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Telkom in storm over ’exorbitant’ online fees
Lesley Stones
Information Technology Editor
A REPORT slamming Telkom’s high-speed internet services as overpriced could trigger a legal battle, with Telkom saying it is “shocked” at the technical ignorance displayed by the industry regulator.
Telkom will take legal action against the Independent Communications Authority of SA (Icasa) unless it withdraws a move to prevent Telkom charging a monthly fee for its high-speed asymmetric digital subscriber line (ADSL) internet access.
Telkom is also threatening to scrap plans to invest billions of rand in a high-speed network and to sever its existing ADSL lines unless Icasa lets it charge a monthly rental. That would leave the country largely bereft of high-speed internet access crucial for business and leisure use.
So far Telkom serves almost 100000 users and has orders from an additional 19000 clients, says product development executive Steven White.
The reaction was provoked by Icasa’s findings after hearings into the cost and quality of ADSL services. Telkom’s fees were “exorbitant” compared with other countries, Icasa said. It was also imperative to give its customers more bandwidth, instead of capping users to downloading 3GB of data a month.
But the most crippling blow is a decision that Telkom should charge a one-off fee for installing the high-speed service, and not charge any continuing line rental.
Yesterday White criticised that as “a decision by people who don’t understand how these things work”.
The service is supplied by converting a normal copper phone line to carry high-speed data.
During the public hearings, several presenters argued that Telkom already charged R87 a month for renting the copper line, and had no right to charge an extra monthly fee to cover the conversion cost. Telkom charges an extra R270 to R477 a month, depending on how much bandwidth the line can carry.
“Icasa says it is going to prohibit us charging for ADSL line rentals and that’s obscene,” White said. “Telkom has invested R1bn in capacity and committed many more billions in funding, and there’s no way we can make that investment if Icasa is allowed to make these regulations.
This will have a profound impact on the country and the economy, and Telkom will fight tooth and nail against this because it’s not been well thought out,” he said. “We’d … be forced to pull the plug on the whole service.”
The issue is potentially so damaging to Telkom that its “highest echelon” — probably CEO Sizwe Nxasana — is understood to be contacting Icasa personally.
“Failing that we will have to take it head on,” said White. “We don’t have a problem with Icasa making regulations — what we can’t have is a regulator making rash, wild statements like this.”
The equipment and maintenance needed to supply ADSL was so costly and complex that Telkom could not cover its costs without the monthly fee, he said.
Yesterday Icasa did not respond to a request for comment.
The original complaints about the service were made by MyADSL, an online forum for Telkom customers. Yesterday MyADSL member Roelf Diedericks said he welcomed Icasa’s report as it showed that Telkom had been unable to justify its costs or its bandwidth limitations.
MyADSL has described Icasa’s report as “hard hitting” in finding that the access charges were not justifiable, the bandwidth cap was inadequate, and that Telkom should be obliged to guarantee certain levels of service no matter how many people used the bandwidth simultaneously.
“If these measures are fully implemented we can expect the broadband landscape to change significantly. The two major shifts expected are a big reduction in the price of ADSL, and the general service should improve significantly,” said MyADSL spokesman Rudolph Muller.
“These changes will stimulate broadband uptake in SA which in turn will boost the economy. ADSL access will also be more readily available and not only something that is enjoyed by the privileged few,” he said.
However, Telkom has received unexpected support from some MyADSL users. One posting on the MyADSL website said Icasa’s report had not been written by anyone knowledgeable in network design. If Telkom could not charge for ADSL access, who would pay for the maintenance and upgrades, the user asked. “I would be surprised if they don’t halt their broadband roll-outs if the capex and operating expenses are not recoverable,” he said.
White said the Icasa hearings had been staged almost two years after the original complaints from MyADSL, and during that time the cost of its services had more than halved. Telkom had not expected Icasa to find much fault with the service, he said.
Telkom in storm over ’exorbitant’ online fees
Lesley Stones
Information Technology Editor
A REPORT slamming Telkom’s high-speed internet services as overpriced could trigger a legal battle, with Telkom saying it is “shocked” at the technical ignorance displayed by the industry regulator.
Telkom will take legal action against the Independent Communications Authority of SA (Icasa) unless it withdraws a move to prevent Telkom charging a monthly fee for its high-speed asymmetric digital subscriber line (ADSL) internet access.
Telkom is also threatening to scrap plans to invest billions of rand in a high-speed network and to sever its existing ADSL lines unless Icasa lets it charge a monthly rental. That would leave the country largely bereft of high-speed internet access crucial for business and leisure use.
So far Telkom serves almost 100000 users and has orders from an additional 19000 clients, says product development executive Steven White.
The reaction was provoked by Icasa’s findings after hearings into the cost and quality of ADSL services. Telkom’s fees were “exorbitant” compared with other countries, Icasa said. It was also imperative to give its customers more bandwidth, instead of capping users to downloading 3GB of data a month.
But the most crippling blow is a decision that Telkom should charge a one-off fee for installing the high-speed service, and not charge any continuing line rental.
Yesterday White criticised that as “a decision by people who don’t understand how these things work”.
The service is supplied by converting a normal copper phone line to carry high-speed data.
During the public hearings, several presenters argued that Telkom already charged R87 a month for renting the copper line, and had no right to charge an extra monthly fee to cover the conversion cost. Telkom charges an extra R270 to R477 a month, depending on how much bandwidth the line can carry.
“Icasa says it is going to prohibit us charging for ADSL line rentals and that’s obscene,” White said. “Telkom has invested R1bn in capacity and committed many more billions in funding, and there’s no way we can make that investment if Icasa is allowed to make these regulations.
This will have a profound impact on the country and the economy, and Telkom will fight tooth and nail against this because it’s not been well thought out,” he said. “We’d … be forced to pull the plug on the whole service.”
The issue is potentially so damaging to Telkom that its “highest echelon” — probably CEO Sizwe Nxasana — is understood to be contacting Icasa personally.
“Failing that we will have to take it head on,” said White. “We don’t have a problem with Icasa making regulations — what we can’t have is a regulator making rash, wild statements like this.”
The equipment and maintenance needed to supply ADSL was so costly and complex that Telkom could not cover its costs without the monthly fee, he said.
Yesterday Icasa did not respond to a request for comment.
The original complaints about the service were made by MyADSL, an online forum for Telkom customers. Yesterday MyADSL member Roelf Diedericks said he welcomed Icasa’s report as it showed that Telkom had been unable to justify its costs or its bandwidth limitations.
MyADSL has described Icasa’s report as “hard hitting” in finding that the access charges were not justifiable, the bandwidth cap was inadequate, and that Telkom should be obliged to guarantee certain levels of service no matter how many people used the bandwidth simultaneously.
“If these measures are fully implemented we can expect the broadband landscape to change significantly. The two major shifts expected are a big reduction in the price of ADSL, and the general service should improve significantly,” said MyADSL spokesman Rudolph Muller.
“These changes will stimulate broadband uptake in SA which in turn will boost the economy. ADSL access will also be more readily available and not only something that is enjoyed by the privileged few,” he said.
However, Telkom has received unexpected support from some MyADSL users. One posting on the MyADSL website said Icasa’s report had not been written by anyone knowledgeable in network design. If Telkom could not charge for ADSL access, who would pay for the maintenance and upgrades, the user asked. “I would be surprised if they don’t halt their broadband roll-outs if the capex and operating expenses are not recoverable,” he said.
White said the Icasa hearings had been staged almost two years after the original complaints from MyADSL, and during that time the cost of its services had more than halved. Telkom had not expected Icasa to find much fault with the service, he said.
