Telkom announced last week that it will increase the price of all of its ADSL products, effective from 1 August 2012. The monthly rental fees on Telkom’s DSL products will increase as follows: Fast DSL will increase from R152 to R165.00; Faster DSL will increase from R289 to R299.00, and Fastest DSL will increase from R413 to R425.00.
Internet Service Providers (ISPs) are critical about this price increase by Telkom, and many ISPs said that they will be forced to increase their prices as well.
Web Africa CEO Tim Wyatt-Gunning said that the general move of upping ADSL line prices is detrimental to the growth of ADSL.
“This price increase will further tempt customers towards alternative access technologies such as 3G as they become increasingly skeptical of paying for better quality at a higher and higher price,” said Wyatt-Gunning. “Inevitably it will mean yet more pressure on ISP’s to try and keep the market buoyant”.
Wyatt-Gunning added that they are still trying to establish whether Telkom’s wholesale price will increase in line with their retail rate, and hence can not immediately comment on their retail rates from August.
Vox Telecom spokesperson Clayton Timcke said that they will continue to give their customers savings off of the Telkom retail rate, but will be increasing their ADSL access rates to their customers in line with Telkom.
Cybersmart CEO Laurie Fialkov said that they are going to keep their one-price (bundled) ADSL prices the same as it is “not reasonable or fair for us to pass this cost onto the customer”.
“On the wholesale side, Telkom’s price increase will put some of our wholesale rates below cost. In these cases we will have to increase our wholesale rates for resellers to our cost price and absorb the rest of the increase,” said Fialkov.
Afrihost director Greg Payne said that they have not had any feedback from Telkom on the wholesale rates yet, and will only be able to comment on pricing after this information is available.