Telecoms23.05.2014

Telecoms Action Group – seven years on

By Staff Writer

In January 2007, the Telecoms Action Group (TAG) published a full page advertisement in the Mail & Guardian calling for the reform of the telecommunications sector in South Africa.

The Group, founded by Alastair Otter and Richard Frank in 2006, said that the advert was a first step in a wider effort to get consumers more involved in the fight for telecommunications reform.

“We want to send a clear message to the South African government that Telkom’s high prices and poor service levels, together with a general lack of momentum in opening up the telecoms sector to competition, are hurting South African businesses and households,” Frank said in 2006.

“It’s clear that we’ve gained very little as telecoms consumers by letting the minister of communications and the regulator, ICASA, fiddle for 10 years. It’s time for action,” said TAG co-founder, Alastair Otter.

The campaign received widespread support from consumers, businesses and political parties, which included funding from the Shuttleworth foundation.

Telkom response in 2007

Telkom said in 2007 that it is committed to adjusting its pricing model and to place customers at the core of their business.

“The concerns raised by the Telecommunications Action Group revolve largely around pricing. In this regard, Telkom is committed to consistently adjusting its pricing model. To this end, price adjustments are filed with ICASA on an annual basis,” Telkom said at the time.

TAG MG ad

Then and now

It is now seven years later, and South Africa’s telecommunications landscape looks very different.

After a legal battle, most telecoms players are now allowed to build their own networks, and broadband access has improved significantly.

However, Telkom’s ADSL service still remains the only country-wide fixed line broadband service, and prices remain stubbornly high.

MyBroadband contacted Frank and Otter to see if they are happy with the changes since 2006.

Frank explained that a broken ADSL service and a lack of viable alternatives made him feel helpless, which is why he founded that TAG.

Richard Frank

“I’m happy to say these days there are alternatives in the market and the last-mile is less of an issue,” said Frank.

“We can now get 3G data at a fraction of the price we could have in 2007, thanks in large part to Afrihost.”

“My neighbourhood homeowners association in Parkhurst is discussing fibre to the home, and our business now uses Neotel Fibre – a little pricey but worth every cent,” he said.

On Telkom Frank said he is happy to see that Telkom’s share price become a fair reflection of their actual business prospects.

“In 2007 the share price was well over R100 per share, and now it hovers around R40 per share. The market doesn’t lie, and we can see investors pricing in the fact that the days of the monopolistic operator are numbered,” said Frank.

“You can definitely run a household or business without using Telkom which is good. Telkom has also had to improve as a result, which is good for consumers.”

Frank said that the next big step is fibre to the home.

“I don’t believe the naysayers who say it won’t make business sense in South Africa,” he added.

“It will take a bold operator to disrupt the fibre market – like Afrihost did in the ADSL market. I expect the dam wall to burst in the next 12 months.”