Naked ADSL
Since the launch of ADSL in August 2002 broadband subscribers have been asking for the choice to purchase ADSL as a standalone service thereby scrapping the analogue line rental.
While Telkom argued in the past that users are paying for two different aspects of an ADSL offering – i.e. the copper line and the ADSL ports and the like – many users feel that they are essentially paying for a phone service which they do not use.
Anti-Competitive?
Analogue line rental is interestingly enough the only part of Telkom’s ADSL pricing which increased over the years, and it is also the only part of an ADSL service which can not be resold by an ISP.
This means that Telkom is billing every ADSL subscriber directly, independent of whether they use Telkom Internet or a different ISP as their broadband provider. This gives Telkom an excellent opportunity to market other products to the ADSL user base and to even try to migrate ADSL subscribers from competing ISPs to its own offerings.
One industry player feels Telkom’s insistence on bundling a telephony service with its broadband offering may be anti-competitive as there are many VoIP providers like Vox Telecom and ECN which essentially compete against Telkom to provide voice services to ADSL subscribers.
ISPs asking for naked ADSL
The Internet Service Providers’ Association of South Africa (ISPA) said that they fully support a naked ADSL offering, and that Telkom’s insistence on bundling a voice service with every ADSL purchase is not supporting competition in the telecoms space.
MWEB CEO Rudi Jansen also supports a naked ADSL offering, saying it is one of the ways to make broadband access more affordable to South Africans.
Cost savings
A standard 384 Kbps ADSL user currently pays Telkom R131 to rent an analogue line and R152 for DSL384 access – a combined total of R283 which is well above the price of an uncapped ADSL account from MWEB at R219.
MWEB’s all-in-one price for an uncapped DSL384 service – which includes ADSL access and ADSL data – is R349 per month. This price is well below the ‘standard’ price of R502 which the service costs when including analogue line rental and purchasing ADSL access from Telkom.
Despite the demand for naked ADSL, Telkom is unlikely to relinquish the additional revenue of analogue line rental and simultaneously allow ISPs to completely ‘own’ an ADSL subscriber without a fight.
Telkom is already under financial pressure, and ADSL is one of the company’s biggest trump cards in the residential telecoms market. By allowing naked ADSL sales it will not only lose its one-bill advantage over ISPs, but also potentially miss out on lucrative voice revenue from ADSL users.
Naked ADSL << Discussion
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