Telkom’s dubious broadband pricing claims
In a recent presentation Telkom’s Chief Sales and Marketing Officer, Godfrey Ntoele, claimed that Telkom’s Do Broadband Level 1 offering is of the most affordable in the world. In Ntoele’s International Broadband Benchmarking slide the Do Broadband Level 1 service is benchmarked against other broadband services in the Czeck Republic, Egypt, France, Italy, UK, Greece, Tunisia, Portugal, Morocco, Mexico, Poland, India, Chile and Hungary.
According to the presentation, Telkom’s broadband offering is the 7th cheapest among these countries, and more affordable than countries like Morocco, Portugal, Greece, Mexico and India.
Using suitable criteria
A closer look however reveals serious flaws in the international broadband benchmarking procedure used.
Telkom’s Do Broadband Level 1 offering has a speed of 384 Kbps and a monthly usage limit of 1 GB. To accurately benchmark worldwide broadband offerings both speed and usage limits must be taken into account.
It is noteworthy that these two criteria are not only used for broadband benchmarking, but are also used by Telkom for developing services and distinguishing on price. These two criteria are in fact a worldwide standard for distinguishing between the various broadband offerings in the market.
The cost per Mbps per month is a standard benchmarking system applied in unlimited usage environments, and Cost/Mbps/GB therefore becomes a relevant yardstick to use for broadband services where usage is limited or capped.
A true comparison
Telkom’s Do Broadband Level 1 – with a speed of 384 Kbps and a usage allowance of 1 GB – has a Cost/Mbps/GB of R 531-00. When compared to the other countries on the list this price can be considered to be very expensive.
The analysis further claims that Telkom’s Do Broadband Level 1 price is very close to what is on offer in the UK. It is assumed that Telkom benchmarked its entry level product against BT’s entry level product which costs R 253-00 per month (when no discounts are applied).
This service is however an 8 Mbps offering and carries a usage allowance five times larger than that of Telkom’s Do Broadband Level 1 offering. The British Telecom offering has a Cost/Mbps/GB figure of R6-33, over 80 times less than the R531-00 figure for Telkom’s Do Broadband Level 1 service.
Claims to be more affordable than countries like Chile, India and Morocco are also dubious at best.
In Chile the price for a 10 Mbps service with a 5 GB usage limit is around R 500-00, far less than Telkom’s 4 Mbps ADSL offerings. Chileans also have the option of a more affordable flat rated 128 Kbps offering for R183-00.
Morocco is even more affordable. Menara, the country’s largest ADSL ISP, has recently slashed the price of their unlimited ADSL 128 Kbps offering to a mere R 41-00 per month. The price for their unlimited 256 Kbps offering is just under R 130-00 per month.
Indians also have it far better than Telkom’s customers. India’s BSNL offers a 2 Mbit/s service with a 2.5 GB monthly usage limit for a mere R 68-00 per month. According to WikiPedia an unlimited 256 Kbps offering is priced at R 151-00 per month, far less than Telkom’s entry level offerings which all carry restrictive usage limits.
It becomes clear that the analysis used by Ntoele is very suspect and refuted by a simple Google search about worldwide broadband pricing.
Telkom explains
Telkom pointed out that a company called Africa Analysis did the research.
“The international bench marking was done independently by Africa Analysis. The entry level broadband offerings from different countries were used. The speed offerings were mainly in the 512 kbps range and allowable data volume varied from country to country,” said Lulu Letlape, Telkom’s Group Executive for Corporate Communication.
“The comparison was done to benchmark entry level broadband products, and not necessarily products similar in speed and volume capping. High volume caps, in the countries that have these offerings, are justified by their high local bandwidth usage,” Letlape concluded.
Africa Analysis said that they could not comment on this analysis as the work they do for a client is undertaken under a non disclosure agreement.
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