Many of you have heard me whinge about the price of broadband in South Africa. Much of the hassle is due to the monopoly held by Telkom, the single national telephone / last-mile provider. Well, the worm has turned. Because of overwhelming feedback through the MyADSL website, the regulatory group here in the country has reviewed Telkom's practices and will force it to lower monthly fees *substantially* and it looks like the 3gb monthly cap will be lifted as well. South Africa is entering the 21st century. The extended entry copies liberally from the original article. All rights still belong to the original author.
Broadband price freeze imminent By* *Ana Monteiro, Moneyweb, 29 July 2005
Monthly ADSL access charges to be axed as Icasa slaps Telkom on wrist
for its broadband service.
South Africa’s high-speed Internet (broadband) users connected through
Telkom, who have been subjected to among the highest tariffs on the
globe according to numerous studies, will soon see prices for the
service slashed dramatically.
This comes as telecommunications watchdog Icasa says it plans to abolish
the monthly access charges levied by the fixed-line operator for its
high-speed Internet (broadband) services.
This is one of the many recommendations that the regulator made in its
48-page findings and recommendations document on its enquiry into
Telkom’s provision of asymmetrical digital subscriber line (ADSL)
services, published in the July 27 edition of the government gazette.
Icasa received the complaint about the pricing and service levels of the
products from Rudolph Muller, the founder of website MyADSL, in February
2004. After the regulator received no less than 446 written submissions
about the services, the protracted investigation culminated in four days
of public hearings where disgruntled individual users, industry bodies
and Internet service providers (ISP) aired their concerns.
Icasa found that many of Telkom’s justifications for its practices did
not hold water. It has decided to flex its regulatory muscles and
institute a raft of regulations that will see Telkom having to lower the
price of service, loosen restrictions on monthly usage and make sure it
maintains minimum levels of service. It says it will “embark on a
regulation-making process within four weeks … to ensure provision of a
consumer-relevant, cost-effective and affordable service.”
*/Charges to tumble
/*
The access charges for Telkom’s three residential ADSL services –
HomeDSL 192, 384 and 512 – currently range from R329 to R680, and as of
August 1 will come down to between R270 and R477. Besides this charge,
users pay a R92,28 monthly line rental, and once-off costs for the modem
and installation (around R400).
The regulator is proposing that a once-off charge be levied for access
at the inception of the service, and that thereafter, “charges be
restricted to line rental only”.
Given that Telkom has around 70 000 subscribers using its ADSL services,
this will equate to a substantial, multi-million rand reduction in
Telkom’s monthly revenues.
*/Taking off the cap
/*
The much-contested three-gigabit monthly cap that Telkom imposes,
lamented by many as being too low to allow for true broadband
applications such as streaming audio and visual (multimedia) data, is
also to be reviewed and brought in line with less restrictive and
cheaper services offered in other countries.
The authority believes “that regulation is required to increase the cap
on ADSL services in line with international standards. The exact
threshold will have to be considered in the course of the relevant
public process. It is important however to emphasise that 3Gb appears
wholly inadequate for the needs of subscribers by international comparison.”
At the hearings, Telkom argued that using the ADSL service for
multimedia functions constituted an abuse of the service. Icasa says
this is not legally justifiable.
*/Guaranteed services levels
/*
The definition of what broadband actually is varies; while some say that
128kilobits per second is the minimum speed which can be defined as a
broadband connection (about twice the speed of a 56kbps dial-up
connection), others argue that this is still narrowband, and that
512kbps should be the minimum. The upstream speed on Telkom’s HomeDSL192
product does not qualify as broadband at 64kbps.
On page 31, Icasa says it “accepts and adopts the definition used by the
International Telecommunications Union (“1,5 or 2 megabits per second”),
the Telecoms Regulatory Authority of India (256kpbs minimum) and the
British regulator, Ofcom (128kpbs guaranteed minimum).
Says Icasa: “Telkom’s suggested, [guaranteed] minimum speed is 156kbps,
which is not broadband.”
*/Other findings
/*Icasa inteds to ensure that when the cap is reached, people should be
allowed to top up and/or purchase extra bandwidth at a rate charges per
megabit downloaded instead of having to buy another user account.
Also, surfing local sites will no longer count towards the cap, as, says
Icasa, “this has an indirect effect on the hosting and increased use of
local websites”.
Icasa will suggest the inclusion of information on the number of users
sharing bandwidth – known as contention ratios – to protect consumers.
Internationally, the ratios are publicly available. Telkom has refused
to provide this information, saying it is confidential. The more users
there are, the cheaper the service. Typically, the ratio for a more
expensive business service is 20:1 (20 users sharing bandwidth), while
for residential users this is 50:1.
Regarding port prioritisation: Telkom argued that this was needed to
throttle peer-to-peer traffic and prioritise http traffic. Icasa says
there “should be no discrimination between users of broadband as far as
costs and priority are concerned.”
In order to introduce more adequate competition to Telkom, the regulator
is revisiting its enquiry into the undersea fibre-optic cable that
brings international bandwidth to SA, to which Telkom controls access.
Icasa says this will be completed by the end of the year.
Access to the local loop that actually takes Internet to homes is
another area that needs to be liberalised in order for more players to
enter the market and thus result in lower prices. Icasa says that the
convergence bill deals with the issues of demonopolising facilities.