ADSL: Put a cap on it, says Telkom

MWEB shook up the ADSL market in March when it launched its affordable, uncapped ADSL services.  Many Internet Service Providers (ISPs) were quick to follow suit with their own uncapped ADSL accounts, but to date Telkom has not reacted neither in terms of price reductions or bundle size increases.

Instead of making their ADSL offerings more attractive, Telkom went on the offensive.  They took aim at MWEB and other ISPs, which offer uncapped ADSL services, in its first newsletter.  Entitled “Broadband:  Put a cap on it”, Telkom warns consumers that ‘unlimited and unrestricted’ Internet access is not what it proposes to be.

According to Telkom “the introduction of Uncapped Broadband was supposed to bring with it pure Internet joy – but it’s become very clear that all that joy is subject to terms and conditions that are hidden in small print”.

“It’s unfortunate, but that is what you get when you buy Uncapped Broadband in South Africa.  Many service providers talk the talk, but they don’t deliver on their promise,” Telkom says in its newsletter.

Telkom continues by comparing its prices to MWEB’s uncapped ADSL one-price bundles, but here many observers may question Telkom’s claim of comparing ‘apples with apples’. 

Telkom points out that it’s ‘Do Broadband Level 1’ service offers ADSL access, 1 GB of blended data and 10 GB of local data for R199.  Throw in another gigabyte of blended data for R64.76, and you get 2 GB of blended/international usage for R263.76.

Telkom argues that this is a better deal than MWEB’s 384 Kbps all-in-one uncapped ADSL offering for R349 per month, but this is hardly comparing apples with apples.  With MWEB’s uncapped service users can, and often do, use tens of gigabytes per month – making it far cheaper for these users than Telkom’s offerings.

Even in the event of low monthly usage the extra money for an uncapped service is often invested by consumers not for the purpose of high usage, but rather for the freedom of not worrying about being capped when they exceed a certain limit.

It is strange that Telkom has opted for this marketing strategy rather than focusing on their real strength:  quality of service and a single bill.  It is no secret that Telkom/SAIX’s ADSL bandwidth stacks up well against other offerings, making it popular among some consumers despite its higher cost.

Telkom has also fallen well behind the current standards in terms of ADSL data prices, and has not responded to the ADSL price war over the last seven months which saw prices drop by more than 50%.

Telkom is however expected to announce higher ADSL data packages and higher ADSL speeds at its annual results presentation on Monday, something which has been on the horizon for many months.

If Telkom however decide to delay this announcement further many consumers may respond to Telkom’s ‘Broadband: Put a cap on it!’ campaign with the words of one of MWEB’s uncapped advertisements:  “I will pop a cap in your ass!”

Broadband, ADSL and caps << comments and views