/ 5 August 2005

Telkom and Icasa lock horns over ADSL

The most high profile legal battle in three years is likely between Telkom and the Independent Communications Authority of South Africa (Icasa) over the cost of high-speed Internet access, after Icasa slammed the telecoms giant for charging “exorbitant” fees.

The dispute is centred on the asymmetric digital subscriber line (ADSL) service that Telkom offers, which is high-speed, so-called “broadband”, Internet access.

It is arguably the biggest confrontation the two bodies have had since Icasa sued Telkom for unapproved call cost increases. Both parties settled three years ago but Telkom, clearly, has had the upper hand.

Much of this current dispute is about the duplication of the line rental. Telkom charges ADSL users both the R87 monthly rental and then between R270 and R477 for one of the four ADSL packages it offers. Telkom’s estimated 100 000 ADSL users would have gasped as the utility threatened to pull the plug on its ADSL service if it was forced to stop charging the latter fee.

Industry watchers are not surprised at Telkom’s stance, given the company’s imperviousness to public opinion of its services.

Whether this becomes more than a wrist slap depends on Minister of Communications Ivy Matsepe-Casaburri, who is notoriously sympathetic to Telkom. However, President Thabo Mbeki, during his State of the Nation address earlier this year, said it was “unacceptable” that fixed-line call rates in South Africa are 10 times those of developed countries, and that these high costs will “soon become a thing of the past”.

Last month, Deputy Minister of Communications Roy Padayachie told a conference on pricing that “high-speed, high-quality services should be available at a cost that does not make it prohibitive to do business”.