Telkom has filed for price reductions with ICASA (the Independent Communications Authority of South Africa) with the main beneficiaries being the ‘line rental’ charge of their ADSL service.
An average reduction of 24% across all ADSL access charges are expected, with a maximum reduction of around 32%. These changes are expected to become effective as of 1 August 2006.
Furthermore the monthly rental for residential ISDN services will drop by up to 20% and there will be a decrease of up to 39% in the rates for IPLC’s (International Private Leased Circuits).
Long distance and international call charges will drop. Long distance calls will drop by 10% costing 72c per minute during Standard Time and 36c per minute during Callmore Time.
International calls will drop by 9.9% in the average price per minute with calls to the US costing 99c per minute during Global Off-peak Time and R1.20 in peak hours. Calls to the UK are slightly more expensive at R1.30 in off-peak and R1.40 in peak hours.
The fact that only long-distance and international call rates are dropping may be testimony to the impact that VOIP (Voice over IP) is having on the voice market. Many South Africans with adequate Internet connections, generally an ADSL service, are now using SkypeOut which is free if used from PC to PC and from a PC to a telephone can cost as little as 13c per minute.
Telkom has also recently come under fire at the ICASA ADSL pricing hearings for their high tariffs for ADSL services. One of the factors pushing up the price is the high charge for line rental which only Telkom receives. This is currently the R477 for the 512 DSL service or the R680 for the 1024 DSL offering.
The proposed DSL 192 and 384 monthly rental is R245 from 1st August 2006 – a price decrease of R25 (9.3%) on the former and R114 (31.8%) on the latter.
"We are combining our DSL 192 and DSL 384 services, and DSL 192 customers will automatically be upgraded in due course to an up-to 384kbit/s service, depending on network infrastructure. In future, business customers will also be able to subscribe to the DSL 384 service," explained Steven Hayward, Telkom’s Managing Executive for Retail Marketing.
Reductions in line rental for their flagship service, the 1024 DSL offering, will fall by 24.1% (R164 per month) costing R516. The 512 DSL service will also drop from the current price of R477 to R362 per month (also a 24.1% reduction).
The news for consumers is all round good with the end user set to benefit from Telkom’s proposed reductions. In the long run it could turn out to boost Telkom’s revenue with more users able to hop on board.
Telkom customers are set to benefit from overall price reductions from August this year if price changes filed by the telecommunications giant are approved by the Independent Communication Authority of South Africa (ICASA).
Telkom filed an overall price decrease of 2.1% with ICASA this morning. If accepted, the proposed price changes will become effective from 1st August 2006.
"Telkom is committed to its customer centricity drive and we are certain that the proposed price changes made to ICASA will result in significant savings for all our customers," said Hayward.
Reductions in the price of Telkom’s voice and data services have been on the cards for a long time and since the new CEO’s arrival consumers have been waiting for evidence of his new consumer-centric approach.
This is the first measurable sign that Papi Molotsane has made towards giving customers what they really want – lower prices.
It is however disappointing that customers had to wait since August last year for the next price reduction, and that it will effectively be a year since the previous ADSL reductions before consumers benefit from this announcement.