Telkom and DoC in ‘conflict’ about broadband pricing

Recent statements from Communications Minister Ivy Matsepe-Casaburri surprised some telecoms experts, but what became blatantly clear is that Telkom and the Department of Communications, their biggest shareholder, do not agree on broadband pricing.

In her recent speech at the SA Communications Forum conference in Midrand she said: “The first is specific policy directives and the other specific interventions to increase access. It is clear that in order to address – in the long term – the question of cost, access will first have to be taken for granted by all citizens.”

“This means that, in addressing the cost of communications, we have to ensure broadband is not a scarce commodity, or a commodity to be enjoyed by a few who are privileged by either income and/or geographic location,” Matsepe-Casaburri said.

Telkom on the other hand made it clear that they are “not interested in taking the price right down to the floor” and that there will be no more drastic price cuts on their ADSL products.

This is in stark contrast to Matsepe-Casaburri’s comments, begging the question why government has failed to pull Telkom in line.

Poor performance by the DoC and ICASA

Many telecoms experts feel that the Department of Communications’ lackluster performance in the telecoms arena is directly linked to their shareholding in various operators like Telkom and Neotel and their related ‘managed liberalization’ policies.

With Telkom holding nearly all the cards in the broadband space and effective interventions like local loop unbundling and a competing international submarine fiber system many years away, not too much will change unless the DoC and ICASA crack down on Telkom and put measures in place to ensure true competition.

Here Matsepe-Casaburri said that “The days when companies literally held others hostage, because they owned the underlying infrastructure, are slowly becoming history. Like in the gas or oil industries, we are working towards a common open and non-discriminatory access infrastructure framework that is used at cost also in the ICT sector,” but unfortunately this kind of statement has been bantered around too often to impress many broadband stakeholders..

So while Telkom, a monopoly which government created, is raking in billions at the expense of businesses and consumers, the Department of Communications is yet again promising solutions, policy interventions and action.

Unfortunately action, and not the promise of action, is what is needed and this is generally where the problem lies.

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Telkom and DoC in ‘conflict’ about broadband pricing