ADSL cost after 1 August 2013

Ecco said:
Telkom just make themselves more and more un-competitive against the cellular providers. For R300 you can get Netcomm MyZone Wi-Fi Router on SmartData 2GB + GigaNite 10.

They should really be reducing their prices to stay competitive - they now need to focus on increasing sales rather then revenue.
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You can't compare cellular networks to ADSL. I just moved house and waiting for ADSL and 3G is terrible for anything besides web surfing.
 
Abe said:
That network was paid for with our money (taxpayers) and then handed to Telskum on a silver platter. It's one thing to maintain a network and another thing to build a new network entirely. If the maintenance of the copper network was just a burden on Telkom, why do you think they are fighting LLU so much?
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This particular myth surfaces so often it isn't even funny. Taxes were not used to build the POTS network in South Africa - unlike in many parts of the world. The Post Office was a government department which had a telecommunications director who had to build the public switched telephone network on an entirely self funded proposition and subject to the occassional ministerial direction - such as requiring a special lower tariff for MPs Cape Town house and allowing the electricity commission to establish their own private network but not businesses. One of the effects of this was that our POTS network was from inception pricey. The effects of state power in the form of servitudes etc ... was enjoyed by the PO although in reality most of those benefits are now applicable to all ECNS licence holders.
Telkom's fight against LLU is misguided - and I think a lot of people in Telkom acutely understand this - and it is driven by the misconception that LLU would be a new regulatory intervention which will incur costs and undermine profitability. The misconception is not helped by the standard arguments from other industry players who have shown themselves to be all to happy to rent seek and cherry pick. The truth is that the ECA contains mandatory facilities leasing between players; Telkom has an equal right to demand access to Vodacom and MTNs mast infrastructure on lease to install LTE infrastructure as Neotel and Mweb have to demand access to lease copper lines in the last mile. Because there is no monopolistic right of use arising from the ownership of facilities the effect of market forces is that Telkom in collaboration with other service providers to construct a wholesale provisioning system. Some of the players want the regulator to force Telkom to conduct such a split - I disagree with this call because history shows that mandatory and regulatory driven splitting of firms leads to more problems than solutions - and Telkom has in essence agreed to go the route of greater wholesale disentanglement with their settlement with the Competition Commission. In essence I think the core fight for LLU has actually been won and we are sitting with the new problem created by MSAN rollout: remember the CCC has already fined Telkom 50k IIRC for not making facilities available.

Ecco said:
And how are the cellular networks funding their networks? Cost money, but they also making money, and they also reducing prices.
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The cellular networks are not maintaining a network physical the size of Telkom's network; hell if customer premises on a cellular network go on the blink the customer walks into your store and fixes it - good luck asking customers to march to a Telkom direct store with their copper line. Also Telkom is running the most competitive cellular network at the moment so the comparison is artificial. Cellular communications is particularly well geared towards servicing low ARPU customers whereas the ARPU required to make a fixed network viable is in orders of magnitude larger.

MickeyD said:
Telkom should stop providing services in low revenue-generating areas...
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and other players in the market need to innovate and unlock the benefits of fixed line. If you aren't making phone calls or downloading in excess of 10gigs a month what the hell is the purpose of a phone line.
 
Paul Hjul said:
The cellular networks are not maintaining a network physical the size of Telkom's network; hell if customer premises on a cellular network go on the blink the customer walks into your store and fixes it - good luck asking customers to march to a Telkom direct store with their copper line. Also Telkom is running the most competitive cellular network at the moment so the comparison is artificial. Cellular communications is particularly well geared towards servicing low ARPU customers whereas the ARPU required to make a fixed network viable is in orders of magnitude larger.
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Current trends suggest more and more people are not taking up telkom lines because they just use their cellphones. And why, cellphone rates are getting cheaper and cheaper - including data. That massive network telkom spends money to maintain is partly idle.

Surely by reducing the rates they can encourage more sales - people to take up their services, and in turn start seeing some more revenue - which in turn can be used to pay for that network.

Maybe i am wrong, but keen to hear your thoughts.
 
R10 per person add it all up
lets say theres 50mil ppl in sa
and only 10mil of them use telkom and pay R10 more

thats 100mil more pm in telkoms pocket...
 
Ecco said:
Current trends suggest more and more people are not taking up telkom lines because they just use their cellphones. And why, cellphone rates are getting cheaper and cheaper - including data. That massive network telkom spends money to maintain is partly idle.

Surely by reducing the rates they can encourage more sales - people to take up their services, and in turn start seeing some more revenue - which in turn can be used to pay for that network.

Maybe i am wrong, but keen to hear your thoughts.
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I don't think that you are wrong at all - and in fact I argue this same thing with a certain proviso:
lowering prices to encourage usage works if the product has the demand to back it and there are price thresholds which can have a major impact on demand (elasticity is complex ....). So lowering analogue voice rental by R10 won't see an increase in uptake of voice customers and nor will increasing analogue voice rental change the uptake of voice customers. The important number to look at is the entry point for DSL based broadband which is what needs to decrease in order to see an increase in uptake in DSL products and services. Voice is on its way out as a revenue source and the low call volume clients universally get a better deal on radio based offerings. So the important question is what strategy lowers the price of DSL products - - dropping the ADSL rental does and dropping IPConnect charges. The point being that if they increase the voice line rental by R50 and decrease ADSL line rental by R50 the cost for ADSL stays the same. In this case they have proposed - and remember there are regulatory issues a foot a small increase - I'd like a small decrease - but they are also aggressively restructuring the pricing model (but phasing in new pricing may take time).

Now tied to this is the barrier to entry which the mandatory analogue voice line provides - in other words what impact does the monthly subscription have on uptake and would lowering this rate lead to an increase in uptake. I don't believe that any more people will subscribe to ADSL services through an ISP if their basic bill to Telkom is R50 rather than the ~R150 which is will be, that amount needs to be Zero for it to have an impact. I strongly suspect that there are about 100k potential ADSL subscribers who are willing and able to pay R700 a month all inclusive for DSL to an ISP but will not pay a cent to Telkom or are unable to secure a Telkom account (outstanding debt with Telkom for example). So the only solution is for Telkom to rent the whole line out to ISPs on a wholesale basis - which I have repeatedly advocated.

What Telkom urgently needs to get is a pool of residential customers with a monthly account of ~2k a month and the way to do this is to offer more value - - unlimited calling options to any number, VoIP services, convergence, hire-purchase value, gaming solutions etc ...

Large parts of the copper network are only maintained because Telkom is being stupid and they should retire those legacy components to cut maintenance costs but this will mean that universal fixed line access was bull**** and may have staffing implications. All indications are that they are doing so.
 
cozinsky said:
The prices are still too high. Many of my friends miss out on ADSL because they simply can't afford to pay R600 odd a month for ADSL. There will not be high market penetration as long as these prices remain high. The solution is naked ADSL. It will cause a huge uptake on ADSL which transmutes in higher profit margins for Telkom.
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Entry level do package is R400 a month and has a soft cap after that. You can even get away with less. Yes it is still expensive but R600 is not the starting point.
 
Here we go - Telkom will end up just like another Eskom and SAA... constant hand-outs needed by the taxpayer. They have hardly made any improvements on their network that is beneficial to their clients and we still await 10mbps in most areas - a good few years after the initial announcement. :mad:
 
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