Telkom digital subscriber line (DSL) customers are now few and far between, with the network operator’s DSL subscriber base having dropped below 120,000, its interim results for the six months ended 30 September 2022 have revealed.
DSL users in South Africa are now at their lowest point since 2006.
The network operator’s copper-based Internet subscriber base was as high as 919,000 as of September 2017, meaning it has lost 87% of its copper customers in the past five years.
However, Telkom’s DSL customer count had begun to decline before 2017, with the number having peaked at just over one million subscribers the year before.
After losing DSL subscribers gradually between March 2016 and September 2018, the rate had accelerated by March 2019 and customer numbers have been in freefall since.
Telkom DSL subscribers totalled just over 195,000 in March 2022, meaning the network operator lost almost 40% of its DSL customers in six months.
The chart below shows Telkom’s DSL subscriber decline from its launch in March 2003 to September 2022.
The decline in Telkom DSL customers is likely due to fibre network expansion and lower-priced fixed-wireless solutions in South Africa.
Telkom CEO Serame Taukobong told TechCentral that the network operator would likely “totally exit” from copper in the next 18 months to two years.
He said Telkom would migrate its DSL subscribers to newer technologies like fibre and fixed-4G and 5G products.
While the network operator has previously announced similar plans to migrate its DSL customer base to fibre over time, it backtracked from a strategy where it aggressively discontinued copper-based services.
A Telkom spokesperson told MyBroadband that the company would not disconnect DSL customers in areas where it does not have fibre infrastructure.
“We will only migrate copper customers to fibre where we have fibre,” they said.
Before that, Telkom had said it planned to use its Smart Voice and LTE products, in addition to its fibre services, to replace its copper-based products.
It also said it would pull up the cabling to resell it to recover some of the costs related to its copper network.
Telkom’s fibre division — under its wholesale and networks division Openserve — has performed relatively well since the fibre network operator (FNO) started connecting homes to its network between September 2015 and March 2016.
Its interim results revealed that it had connected 443,469 homes to its network as of September 2022 — up from 389,000 in March.
Regarding homes passed and connected, Openserve is the second largest FTTH network in the country, with only Vumatel having more extensive last-mile residential coverage.
Although Openserve has more fibre in the ground overall (over 160,000km compared to Vumatel and DFA’s combined 45,000km), Vumatel has overtaken it in fibre-to-the-home (FTTH).
It should be noted that Telkom’s fibre division has one of the highest connection rates of the FNOs in the country, having connected 46.5% of its homes passed.
The only FNOs with higher connection rates are Vodacom and Herotel. However, their networks have far less coverage.
What terminating DSL could mean for fibre
While Telkom’s approach to decommissioning DSL has been fitful — with the company having chopped and changed between encouraging customers to migrate to fibre and launching new DSL products — it could help to lower fibre prices in South Africa once complete.
This is according to Cybersmart chief technology officer Laurie Falkov, who previously told MyBroadband that terminating DSL in the country could create opportunities for lower fibre prices.
He explained that Openserve’s ability to cut costs would be determined by its ability to reduce staff after turning off DSL and its appetite to deal with the subsequent backlash from unions.
“Either Telkom is going to maximise its profit — which from our perspective, we hope they will do — or they are going to reduce pricing —which they have never voluntarily done without industry pressure,” Falkov said.
Vox Telecom ADSL product manager Navisha Naidoo said terminating DSL would have pros and cons for South African Internet service providers.
“ISPs need to look at the decommissioning of ADSL as an opportunity to offer customers an alternate form of Internet access that is future-proof, stable, and will meet their needs,” she said.