As the public hearings on Telkom’s ADSL broadband service neared an end on Monday, Naspers subsidiary M-Web argued that despite numerous calls for the dual-listed group to reduce its charges, Telkom will oppose a decrease in ADSL tariffs.
“As ADSL is a flat-rate service, it must be recognised that Telkom will resist a reduction in access tariffs, as this will in effect detrimentally impact on all metered revenue derived from its dial-up service and as a result, the authority’s [Icasa’s] intervention is required to ensure reasonable access costs,” M-Web regulatory affairs director, Richard Heath, told the Independent Communications Authority of South Africa (Icasa) panel.
M-Web wants the regulator to investigate the extent to which the phone giant’s access charge is representative of Telkom’s actual costs in providing the access portion, with an allowance for a reasonable margin.
In addition to furnishing Icasa with the dual-listed group’s COA/CAM, M-Web said such information should be available for public scrutiny.
“The high access charges levied by Telkom in respect of its ADSL services should be contrasted with the access charges for ADSL services in the United Kingdom, the United States and Australia, where the cost for ADSL access is approximately R150,” Heath continued.
For its slow entry-point ADSL product for home users, the group charges a monthly connectivity rental of R329 per month. Whereas an unshaped broadband service costs R118, R189 and R226 in the UK, the US and Brazil respectively, MyADSL estimates that local charges stand at R1 495. For the same service, users pay R228 in Japan or R263 in Egypt, while the connectivity rental only applies in South Africa.
Heath asserted that since Telkom has control over the access portion, reduction of charges will be quite difficult to effect. As value-added network services (Vans) entities will be entitled to self-provide, broadband frequency spectrum must be assigned to Vans as an alternative access medium to ADSL services.
“Vans should also be entitled to co-locate with Telkom’s equipment when effecting such connections, as this will substantially reduce the costs of bandwidth associated with establishing connections over distances,” he added.
Moving away from retail rates that Vans providers are subjected to, M-Web wants all charges paid by a Vans licensee when connecting to the monopoly’s ADSL infrastructure priced at wholesale rates. This will ensure that the costs associated with the internet portion are lowered, the unlisted player argued.
Telkom will on Monday afternoon receive an opportunity to express its response when the public hearings are wrapped up. Icasa councillor Mamodupi Mohlala, chairing the four-day hearings, will announce when the regulator is likely to unveil its recommendations on ADSL service. — I-Net Bridge