Telkom says that Naked ADSL makes no sense from a costing point of view considering how ADSL is currently priced.
ICASA recently unveiled its Local Loop Unbundling (LLU) discussion document, urging stakeholders to join the debate on how South Africa should proceed in this important regulatory intervention.
ICASA suggested various LLU Options: full local loop unbundling (full access); line sharing (shared access to the local loop); sub-loop unbundling; and bitstream access (wholesale access).
Full Local Loop Unbundling is however a complicated and costly process, and very few service providers have the resources to take advantage of Telkom’s copper infrastructure even if they gain access to it.
So while many stakeholders agree that full LLU should be part of any unbundling process, some ISPs have asked for ‘quick win’ solutions to boost fixed line (ADSL) broadband in South Africa.
MWEB CEO Rudi Jansen asked the regulator to put their immediate focus on better priced wholesale ADSL access, improved ADSL speeds and Naked ADSL, where ADSL line rental and Telkom’s voice service is split and not conditional on the other.
Rudi Jansen – MWEB CEO
Numerous ISPs agree with Jansen, with the added argument that Telkom’s forced bundling of ADSL access and voice services may even be considered anti-competitive, as other ISPs must now offer their ADSL voice products on-top of an existing voice service, making it nearly impossible to compete.
While many players may wait for ICASA to publish their LLU regulations to decide on the the best way forward, some industry players feel that Telkom’s forced bundling of ADSL and voice services are against current regulations.
Regulation 10(3) of the Electronic Communications Facilities Leasing Regulations states that “Charges for electronic communications facilities must be sufficiently unbundled so that an electronic communications facilities seeker does not have to pay for anything it does not require for the requested electronics communications facility or facilities”.
When recently quizzed about Naked ADSL, ICASA councillor William Stucke simple stated that regulation 10(3) of the Electronic Communications Facilities Leasing Regulations clearly states that unreasonable bundling of services is prohibited, and that they consider ADSL to be an electronic communications facility.
This gave a strong indication that ICASA feels that Telkom’s forced bundling of ADSL and voice services are not in line with current telecoms regulations, and that there is a case for a complaint against Telkom in this regard.
A few things to consider
When Telkom CEO Pinky Moholi was previously asked whether the company is considering a Naked ADSL service, she said that it is essentially part of the LLU process and hence would wait for ICASA to give guidelines on the matter.
Richard Majoor
Richard Majoor, head of Regulatory Affairs and Public Policy at Telkom SA, told MyBroadband that people shouldn’t make the mistake of separating the line rental and ADSL costs associated with Telkom’s ADSL service and assuming that ‘Naked ADSL’ will cost the same as current ADSL access charges.
Majoor explained that line rental covers the cost of the copper from the clients’ premise to the Telkom exchange while the ADSL access charges cover the cost from the DSLAM in the exchange to the BRAS (Broadband Remote Access Server).
ADSL Network Pricing
Majoor added that their network infrastructure means that it makes no financial sense to separate voice and DSL services on an ADSL access line as it will not reduce the underlying cost of providing the service.
This means that Telkom’s wholesale cost of a ‘naked ADSL’ line – if it ever materializes – will not be the same as Telkom’s retail cost of ADSL access alone (currently ranging between R152 for DSL384 and R413 for 4/10 Mbps ADSL).
At a rate of R300 or even R400 per month for a Naked ADSL line, it is debatable if ISPs will be interested in such a service.
Battle on the cards
The debate as to whether Telkom’s voice and ADSL bundling is in fact illegal when looked at in terms of the Electronic Communications Facilities Leasing Regulations, and whether Telkom should unbundle these two services, is likely to continue with ISPs looking to increase their current offerings to also include voice services.
Many ISPs feel that it is near impossible to offer their ADSL customers a voice service at a cost when they already pay for a voice offering from Telkom.
Whether it forms part of LLU or will be handled on its own, a battle over the bundling of voice and ADSL services from Telkom is sure to make headlines in future.
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