Cheaper broadband

[Sneeky]

Some articles from rpm on Moneyweb

The Independent Communications Authority of South Africa (Icasa) recently released its ADSL Draft Regulations aimed at improving the quality of Telkom’s ADSL service and providing a more affordable product for the South African public.

The initial complaint was lodged in February 2004 and it was only in December 2005 that the draft regulations were released.

But it is not only the slow regulatory process which is holding matters back, Telkom has also proved to be stubborn regarding telecoms changes. Telkom’s only response to these regulations was that ‘it is not do-able’.

There is a very good reason behind the incumbent’s refusal to bend and it all comes down to rands and cents. It makes sense for the only fixed-line provider to stall, which is what analysts have predicted.

A long, arduous legal battle is bad for the country and bad for the reputation of the Regulator, but this will not be the first time Telkom uses litigation to attain its ends.

The battle lines are not neatly divided between the regulator and Telkom. The Department of Communications (DoC) hosted two telecommunication colloquiums to discuss the price of telecommunications in South Africa. Experts presented conclusive evidence that South Africa is falling behind international competitors and the reason is a lack of competition which has resulted in exorbitant prices.

The South African economy is haemorrhaging as Telkom demands its pound of flesh, but the DoC is slow to act in what can be seen as an economic emergency. Speculation in the industry is that the DoC is in a bit of a quandary. Government is the majority stakeholder in this R8bn per year profit-making machine and should they take action it may result in huge losses. The dilemma is how to ensure that those profits continue to roll in while still protecting public interest.

A possible solution which the DoC continues to tout is the SNO (Second National Operator). We should see wholesale bandwidth prices fall when it enters the market. But it is highly unlikely that the SNO will be able to drive down telecoms costs.

When will we see cheaper broadband? We can only hope that Papi Molotsane, CEO of Telkom, was serious when he said that he will make it unnecessary for Icasa to bring in regulations, since he will already be in line with what is expected

http://www.moneyweb.co.za/shares/ict_sector/821385.htm

 

[caroper]

Good Article, well done RPM

 

[Debbie]

Yeah nice and easy to read.

 

[BroadbandStarved]

"...the DoC is in a bit of a quandary. Government is the majority stakeholder in this R8bn per year profit-making machine and should they take action it may result in huge losses."

What government doesn't realise is that by allowing for true competition in the market, the cost of Telecoms will decrease in this country which will help spur economic activity, (especially amoungst SME's), this in turn will help drive the economy toward reaching the targeted 6% growth rate which in turn means that SARS is able to collect more money, which in turn means that government will not therefore be making huge losses but instead have more funds available. Not to mention the other ripple effects that it will have on society in general i.e. bigger economy, means more jobs, more jobs mean less crime, less crime means better society and a better society means a more stable political environment which ultimately means a more favourable international perception and more foreign investment.

 

[Sneeky]

Quandary is an understatement.
I guess that there are way to many important and influential people/organisations that are heavily invested in Telkom for any meaningful change to take place.
A bit worrying if we have all this wealth built on the back of an institution that is being falsely propped up by the DoC, where it's profits are really not sustainable in a deregulated market.