ADSL Broadband: Telkom to blame for slow ADSL uptake

ADSL South Africa (Broadband South Africa), 2 January 2012

If one considers the latest stats released by the Organisation for Economic Co-operation and Development (OECD), then it becomes clear that the ADSL uptake in South Africa has slowed down, something that can be squarely placed at Telkom’s feet.

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The latest OECD stats reveal that more “…than 21m South Africans use a wireless connection to access the Internet — with a tablet, smartphone or dongle — whereas fewer than 800 000 subscribe to an ADSL broadband connection” (Icasa key to cheaper broadband, TechCentral, Lloyd Gedye, 23 December 2011).  This is shocking to say the least, and like mentioned above, something that can be squarely placed at Telkom’s feet. It is after all no secret that due to Telkom’s refusal to introduce more cost-effective ADSL pricing, we’re now sitting with a situation where mobile operators and wireless broadband providers can effectively compete against Telkom, and they’re clearly winning. Mobile and wireless broadband internet connections are supposed to be more expensive than ADSL connections, but here in South Africa it is clear that the pricing difference is so small, that people rather opt to go for a wireless than a wired solution. This might come over as moonlight and roses for players such as Vodacom, Cell C, MTN, 8ta, Neotel and iBurst, but it is far from being the case. They are struggling at best in their endeavors to roll out networks as fast as possible in order to meet the high demand for data driven by an extremely high wireless broadband uptake. One reason they’re struggling is because of “…older networks that use 2Mbit/s E1 links supplied by Telkom to carry traffic” (Icasa key to cheaper broadband, TechCentral, Lloyd Gedye, 23 December 2011). The relevant networks are simple not suitable anymore. Vodacom for one said in a statement last year “…that it had about 2 000 21Mbit/s HSPA+-enabled towers but only a third of these had adequate transmission capacity to support the higher speeds” (Icasa key to cheaper broadband, TechCentral, Lloyd Gedye, 23 December 2011). Another problem is the fact that delays are experienced when it comes to the acquisition of suitable high sites, not even to mention the extended delays in acquiring the municipal permits required to expand networks.

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Now needless to say, the above-mentioned capacity problems are playing into the hands of newer entrants. In fact, it has allowed Cell C and 8ta to launch great wireless broadband offerings over the past two years, although these offerings are not sustainable in the long run. Cell C for one has in the meantime substantially increased the cost of the relevant offerings, although the offerings are still to some extent competitive, especially when compared to what MTN and Vodacom have on offer. Thus, more permanent solutions are required which will benefit both the provider and the user. It is after all no secret that many of our fellow Average Joes are complaining about the high cost of wireless broadband in South Africa, especially those who don’t even have the option to go for ADSL.

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