Competition Commission confirms agreement with Telkom over IP Connect pricing

The Competition Commission has confirmed that it has reached an agreement with Telkom regarding the pricing of its wholesale IP Connect product.

“The Competition Commission and Telkom have reached an agreement on the substantial reduction of wholesale broadband access costs in order to remove excessive pricing concerns in respect of IP Connect raised in the Data Services Market Inquiry Report published in December last year,” the Commission said.

The Data Services Market Inquiry Report urged Telkom to reach an agreement with the Commission on the removal of excessive pricing within two months.

One of the findings was that Telkom must act to address the excessive pricing of its IP Connect wholesale product, which is used by Internet Service Providers to connect fibre and ADSL clients.

Openserve will address this by introducing a new product to replace IP Connect, the structure and pricing of which would reduce wholesale charges to Internet Service Providers.

The Commission said this new offering will also let ISPs manager their costs and compare Openserve’s offering with that of other wholesale broadband providers – improving competition in the fixed-broadband market.

“The Commission welcomes the effective price reductions for wholesale broadband fibre infrastructure to ISPs, as this should result in lower prices to consumers and even small businesses which are increasingly reliant on fibre networks to run their businesses,” said Competition Commissioner Tembinkosi Bonakele.

Mobile prices and transparency

In its previous announcement regarding the agreement with the Competition Commission, Telkom said that there was no need for the Commission to recommend that the company lower its mobile data prices.

The Commission did propose industry-wide measures to improve transparency to consumers over the effective price per MB of mobile data, however.

It also recommended the introduction of forms of free or zero-rated data for essential public benefit organisation web content to assist poorer consumers.

Telkom said it will display the cents per MB for all of its data-only packages and will notify its customers of the in-bundle effective rate per MB in its purchase confirmation messages.

The company will also offer mobile subscribers zero-rated access to essential government and educational institutions, as well as sites such as Wikipedia, Everything Science, Everything Maths, and DBE Cloud.

“Poor consumers especially will benefit from the zero-rated initiatives and displaying the cents per MB prominently will help consumers make informed decisions over what bundle offers the best value,” said Bonakele.

Now read: Free ADSL and Openserve fibre data during lockdown

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Competition Commission confirms agreement with Telkom over IP Connect pricing