New ADSL caps and pricing
Telkom filed their latest tariff adjustments last week with the Independent Communications Authority of South Africa (ICASA). The new prices, which are set to kick in on 1 August 2009, see an overall increase of 1.7% in Telkom rates.
Telkom further announced that the monthly subscription charges for DSL, Do Broadband and TelkomInternet remain unchanged. But there were one or two changes – Telkom announced that they would upgrade the TelkomInternet all access 2 GB and 3 GB standard packages to 3 GB and 5 GB respectively. Local bandwidth limits of 20 GB and 30 GB respectively remain unchanged.
The bandwidth increase may however not be as promising as it sounds.
Telkom currently has a ‘soft cap’ and a monthly ‘threshold value’ which means that ADSL users can exceed their monthly bandwidth usage limit without being cut off immediately. Anecdotal evidence suggests that users are allowed approximately 150% of their allotted monthly cap before being limited to local-only bandwidth.
When the new prices kick in on 1 August the more lenient capping regime will come to an end. “The threshold will no longer exist and user accounts will be capped at the exact values,” Telkom said.
If hard capping is introduced on all TelkomInternet and Do Broadband accounts, most subscribers will not really benefit when Telkom’s new pricing kicks in.
The first disadvantage to ADSL users is that the cost of postpaid residential and business line rental charges will increase by 5.5%. This means that the monthly residential analogue line rental cost will increase from R 124.20 to R 131.03. Business users will pay R 174.08 instead of the current R 165.00 monthly rental charge.
Telkom’s 1 GB account holders will be the worst affected by the latest pricing changes in 1 August. Instead of the typical 1.5 GB threshold usage limit these users may be cut of strictly at 1 GB, not only removing the benefit of Telkom’s lenient capping but also increasing the overall cost of the service because of the higher line rental charges.
2 GB account holders will essentially get the same amount of bandwidth per month (3 GB), but will have a slightly higher overall cost for their service.
3 GB Telkom subscribers will now get 5 GB, around 500 MB more than the typical 4.5 GB where most users are currently capped. This compensates for the R 6.83 increase in line rental charges.
Pricing comparison
The benefit of the new higher usage limits from Telkom is that users are now assured of higher monthly caps while it was previously a gamble as to when the floodgate would close. The added bonus of large local bandwidth allowances is something which many current Telkom subscribers find of value.
The higher official 3 GB and 5 GB caps make Telkom more competitive in the current ADSL market. Telkom will in future charge R 149.00 for a 3 GB account, lower than Axxess’ price of R 179.00 and Web Africa’s rate of R 199.00 per month.
Telkom’s price for a 5 GB account will be R 239.00 from 1 August, significantly lower than Web Africa’s R 290.00 and Axxess’ R 299.00 for the same usage limit.
When it comes to Telkom’s 1 GB account, which retails for 79.00 per month, it is less attractive than the higher usage offerings. Axxess sells 1 GB month-to-month accounts for R 59.00 per month while Web Africa is also cheaper at R 70 for a 1 GB account.
New ADSL cap and pricing – give your views
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