When will the South African government realize or act on the fact that Telkom's high prises are suffocating the development and growth of small ecommerce businesses in South Africa?


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TELKOM's high-priced internet services have come under sustained attack at public hearings to help the industry regulator decide how to cut costs and improve quality.

The Independent Communications Authority of SA (Icasa) has declared its intentions in draft regulations to slash Telkom's prices and let consumers enjoy faster surfing and far larger downloads.

Yesterday Icasa inquisitor Praneel Ruplal asked Telkom if it was deliberately trying to alienate its customers. "There have been hundreds of complaints about the service and the costs. Even if you skew the results of international comparisons it is still much more expensive," he said.

Draft regulations to improve ADSL internet services were drawn up after consumer complaints and 446 written submissions to Icasa.

Yet its proposed remedies have attracted criticism from consumers, internet service providers (ISPs) and Telkom for not solving all the issues.

Rudolph Muller of the MyADSL website said comparisons showed that Telkom's ADSL was 1000% dearer than international offerings, as its monopoly over ADSL meant it could charge what it liked.

Telkom said it had made some significant price cuts, and now that it had reached a critical mass with about 140000 users, the price should fall even further.

The rest of the industry has welcomed a proposal to prevent Telkom charging a monthly fee for ADSL, which runs a new technology over an existing copper phone line.

Telkom charges R477 a month for ADSL, plus R89 for a phone line, so consumers pay R566 as well as a monthly fee to their ISP.

Telkom could charge an installation fee, but a monthly rent was unfair when the conversion was a once-off event, Icasa ruled.

Yesterday Telkom argued that the monthly fee helped cover a deficit run up by installing its national copper line network, and the ADSL fee also had to cover ongoing maintenance and administration.

Icasa also plans to scrap Telkom's cap of 3GB of data downloads a month, which forces users to buy more bandwidth when they exceed the limit.

Icasa proposes a cap of 10GB a month.

However, internet activist Mike Lawrie questioned why there should be a cap at all.

Muller suggested that Telkom should be forced to offer a basic package with a higher speed and a higher cap than its current offering, for under R800 a month.

Telkom should be forced to resell that to rival ISPs at a 25% discount, so private ISPs could design a wider variety of offerings around it and still make a profit.


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Lesley Stones
Johannesburg

Copyright © 2006 Business Day.