when will the "competition enter the market and how will then miraculously be possible to lower prices? What is the difference between now and then as far as costs are concerned.</Q>

Teklom counter argument to that one - if teklom provides the cheapest ADLS possible - what incentive does SNO have to provide competition ?

You can say that again!

Telkom said that the reason why they have line rental and the other countries don’t, is because they structured their product offering different.

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By saying this they have shot themselves in the foot. Did they not look at the international trend? IMO Telkom is far too clever to have 'overlooked' this and have simply structered the ADSL packages for maximum profit. Just like the 4gig unshaped package.

Thats exactly what this statement means.

I've noticed a trend that as soon as Telkom is cornered they keep on repeating themselves: "We deny..."

I guess that ICASA will also realise that Telkom does not have the ability to roll out ADSL at the speeds required.

I read that they were impressed because they managed 10 000 new lines in 2 months... that is 60 000 per year. As was pointed out during the hearings - Telkom will need 10 years to install the next 1-million ADSL lines at this rate.

Obviously the Telkom ADSL people lost the abitlity to think big - else they would have been ashamed of their boast!

"Celli said Telkom is also addressing the issue of high ADSL costs. “We will announce a number of price reductions over the next two months as part of our short term strategy, but I cannot say what our long term strategy is going to be.”

www.itweb.co.za

"Telkom said that the reason why they have line rental and the other countries don’t, is because they structured their product offering different."


International practice indicates that adsl "speed" is reflected in the ISP costs - the faster the connection the more you pay.

With Telkom, ISP costs stay the same, no matter what speed package you take (192 / 384 / 512). Line rental determines the cost / speed.

Now this does not make any sence at all. The bottom line still is - WE ARE BEING RIPPED OFF

Hi Rpm,

I attended the hearing today, and yes some difficult questions were asked of Telkom, from the public and the panel.

I must take my hat off to the panel, as they were the first to point out the conflicting statements made by Telkom in the written submission and their Oral submission. The Chairlady should be congratulated for not letting Telkom squirm out of answering direct questions.

I will recap a few of the interesting statements that stuck in my mind as I was very angry at times and forgot to take notes!

1 Price was mentioned as the biggest problem/complaint again. This has been a common complaint made by most speakers. Telkom claimed that the Access Fee (or Line Rental = R600) was actually not enough, and that they were at a deficit with respect to CAPEX !!!!!!! This was shot down again in the Q&A

2 Dynamic VS Static IP addresses. Another loud call for static IP, and when Telkom were asked WHY they went the route of dynamic IP, the speaker confirmed that they could get more revenue out of the Diginet service, even though it is an older technology!

3 MWEB presented today and once again it was proven that VANS (ISP's) cannot compete with Telkom in the current environment. There was a fairly heated question /answer between MWEB and Telkom, and Telkom even made the statement that Mervyn Goliath (General Manager Technology Operations - MWEB) did not have the technical knowledge to understand the difference between IP connect and SAIX offerings by Telkom !! This caused blood to boil, and not Mervyn's.

4 Telkom presented documents to the panel (which the public did not get to read) , and in these documents the addressed the Markinor survey and how happy the ADSL users were and proudly declared that majority of users do not go over the CAP!! DEBBIE (Debbie 2) did address the panel and shot holes in the other survey done (forget the name). The panel stated that these survey results would be studied in depth

5 Telkom was asked why they only charge a fee to migrate down and not up when changing ADSL packages, and their honest answer was for pure business reasons...

6 One speaker brought it to the attention of the panel that India had forced a drop in prices for broadband access on 1 April, 2005 by 75% and this drew quite a few requests for written proof of this fact to be submitted to the panel.

All in all it was a good day. I did come out of the hearings with a headache, but some very important issues were addressed. I truly hope that ICASA act of their findings in this hearing, and that these findings reflect the total dissatisfaction that all the speakers I heard, expressed about Telkom ADSL service and pricing.

RPM your presentation was referred to by the panel in the Q&A on numerous occasions - all your handwork is already paying off. Thanks again.

Regards,

Hi Morebroadband

Thanks a bunch for the great feedback. If I knew there would be a change for feedback from the audience I would have definitely taken off from work today to attend. I do believe, however, that the panel had a good understanding of the current problems and that they were not fooled by Telkom’s responses (is that also your perception?).

Regards,

RPM

doekvoet said:

"Telkom said that the reason why they have line rental and the other countries don’t, is because they structured their product offering different."


International practice indicates that adsl "speed" is reflected in the ISP costs - the faster the connection the more you pay.

With Telkom, ISP costs stay the same, no matter what speed package you take (192 / 384 / 512). Line rental determines the cost / speed.

Now this does not make any sence at all. The bottom line still is - WE ARE BEING RIPPED OFF

Click to expand...

Doekvoet, that is an extremely good point, hopefully that was pointed out in the hearings in some way?

Adlo,

The fairness of this migration fee was not discussed. The whole question re-migration fee was raised by Mr Gary Catlin, and I was surprised that it had not been raised before. The question was asked during the Q&A and as we were running late, not much time was spent on this.

RPM, one thing I forgot to write was that one the guys fro Telkom disputed your statements that they (Telkom ) did not respond to your questions. Plse make sure the panel get proof off what you stated about them not responding.

Telkoms pricing was hotly debated, especially the access fee. The squirmed every time this was brought up, and one guy acknowledged that there was a large price disparity, even though I don't believe he realized it. Shows what a little pressure can do!

this bull#$%^cant go on.

thats right they just want to get as many contracts out to stupid people,so that they will make a profit till the very last drop.Logicaly i will do such a thing when i know i am going down.Could there be corrupt under the table deals at this meeting causing favour for telkom in any way.I think yes but we will never know.