Telkom CEO Sipho Maseko has said that an Internet service provider (ISP) is a relic of the past and that you don’t need one to get into the Internet today.
The company’s latest financial results showed a big loss in fixed-broadband subscribers and Telkom Internet (ISP) all-access subscribers over the last year.
Telkom Internet all-access subscribers declined from 550,606 in September 2018 to 476,763 in September 2019.
Speaking on Business Day TV, Maseko was asked when Telkom’s Internet service provider business may become insignificant. He said it is already insignificant.
“The way people consume the Internet now is no longer through an ISP,” Maseko said. “Once they get Wi-Fi connectivity, they don’t need an ISP.”
“The ISP came back as a relic of the past when people did not have email – they did not have all of the things which would essentially be the gateway to break out into the Internet.”
“But now you are able to break out into the Internet using fibre or LTE, or even on your smartphone. You don’t need an ISP to get into the Internet today.”
“So that business [Telkom Internet] will decline. However, the offset has been that we were able to add a lot more LTE customers,” he said.
“We have been able to improve our capital productivity by connecting more fibre customers.”
Telkom has many ISP partners
These comments from Maseko may be of concern to many Internet service providers (ISPs) in South Africa who are selling Telkom’s products.
ISPs like Afrihost, Axxess, and Webafrica are Telkom’s partners and are actively promoting and selling the company’s fibre and LTE products.
ISPs are the consumer-facing companies in the broadband market and continue to play an important role in driving broadband adoption in South Africa.
In fact, companies like Rain and Openserve rely exclusively on ISPs to sell their residential fixed-broadband services.
No further feedback from Telkom
Telkom was asked for clarification on whether it sees ISPs as a relic from the past, but the company did not respond by the time of publication.