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Thread: Telkom's ADSL threat

  1. #1

    Default Telkom's ADSL threat

    Link to article

    Johannesburg - Telkom has threatened to scrap plans to invest billions of rand in a high-speed network and to sever its existing ADSL lines unless the industry regulator Icasa lets it charge a monthly rental, Business Day reported on Wednesday.

    The telecommunications monopoly on Tuesday expressed its shock at the "flawed" and "ludicrous" findings of a report by the Independent Communications Authority of SA (Icasa) and says they will contest the findings.

    Icasa wants to introduce comprehensive regulations on the ADSL service within the next four weeks.

    Stephen White, head of product development at Telkom, said the telecommunications giant would approach Icasa to discuss "mistakes" in the planned regulations. If this is not successful, Telkom will consider legal action.

    Telkom's main concern is with Icasa's plan to put an end to the so-called double levy. Telkom charges one tariff for the rental of an ADSL line and another for access to the internet, reports Sake, sister publication of Finance24.

    He said that overall the company agreed with the document released by Icasa last Wednesday.

    However, White said Telkom found it shocking that Icasa listened to lobby groups and other players or "people who have never run a network" and in the process, ignored the firm as an operator.

    He said Telkom has clearly proved that it does not receive a double income but merely recovers its costs.

    Icasa said elsewhere in the world, telecommunications firms do not charge a double levy. However, White claimed these companies merely bundle the costs and that consumers are still paying for both.

    He said "rash regulating" that would stop this practise would make it very difficult to justify expanding the ADSL service.

    I-Net Bridge reports Icasa received a total of 446 submissions as part of the enquiry into the provision of the ADSL service.

    Financial burden

    According to Business Day, several presenters argued during the public hearings that Telkom already charged R87 a month for renting the copper line. In addition Telkom charges an extra R270 to R480 a month, depending on how much bandwidth the line can carry.

    The regulator concluded that the charge for access should be levied at the inception of the ADSL - after which it should be restricted to line rental.

    The rationale behind the abolition of levy access charges, was that this rental (from R270 to R480 for householders) posed a financial burden.

    White said: "Their argument is incomprehensible and ludicrous. . . we'll contest it," noting that the abolition of the ADSL basic access rental would make it impossible for Telkom to recoup the expenditure on the infrastructure deployment which could therefore put the company in an awkward position of shutting down the service altogether.

    "You also have investors and shareholders to consider and 100 000 customers you are serving. What do you say to them?

    "You close down because you are not allowed to recover the R1bn you have invested?

    "We are unhappy about this. . . it will be impossible to carry on if we aren't allowed to recover our costs," he argued, adding that nowhere in the world is the basic access rental - in some form or another - not applicable.

    "What we have always maintained is that this is scalable.

    "So with more people signing up we'll continue to see price reductions."

    White said Telkom would accept some of the other planned regulations that deal with dropping prices and increased data limits that Icasa introduced, reports Sake. - Sake/I-Net Bridge

  2. #2

    Default

    There are several threads already discussing this topic

  3. #3

    Default

    I know, but this is just a statement as apposed to speculation.

    EDIT: APOLOGIES, i didnt see it in the other section.

    Is it possible to delete a thread?
    Last edited by nrg_wp; 03-08-2005 at 10:31 AM.

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