Broadband basics and uncapped ADSL

It is well known that Telkom has been investigating the feasibility and demand for uncapped ADSL services, but consumers should not expect an uncapped ADSL product from Telkom soon.

Dr Brian Armstrong, Senior Managing Executive for Enterprise Markets at Telkom, recently told MyBroadband that they researched the demand and feasibility of an uncapped ADSL solution, but found that there is not sufficient demand for an uncapped ADSL product.

Armstrong explained that only 3% of their current 9GB ADSL subscribers exceed their cap, which points to the fact that their current account sizes are adequate for most of their subscribers.

This conclusion from Telkom is strange considering that over 50% of MWEB’s ADSL subscribers migrated to their uncapped ADSL products in the first year despite the fact that it costs significantly more than MWEB’s traditional capped products.

Most ISPs in South Africa – including Vox Telecom, MWEB, Afrihost and Cybersmart – agree that there is a strong demand for uncapped ADSL, begging the question whether Telkom is misguided in their conclusion that there isn’t sufficient demand for uncapped ADSL to justify offering such a service.

One industry layer has even suggested that it is great news for other players that Telkom has not cottoned on to the pent-up demand for high end broadband services, and their main concern is that Telkom may wake up somewhere along the line.

When asked about MWEB’s success in the ADSL market with their uncapped offerings, Telkom’s Armstrong said that MWEB’s services most likely make sense as a bigger Naspers strategy, but that it is not the case for Telkom.

Telkom punts capped ADSL

Telkom has gone on the offensive against uncapped ADSL products in its latest marketing campaign, punting the benefits of capped ADSL accounts.

In Telkom’s ‘Broadband Basics’ article (scanned copy here), in the company’s 365 magazine, two people give their views on capped ADSL, trying to convince readers that capped ADSL provides cheaper and better access than other options.

“We’ve only ever reached our cap once, and that was when we had overseas visitors using our broadband as well.  A 3GB capped data subscription is enough for us,” said ‘Lynda Harvey’.

“I like capped ADSL because you get what you pay for. It’s the cheapest internet access you can get,” said ‘Johan Hammes’.

The article continues to punt the benefits of capped ADSL through its ‘The pros of capped ADSL’ section in the article (scanned copy here):

1. It offers you consistently fast internet speeds throughout the month
2. It’s affordable
3. It allows you to determine and stick to a monthly internet budget by deciding how much data you can afford per month.  There is no risk of overspending on data.

It is however perplexing that Telkom claims that a benefit of capped ADSL accounts is to determine and stick to a monthly budget. 

One of the main benefits of uncapped ADSL is predictable monthly costs, while capped ADSL has the possibility of allowing users to exceed their monthly usage limit and may result in excessive unforeseen charges. 

Not the first time

This is not the first time that Telkom has tried to convince consumers that capped ADSL is better than uncapped accounts.

In June last year a Telkom newsletter titled “Broadband:  Put a cap on it”, Telkom warned 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 said in its previous newsletter.

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