In June 2016, Telkom CEO Sipho Maseko said that line rental would be removed from broadband services, giving ADSL users hope that they would save each month.
Maseko said its products would change to be more about “the service” and “less about lines”.
ADSL broadband services are still the most popular means of connecting to the Internet in South Africa, due to the limited reach of fibre and the higher prices of mobile connectivity.
The price of a DSL service, however, comes with a R199 compulsory analogue line rental fee – which users must take to use DSL services from Telkom.
Typically, an ADSL service is made up of three components: the analogue copper line from Telkom, the DSL line and its access fee, and your ISP data account.
Please go naked
Consumers and local ISPs have long called for Naked ADSL, which would see the current R199 line rental component of your ADSL bill done away with.
With users only paying for their DSL line and their data account, low-end total packages would more than halve in price, while users on high-data-usage 40Mbps accounts could save around 15% on their monthly bill.
Telkom has in recent months changed the way it sells certain DSL products, bundling the line rental fee into a package and charging a single monthly price.
Its April “Deal of the Month”, for example, offers a 4Mbps uncapped Internet package which includes landline rental, indicating it is still factored into the pricing.
This also does not change the fact that purchasing a DSL package from an ISP other than Telkom still requires users to pay Telkom for landline rental.
A move to Naked ADSL is not an easy one, though, as explained by Marius Olivier – former Telkom Wholesale manager.
Olivier said that while Naked ADSL will help grow the fixed-broadband market, it comes with challenges.
He said a challenge in providing a Naked DSL service is that Resell DSL rates may not cover the cost of landline rental.
Another challenge is Telkom’s “Access Line Deficit” issue, where telephone calls are supposed to cross subsidize line rental costs.
With fixed line numbers dropping and more people using mobile phones and VoIP services, Telkom faces difficult hurdles.
Telkom – No comment
Telkom was asked about its investigation into the viability of Naked ADSL and whether it will offer the service to customers, but the company did not provide feedback.