Telkom ADSL speed upgrade: cautious optimism

Telkom’s possible upgrade of entry-level ADSL speeds from 2 Megabits per second (Mbps) to 4Mbps could be good for both consumers and Internet service providers (ISPs).

However, ADSL service providers have warned that whether the upgrades cause more good than harm is dependant on a number of factors.

When Telkom last doubled entry-level ADSL speeds from 1Mbps to 2Mbps between November 2013 and February 2014, a number of ISPs decried it as part of a margin squeeze tactic.

ISPs were asked for their take on possible further upgrades, following Telkom’s confirmation that it is investigating an increase in entry-level ADSL speeds from “up to 2Mbps” to “up to 4Mbps”.

Mweb: Derek Hershaw

Derek Hershaw Mweb
Derek Hershaw

The CEO of Mweb ISP Derek Hershaw said that he is all for the upgrade, provided:

  1. Telkom’s network is actually capable of supporting 4Mbps as their entry-level speed.
  2. Telkom reduces the wholesale price of IP Connect (IPC, Telkom’s wholesale DSL product).

“I’d like to see what their plans are to cater for this extra demand on their network,” Hershaw said, adding that a decrease in IPC costs would let them reduce data charges along with line access fees.

Cybersmart: Laurie Fialkov

Laurie Fialkov
Laurie Fialkov

Cybersmart boss Laurie Fialkov warned that a doubling of line speed without an IPC price cut would actually be bad for ADSL users, particularly those on uncapped packages.

“If you double the access speed and don’t change the IPC cost you double the contention for the uncapped users,” Fialkov said.

Contention refers to the number of users competing with one another for bandwidth.

Not all Internet users need to use the maximum capacity of their connection all the time, and ISPs exploit this fact to be able to price services at affordable levels.

“Upgrades are good assuming we are still able to keep the quality of the bandwidth the same,” Fialkov said. “Last time this happened it came with a minuscule IPC discount.”

Not any discount in IPC cost will do either. If speeds double, Fialkov called for a halving in Telkom’s wholesale costs for DSL capacity.

Anything less would result in either poorer service, or higher prices on entry-level uncapped ADSL.

“Entry-level users do not want to pay more, nor should they have to,” Fialkov said.

He went on to say that he believes the increase in speed is being subsidised by an increase in telephone line rental.

“So for my money, I would prefer that Telkom leave the speed and the IPC pricing alone and remove the mandatory telephone line rental,” Fialkov said.

Web Africa: Tim Wyatt-Gunning

Tim Wyatt-Gunning
Tim Wyatt-Gunning

Tim Wyatt-Gunning, CEO of Web Africa, re-iterated the concern raised by Hershaw, saying the upgrades would be great, provided that all of Telkom’s infrastructure can handle it.

“In practice, as we have seen before, phasing out lower speeds is often accompanied by a period where the customer gets nothing like the new higher speed they have been promised, usually due to congestion at the local Telkom exchange,” Wyatt-Gunning said.

“As long as Telkom can deliver on its promises, we approve.”

Wyatt-Gunning added that the upgrade would be good for consumers provided it comes without an increase in line rental charges.

He also voiced his hope that any upgrade would be accompanied by a reduction IPC costs, which would let them offer higher speeds at better prices for uncapped ADSL subscribers.

“As for our capped customers: the faster the speed, the more the data they consume, the happier we are,” Wyatt-Gunning said.

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Telkom ADSL speed upgrade: cautious optimism