ISPA wants cheaper broadband

2010-05-24 13:19

Johannesburg - The Internet Service Providers' Association of SA (ISPA) had called on both the Independent Communications Authority of SA (Icasa) and telecommunications company Telkom to lower the price of broadband.

In a statement on Monday, ISPA said the 'Telkom tax' was one of the factors still keeping broadband prices artificially high. "There is scope for line rental charges to be restructured and reduced," ISPA said.

In particular, consumers should not be forced to take a voice line to access an Asymmetric Digital Subscriber Line (ADSL).

"We applaud the many steps that the South African broadband market has taken forward in recent months, especially with competition in the undersea cable market driving bandwidth prices down dramatically during 2010," ISPA said.

"However, South Africa's high line rental costs remain a major barrier toward wider adoption of broadband in the country," ISPA general manager Ant Brooks said.

Telkom tax

"While we accept that Telkom and other fixed-line providers incur a cost providing line infrastructure, we believe that fees for analogue line rental and ADSL access should be lower."

Brooks pointed out that the analogue line rental and DSL access costs for a 4Mbps (megabytes per second) ADSL service alone cost R544 a month, which meant that high-speed DSL access was unaffordable for most South Africans before bandwidth costs were even factored into the equation.

"A major part of this cost - R131 - is related to an analogue voice line rental tariff for a service many consumers don't even want," he added.

"But we also believe that there is some scope for the access portion of the tariff to be brought down."

Brooks said Telkom was able to impose a tax because of its stranglehold on local loop infrastructure, which was in turn a product of its protracted monopoly period.

"Although ISPA would be happy if Telkom would proactively look at this issue, it may be necessary for Icasa to address it with new regulations."

The margin on ASDL access should be greater, but this should not mean that the price to consumers should be higher. ISPA said it would instead support a more equitable distribution of ADSL revenues between ISPs and Telkom.


"ISPA understands that there is a need for ADSL access charges since there is a cost component associated with this infrastructure.

"ISPA also understands the need for differential pricing according to the speed of the line since higher-speed lines need more backhaul bandwidth."

However, the organisation said it wanted more transparency and equitability in how access charges were billed to ISPs and consumers.

Line rental and ADSL access were among the few elements of total ADSL costs that had not come down over the past few years, Brooks said.

  • Ike - 2010-05-24 13:48

    now we should keep our fingers crossed.... I really hope they drop the Line rental option all toghether,I only want to pay for my data line...dont need the tel line service with skype and all

  • Mat - 2010-05-24 13:49

    How long would Telekom continue to abuse us in South Africa, when would the government or new legislation intervene?
    The cost of internet in the rich countries are much lower, and the broadband is much faster and of course for us it the opposite. Neotel in my opinion has been disappointing. As a middle class citizen, I can hardly reach the middle of the month before my bandwidth are all gone. This article is very welcome.

  • Ockert - 2010-05-24 14:18

    So that they can make more money ??

  • Nikon - 2010-05-24 14:37

    In Uganda, 10Gig 3G bundle costs R350, which is nothing compared to your costs in SA. Added to that is superior speed you get with it.

    In SA the services sucks all the Operators including the Broad Band providers are thieves,ripping people off forever.

    Makes me angry

  • alan - 2010-05-24 14:40

    Telkom greed is holding SA back. Many other nations are forging ahead with low cost internet access that promotes communication, education and business. But Telkom's greed and backward-looking stance is messing things up for all of us.

  • JJ - 2010-05-24 14:49

    Just ask one thing, WHO is making the big bucks at Telkom??

  • Finally - 2010-05-24 15:12

    I am indeed glad that the role players are now seeing where to ‘pinch’ for a more meaningful price-reduction. It's the monster Telkom! In the same vain, I would like to appeal to the Hon. Minister Gen Nyanda to direct Telkom to move with the times, and direct Telkom to release a percentage of its exchange equipment and floor space to up starting companies, to allow them get a foot into the market. This percentage should be phased in a bit at a time. This will allow a ground upon which other ISP’s can offer a better Broadband & telephone service.

    The Gen should also give Telkom a deadline, by which the broadband and phone tarrifs should be lowered, in the same way he order the companies to lower their inter-connect tarrifs.

  • Collitjies - 2010-05-24 15:14

    Our rentals are so expensive so that Telkom can give these services to over the border clients at a much lower rate. Its par for the course.

  • LzK - 2010-05-24 15:21

    As they say all the 2010 stadiums are equipped with 2 x 10Gbps fibre optic cables, let us hope that telkom will give us a break after the world cup and equip each house hold with FTTH (Fiber to the Home) connection; only my wishful thinking :)

  • Socrates - 2010-05-24 15:28

    Bravo to ISPA, I was personally thinking about asking the competition commision to investigate this issue of foring the consumer to use of the voice service,its the same like the US gov vs MICROSOFT in the internet browser case, the court found MSoft guitly of antitrust behaviour, people should be given the choice of whether they want the voice service or not.Telkom should be fined for this draconian style of service providing..

  • DISKI - 2010-05-24 15:33


  • LzK - 2010-05-24 15:49

    You cannot have an ADSL without a line rental unless you have a FTTH broadband connection, remember you are renting a line 'copper' which is used to transport analog signal (this is what we call last mile connection), without a last mile connection, Telkom would be losing a lot of $$$.

  • Erich - 2010-05-24 16:03

    No way, I say just give Telkom's MD another multi million bucks bonus for not doing his job...
    In reality, I would love to see broadband's prices go down. It's unacceptable that we quote our self as a 1st World Country, but other countries that we perceive as backwards have cheaper broadband

  • Shane - 2010-05-24 16:28

    Telkom must have adsl rental alone and make it cheaper as well, then the average family can afford adsl, Telkom needs to give back now, they have taken enough. Have a heart for crying out loud! Think of the hike in education alone that adsl would bring. Telkom keeps us in this 3rd world country. Icasa should force them as would cellphone rates!

  • Kotie - 2010-05-24 16:29

    About time!! When I was in the UK, I paid 5pounds per month for a uncapped 1meg line. No rentals. just the 5 pounds/m

  • Realist - 2010-05-24 22:06

    Wake-up people!! Who is a major share-holder in Telkom? Its the government!!! So do you think that the government will restrict Telkom's charges which will eventually effect what it is getting as taxes and a profit as a shareholder?? We are being ripped off by the government once again!!

  • juggie pather - 2010-05-25 04:59

    the sa govt need to wake up .The previous min of communications did nothing to promote adsl and lower costs to the end user.Cheaper adsl and line rental will boost our economy - when you consider online shopping, holiday booking; education will also benefit tremendously. Hats off to ISPA. Now we need greater public reaction and more pressure groups. Gen Nyandas budget speech does gives us some hope but public pressure will assist

  • Lesley - 2010-08-12 16:36

    Try using the Telkom Spacestream Service (Satellite link) - it costs R835 for 2G and our business uses at least 6G per month. How's THAT for a rip off.....

  • DARKWING - 2010-09-02 16:19

    Neither our gov nor telkom understands logic. Drop the prices and more people will subscribe. More subscribers = more profit to feed the fat greedy chair sitters who with out their billion rand bonuses will surely starve to death and their children will be deprived of private schools and chello lessons.

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