Naked ADSL, price cuts needed: ISPs

Afrihost director Greg Payne said that naked ADSL services, lower ADSL access fees, and further IPConnect (IPC) price cuts are needed to drive ADSL growth in South Africa.

Internet Service Providers (ISPs) were quick to pass on to their subscribers Telkom’s recent 30% IPC price cut, but this had only a limited impact on the overall price of an ADSL service.

“I think many ISPs have come to the party in terms of what they are able to do – a good example is how they passed on the price savings of the IPC price cuts so the end user benefited. IPC is still at least 4 times too expensive in our view, but the bigger issue now is the line rental,” said Payne.

Web Africa COO Ruper Bryant highlighted that the largest portion of the total ADSL cost to the consumer is paid to Telkom for ADSL access and analogue line rental.

“If we want to increase the ADSL subscriber growth overall in SA we need to collectively focus on addressing the issue of the price points still being too high,” said Bryant.

Greg Payne
Greg Payne

Afrihost’s Payne substantiates Bryant’s argument, explaining that the fact that you can get a cellular data solution for R150 per month means that many people are opting for this over ADSL.

“For a 4Mbps ADSL connection you are paying R553 per month (R140 for analogue rental and R413 for ADSL rental) before you have sent your first e-mail,” said Payne.

“This means we need naked ADSL and a big reduction in the ADSL line rental to compete with the mobile offerings. In our opinion, this is what would grow the ADSL market from about 800,000 subscribers to many millions.”

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Naked ADSL, price cuts needed: ISPs