Death of ADSL in South Africa

Telkom’s financial results for the year ended 31 March 2021 show that its fixed broadband subscribers have declined by nearly 12% year-on-year.

Its fixed broadband subscriber numbers dropped from 686,525 in March 2020 to 605,807 in March 2021.

While Telkom has lost fixed line customers since 2001, its fixed broadband subscriber numbers only started declining from September 2016.

Taking into account internal lines and clients taking up Telkom fibre connections, it is clear the company is rapidly losing DSL subscribers.

This is despite the fact that Telkom’s recent introduction of naked DSL and price cuts from Openserve, Telkom’s wholesale and networks division, has resulted in DSL services being cheaper than fibre in some instances.

While Telkom has added thousands of home and business fibre customers to its network, its overall fixed-line subscriber base continues to decline.

This means new fibre clients do not make up for the loss of DSL subscribers, and strongly suggests Telkom is losing clients to fibre competitors, particularly Vumatel.

Vumatel recently reported that it remained the market leader in South Africa’s fibre-to-the-home space, controlling 40% of market share in terms of homes passed by its fibre network and its active subscribers.

Telkom has risen to Vumatel’s challenge for dominance of South Africa’s fixed-line sector, aggressively expanding its fibre network and slashing wholesale prices.

Between March 2020 and 2021 Telkom increased the number of houses passed by its fibre-to-the-home network by over 20% — from 455,553 to 549,957.

It also increased its active fibre connectivity rate — the proportion of people who make use of its fibre network where it is available — from 48.2% to 51.1%.

The charts below show the decline in Telkom fixed-line subscribers since 2001, and how Telkom’s fixed-broadband subscribers have declined since September 2016.

They also show how Telkom’s fibre subscriber base compares to the number of DSL subscribers.

While copper lines and DSL subscribers are rapidly declining, Telkom CEO Sipho Maseko said copper would be with Telkom for a long time to come.

He did, however, highlight that their focus was on next generation technologies like fibre, 4G, and 5G.

Telkom fixed line subscribers — 1993 to 2021

The following chart shows how Telkom fixed line subscribers peaked in March 2000, and have steadily declined since then.

Telkom fixed broadband subscribers — 2003 to 2021

The following chart shows how Telkom fixed broadband subscribers peaked in September 2015, slowly declined until September 2018, and then plummeted over the past three years.

Telkom DSL vs FTTH subscribers — 2003 to 2021

The following chart shows how Telkom DSL subscribers peaked in March 2016, declined steadily until September 2018, and then plummeted.

It also shows that Telkom has been adding fibre-to-the-home subscribers slower than it has been losing DSL subscribers.

Note that Telkom stopped reporting its DSL subscribers as a separate category in March 2016, and started listing all fixed broadband subscribers in a single figure.

However, it still provided separate figures for fibre customers, allowing an estimate of DSL subscriber numbers to be calculated.

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