ADSL - The Better But More Expensive Option

ADSL South Africa (Broadband South Africa), 20 May 2006

Yes, ADSL is the better but more expensive option when squeezed into a two street Internet connection scenario. Dial up forms a dead end street for those wanting to minimize their Telkom costs or just want to surf the net faster. Even though Telkom has brought in a few new deals to make our telephone bills cheaper, the price of ADSL and the service of Telkom have remained constant.

ADSL users in Johannesburg recently experienced their share of Telkom incompetence, which Telkom squarely blamed on cable breaks for the apparent lack of speed although they didn’t refund a cent to frustrated ADSL users. There were a few compliments for good service on Telkom’s part. This is however not enough while the complaints vs. compliments ratio looks like a tip truck stuck in tip mode.

The three street scenario with ADSL International in first place is a different story altogether. According to a reliable market participant local ADSL prices are a “1000% more expensive than comparable international offerings” (MyADSL). This is why many got hot under the collar when the MD of World Wide Worx was quoted as saying “it is a myth that it [ADSL] is ‘too expensive’”. Mr Goldstuck clarified his position after the uproar although many will only see his remarks as that of a double-minded politician. People want to see action and don’t want to hear remarks like the above that’s only aimed at creating confusion at best.

He did said one thing that made perfectly sense: “The ideal is very simple: for ADSL to become truly compelling for the entire dial-up base AND for it to attract new users to the Internet, it must come down to the price of dial-up. While that may sound ridiculous to Telkom, it is obvious to consumers, and would be in line with global trends,” he said. Correct. Telkom is the fly in the soup. No one needs an honours degree to see that.

If you are a monopoly like Telkom chances are good that the demand for your products will grow even when you really suck at service deliverance. This is especially true when your products and services form an essential part of communications. Mr Goldstuck and others however must not see this as an opportunity to make idiotic remarks with “it is a myth that it [ADSL] is ‘too expensive’” stuck in the middle. I don’t think one should ever make the mistake of linking Telkom’s performance to the prices they charge. Higher prices will of course limit user participation but will not necessarily mean better service. Lower or higher prices in Telkom’s case will not change Telkom’s service deliverance. Any fool can see it’s a case of milking the cow until she’s dry. All we can see is the classic performance of a dancing hippo where we have to pay for the empty seats. I am convinced that Telkom wouldn’t be able to deliver first class service even if it was left with only one customer.

In short, ADSL in South Africa is the better but more expensive option in a two street scenario. It can also be said that it’s way more expensive but not necessarily the better option in a three street scenario. Most consumers would be willing to pay more for a product or service with a correspondent increase in service deliverance but it’s not the case with Telkom.