Telkom threatens legal action over move on prices

The recommendation is one of many made by watchdog Icasa in its 48-page findings and recommendations document on its inquiry into Telkom’s provision of asymmetrical digital subscriber line (ADSL) services, published in the July 27 edition of the Government Gazette. A Moneyweb report says that following four days of public hearings, Icasa found that many of Telkom’s justifications for its practices did not hold water. The regulator aims to institute a raft of measures that will see Telkom having to lower the price of service, loosen restrictions on monthly usage and make sure it maintains minimum levels of service. Among its recommendations, Icasa is proposing that a once-off charge be levied for access at the inception of the service, and that thereafter, ‘charges be restricted to line rental only’. In addition, the three-gigabit monthly cap imposed by Telkom is also up for review. ITWeb reports that the MyADSL forum has welcomed ICASA’s report, saying that the report tackled many of the most pertinent issues that concern broadband users. ‘If these measures are fully implemented as regulation we can expect the broadband landscape to change significantly,’ MyADSL said. Full report on Moneyweb Full ITWeb report

However, the report has brought the threat of legal action from Telkom. According to a Business Day report, Telkom says it is ‘shocked’ at the technical ignorance displayed by the industry regulator. Telkom will take legal action against the Icasa unless it withdraws a move to prevent it charging a monthly fee for its high-speed ADSL internet access. Telkom is also threatening to scrap plans to invest billions in a high-speed network and to sever its existing ADSL lines unless Icasa lets it charge a monthly rental. That would leave the country largely bereft of high-speed Internet access crucial for business and leisure use. Icasa has not responded. A Telkom spokesperson says in a Moneyweb report: ‘Icasa has displayed a fundamental misunderstanding in network design. It appears the findings are based on reports by parties at the hearings, and Icasa did not apply its mind on how broadband is offered worldwide’ He added that levying a once-off charge was not viable as Telkom provides a service for ‘as long as the customer requires it’. He added: ‘It costs money to roll out, and maintain the service. If we do away with access charges we may have to revisit our broadband rollout strategy, which may hinder development in the long run. This could discourage Telkom from investing further.’ Full Moneyweb report Full report in Business Day

Telkom has also announced a move that it hopes will boost the number of home computer users, E-Brief News writes. Telkom is to start offering package deals to provide a PC and Internet access from a starting point of R376.00 per month. Business Day reports that the offerings all tie users into a 36-month contract, and include up to 1800 Internet surfing minutes. However, the SMME Forum has criticised the bundling deal, claiming that it intends to take the matter to the Competition Commission as the product will take business away from small Internet service providers and PC dealers. In an ITWeb report, SMME Forum president Tebogo Khaas said that the SMME Forum would seek legal opinion and would approach the Competition Commission and authorities for possible intervention. But Rikus Matthyser, of Telkom, expressed surprise at the SMME Forum’s reaction, noting that ‘overwhelming response’ it had had to the offer. Full Business Day report Full ITWeb report