Alarm bells ringing for Telkom ADSL

The monthly growth of Telkom’s ADSL subscriber base has slowed to the lowest levels since 2004 – which should sound alarm bells at the company.

Telkom said today (19 November 2012) that the number of its ADSL subscribers increased by 5.8% to 841,831 – up from 827,091 six months ago.  That translates into a monthly growth of 2,457 subscribers.

This monthly growth figure is down over 80% from 2008, when Telkom’s ADSL service grew by 13,264 new subscribers per month.

What should be of particular concern is that this ADSL slowdown came at a period when ADSL data prices plummeted, and where Telkom increased ADSL speeds at no cost.

One of the reasons for this slowdown may be that new broadband subscribers opt for more affordable mobile broadband services where the price for a 1GB data package dipped below the R100 mark.

8ta’s 10GB data package for R199 (with speeds of up to 21Mbps) further provides new broadband subscribers with an alternative to ADSL for a fair monthly data usage.

For Telkom to effectively compete against Vodacom, MTN, Cell C and its own mobile operator 8ta, it needs to provide a value proposition which cannot be matched by mobile broadband providers.

Here, Telkom is on the right track with its new 40Mbps broadband service, which is set to be launched commercially in 2013.

If Telkom launched this service at an affordable rate, with the option of uncapped or high data usage, it may be enough to convince many mobile broadband users to sign up for a fixed-line high-speed broadband service.

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