Article: Telkom SA cuts broadband prices

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MaD

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S.Africa's Telkom cuts broadband prices

Thu February 24, 2005 10:05 AM GMT+02:00
JOHANNESBURG (Reuters) - South African fixed-line phone operator Telkom will cut prices for broadband Internet access from March 1 after winning more than 50,000 customers, the group said on Thursday.

Telkom said it would reduce the monthly cost for BusinessDSL 512 to 699 rand a month from 800 rand and HomeDSL 512 to 599 rand from 680 rand. HomeDSL 384 remains unchanged at 449 rand.

"We continually evaluate our costing and with the anticipated growth, we expect further price adjustments going forward," Telkom Chief Executive Sizwe Nxasana said in a statement.

Telkom is under pressure to cut prices after the government opened South Africa's telecoms industry to rivals with effect from February 1.

Telkom first cut broadband prices last September but critics have said broadband prices in South Africa are still very steep compared to Europe and the United States where ADSL access could be had for as little as $20 a month.

Shares in Telkom were 0.79 percent stronger at 113 rand while the Johannesburg Stock Exchange's Top-40 index rose 0.48 percent.
 
When I saw the topic I knew I shouldn't hold my breath. Why can't they cut HomeDSL 384? It's still a ripoff...
 
Amazing what mounting pressure as well as competition from Sentech, Vodacom and iBurst can do.

The question is when will Sentech, Vodacom and iBurst drop their prices?

And will the pressure on Telkom to stop overcharging for ADSL keep up?
 
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Telkom is under pressure to cut prices after the government opened South Africa's telecoms industry to rivals with effect from February 1.
Click to expand...
and their share price is at an all time high?
 
Now they just need to pay some attention to their cap. I can just see tomorrows headline: "Telkom announces uncapped ADSL for all"

/me stops dreaming
 
dominic said:
and their share price is at an all time high?
Click to expand...
They just announced that they now have 50 000 DSL subscribers...thats a big jump from the 20000 that they had a year or two ago...
At an aggregated R500 pm pp for line rentals, you're looking at revenue stream of R25 mil per month...

That means a revenue stream of R300 million a year from DSL line rental only.
It may be nothing compared with their overall earnings, but its growing at 50% per year...u do the math ;)
 
Telkom are devious buggers. I bet for ever person now paying less for 512 another 384 customer will upgrade to the higher speed. They should't lose much revenue.
 
What happens to current subscribers though - do they still get charged the current price or do they get charged less?
 
lewstherin... I love your calculations! Just goes to show how much these *(&%^(() are getting out of the public. And I'm almost certain that operating costs for ADSL are nowhere near that figure - once again lining the shareholder's pockets. But I believe that their day will come - and they will be begging us to take up their services, upon which we will all turn a blind eye and say, "@(#@^&) You"... Nothing will be more sweet... Can't wait!!!
 
As far as I know Telkom employees are entitled to get ADSL installed at their homes for half price, and they probably still make a profit on that. Imagine how cheap they could offer it for if they wanted/were forced to.
 
afaik Telkom employees get R100 off line rental..
 
Le fine print:

* Price inclusive of VAT. DSL 512 discounted from 1 March 2005 - August 2005. Excluding ISP costs, installation, dependent on availability.
Click to expand...

The R599 party only lasts till August.
 
It seems strange, but I reckon as more deregulation and competition comes in, we need to start watching Telkom to make sure they don't become too cheap. It'll most probably never happen, but I reckon we could be in for a cheap broadband bonanza for a year or two while Telkom offers lower and lower prices and higher caps. My only fear is that they will offer broadband services dirt cheap at a huge loss, just to keep the competition out. It'll be great for a while but what happens once Telkom has used it's vast resources to provide cheap ADSL at a loss for a few years, to the extent that nobody else can compete and we're stuck again with an effective monopoly? There should be a regulation that Telkom may not under any circumstances deliberately provide any service at a loss if there are other companies competing to provide the same service.
 
IMHO, sustained actions to increase barriers to entry through price manipulation, is a self-defeating mechanism. Consumer resistance is the balancing factor, even in the face of lack of choice - once something has been provided at a cheaper price, expectation levels have been set higher, so re-creation of a monopolistic scenario will be exceedingly difficult, if not impossible. Don't worry about the possibility, however - the rate of technological change and technological alternatives will prevent this from ever happening, methinx...
 
It is some good news at least they have reduced the price - but I'm wondering if the infamous 3GB will be lifted....
 
Dominic Rooney said:
It is some good news at least they have reduced the price - but I'm wondering if the infamous 3GB will be lifted....
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They shouldn't make it uncapped (as if they ever will) but rather increase it to 10GB BUT then count international separately.. at the moment they're riding us like a cheap pony with the whole national/inernational upload/download story.

Well.. not that I have ADSL mind you.. I pay less for my connection than I spend at the pub in a night which is the way it should be.. kinda the same ppl in just about every other country :eek:
 
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Mad, capping shouldn't be a requirement. Only P2P shaping.
 
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