Telkom announced on 23 April it will implement numerous wholesale price reductions across its broadband products from 1 May 2015, including ADSL, VDSL, and fibre.
Internet service providers buy bandwidth on Telkom’s last-mile access networks for DSL and fibre services through a product called IP Connect (IPC), which is set to see a reduction of between 1.4% and 63%.
The size of the reduction is determined by the volume of bandwidth a service provider buys from Telkom, with smaller ISPs set to benefit more than larger competitors from the next round of price cuts.
Telkom said its intention with balancing the price reduction in this way was to stimulate the lower-end of the DSL market.
“Service providers that only target niche areas now can re-enter the ecosystem,” said managing director of Telkom wholesale services Prenesh Padayachee.
ISPs that buy a large volume of bandwidth can still benefit from a promotion Telkom is running from 1 May until the end of July 2015, though.
Telkom said the promotion will allow ISPs to double the amount of IPC bandwidth they have “for an incremental cost.”
Asked what the effect of this promotion might be for larger players in the market, Telkom said companies with large volumes of IPC could effectively lower their cost per Megabit per second by 80%, after all reductions were taken into account.