{"id":29136,"date":"2011-07-18T12:50:25","date_gmt":"2011-07-18T10:50:25","guid":{"rendered":"http:\/\/mybroadband.co.za\/news\/?p=29136"},"modified":"2011-07-18T12:53:24","modified_gmt":"2011-07-18T10:53:24","slug":"we-sell-our-fixed-lines-below-cost-telkom","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/telecoms\/29136-we-sell-our-fixed-lines-below-cost-telkom.html","title":{"rendered":"We sell our fixed lines below cost: Telkom"},"content":{"rendered":"

Local Loop Unbundling (LLU) is on everyone\u2019s lips after the Independent Communications Authority of South Africa<\/a> (ICASA) unveiled the long awaited Local Loop Unbundling (LLU) discussion document on 22 June 2011.<\/p>\n

To start the debate and share information on local loop unbundling, the South African Communications Forum (SACF) organized a Local Loop Unbundling (LLU) workshop which took place on 14 July 2011 in Johannesburg.<\/p>\n

During Telkom\u2019s<\/a> presentation it quickly became clear that the incumbent operator is not in favour of LLU. Telkom questioned the effectiveness of LLU and argued that the cost and complexity of the process far outweighs the benefits.<\/p>\n

Fixed line costs<\/strong><\/p>\n

Telkom’s regulatory affairs executive Izaak Coetzee<\/a> told delegates at the SACF LLU workshop that Telkom\u2019s current line rental is well below their cost price.<\/p>\n

According to Coetzee, the actual cost of providing a subscriber with a fixed line is well above R250. The difference \u2013 also known as the access deficit \u2013 is recovered through cross subsidization from voice revenue on that line.<\/p>\n

Coetzee explained that Telkom\u2019s current access deficit will have to be recovered in the event of LLU, which means that other providers may well have to pay a far higher price than current retail rates.<\/p>\n

Coetzee further said that many people assume that Telkom\u2019s fixed line network is paid off and does not require significant investments, but this is a fallacy.<\/p>\n

Apart from the continued investments in Telkom\u2019s fixed line access network, Coetzee said the company spends a large amount of money on operational and upkeep costs.<\/p>\n

Telkom\u2019s competitors asking for fair pricing<\/strong><\/p>\n

As a listed company Telkom will have a strong case that it must be allowed to recover the cost of its access network, but its competitors are not sympathetic to the company\u2019s access deficit.<\/p>\n

\"Angus<\/a>

Angus Hay<\/p><\/div>\n

Neotel\u2019s<\/a> Angus Hay<\/a> said that LLU is a necessary component to bring about competition in the fixed line market, adding that LLU internationally meant cheaper broadband and better services to consumers.<\/p>\n

Hay said that access to Telkom\u2019s fixed lines should be done right, where wholesale costs are well below retail pricing. \u201cIf pricing is done where wholesale is more expensive than retail, it is a problem,\u201d said Hay.<\/p>\n

Hay added that just because LLU is a challenging process does not mean that it should not be implemented.<\/p>\n

One of the delegates at the SACF LLU workshop was even less sympathetic than Hay, saying that we should not forget that taxpayers\u2019 money paid for Telkom\u2019s copper network.<\/p>\n

Another delegate questioned Telkom\u2019s accounting methods, citing the company\u2019s SAT-3\/SAFE cable costing where Telkom used a five year period to recover costs despite the fact that the cable\u2019s life span was expected to be a minimum of 25 years.<\/p>\n","protected":false},"excerpt":{"rendered":"

Telkom says that they cross-subsidize their fixed line rentals by voice calls, which has a direct impact on Local Loop Unbundling.<\/p>\n","protected":false},"author":2,"featured_media":29138,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[5,3],"tags":[1421,35,2518,535,1021,107,2466,109],"class_list":["post-29136","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-adsl","category-telecoms","tag-angus-hay","tag-headline","tag-izak-coetzee","tag-llu","tag-local-loop-unbundling","tag-neotel","tag-sacf","tag-telkom"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/29136"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=29136"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/29136\/revisions"}],"predecessor-version":[{"id":29384,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/29136\/revisions\/29384"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/29138"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=29136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=29136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=29136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}