ADSL price increase on the cards

Internet Access in South Africa 2012 report warns that ADSL price increases will be bad news for Telkom

December 17, 2012
Telkom binary ADSL SA news

The impact of ongoing ADSL price increases will solidify the decline of ADSL and herald the demise of Telkom as an Internet service provider. This is according to the Internet Access in South Africa 2012 report by World Wide Worx.

The report, which was sponsored by MSN and endorsed by ISPA, stated that Telkom’s decision to increase ADSL prices in 2012 is a slap in the face of government’s broadband plans.

“Telkom’s first increase in the history of ADSL in this country [in 2012] … made a mockery of government pronouncements about bringing down the cost of broadband,” the report stated.

According to World Wide Worx, Telkom can argue that it is currently migrating ADSL users to higher speeds at the same price, but this does not address lack of access.

The report stated that it had long been anticipated that Telkom would eventually bring down the cost of ADSL line rental to stimulate growth, but the opposite has now happened.

ADSL prices in South Africa

ADSL prices in South Africa

Warning from history

Telkom has steadily been increasing the price of its analogue lines over the last decade, which may have been partly to blame for the continued decline in the company’s fixed line subscriber numbers.

World Wide Worx argues that the same will happen with ADSL subscriber numbers if Telkom continues to increase ADSL rates.

“The ADSL price increase is strategically dangerous for Telkom. Being the first increase in nine years of ADSL provision, it may well signal a trend of ongoing price increases, much in the way that the cost of a normal fixed line phone rental increases every year,” the report stated.

“Should this be the case, the prospects for any further ADSL growth will be dimmed. Based on a scenario of marginal increases every year, we can expect the product life cycle curve to be forced solidly into place.”

World Wide Worx said that the resultant graph of price versus users would look something as follows.

Clearly, the impact of ongoing ADSL price increases will have the same effect as the current strategy of ongoing fixed line rental increases: it will solidify the decline of ADSL, and herald the demise of Telkom as an Internet service provider.

Number of ADSL lines versus price

Number of ADSL lines versus price

Article courtesy of MyBroadband – ADSL price increase warning

Related articles

Alarm bells ringing for Telkom ADSL

Telkom ADSL speed increase update

Telkom ADSL growth slows further

Telkom 40Mbps VDSL trial details

1Gbps Telkom VDSL and FTTH infrastructure roll-outs begin

Tags: adsl, headline, Telkom

Shutterstock is the image partner of MyGaming – technology images can be found here

Poll

Should all downloadable content (DLC) be free?

View Results

Loading ... Loading ...

Latest News

PlayStation Plus – your free games for December 2014

PlayStation Plus News

Step right up, your free PS Plus games have been announced

Steam Exploration Sale now on

Steam

Check your wishlists, because Steam is dishing out the discounts

Top 10 most pirated PC games

Piracy 1

Pirate gamers – they don’t actually wear eye-patches or carry parrots

Gaming’s worst clichés

Tomb Raider Swimming

No, you can’t take that awesome weapon off that enemy you just maimed. Deal with it.

X

Newsletter Subscription

Name
Email *
Enter the following to confirm your subscription *
Captcha image


Free MyGaming Newsletter:
Subscribe
X
bool(true)