Following the recent announcement made by the Independent Communications Authority of SA (ICASA), Telkom agreed to decrease IP interconnect rates by 30%. Large scale Internet Service Providers MTN and MWEB were quick to react.
Says Edwin Thompson, general manager of Technology and Infrastructure at MTN Business; “As IP Connect is one of the most expensive parts to providing an ADSL service currently, a price reduction here is long overdue. Although we are not sure what all the providers will do with the price cut, a clear benefit for the end user will likely be felt, as this will allow for various Internet providers to either improve the current broadband services offered or, should they choose, pass on the reduction in prices.”
Considering the high cost associated with the fixed-line broadband network in South Africa, many Internet Service Providers (ISPs) are currently offering broadband services that are unfortunately restricted. MTN Business believes that through this cut, the market will likely see many providers use this cut as a mechanism to improve broadband solutions offered and therefore the consumer will most likely receive an improved experience from their broadband solutions, perhaps even cheaper rates.
“We welcome this positive percentage cut as it is certainly one that is needed in the market, and will go a long way in achieving more capacity, more accessibility and more cost effectiveness – essentially improving overall broadband solution offerings for the local consumer,” concludes Thompson.
According to MyBroadband, MWEB ISP CEO Derek Hershaw is also impressed by the cost reduction, and made the following statement: “There’s undoubtedly room for Telkom to cut prices further but at the same time they need to do a lot of work on their network and you need to leave some money on the table for them to do that. A reduction in line rental costs or a bump in line speeds would certainly be well received – our entry level product in this market should at least be 1Mbps,” Hershaw added. The average ADSL internet user in SA should agree with that fully – the fact that Telkom calls 384 kbps lines “fast” is a disgrace.
Lets hope these cost cuts will indeed lead to lower costs and improved broadband for the end user.
Source: MTN press release, MyBroadBand