No surprise…  

It doesn’t really come as a surprise to ADSL South Africa (Broadband South Africa) that Telkom has decided not to lower their ADSL prices, especially given the numerous factors that are negatively impacting on their revenues. In fact, on the 1^st of August ADSL line rental will go up and we can expect to see overall price increases of 0.8% at Telkom. 

What are Telkom doing to lift their revenues except through price increases?

Telkom Mobile.

Given the substantial decline in the number of fixed-line subscriber lines in service and the fact that Telkom can no longer lean on Vodacom for support on the mobile side, it’s no wonder than Telkom is working hard behind the scenes in order to launch their own mobile service as soon as possible and within this year. An increasing number of people are switching to mobile services and this trend negatively impacts on earnings generated through fixed-line telephony. Some may say it’s a little too late for Telkom to launch their own mobile service and make a success of it, but ADSL South Africa (Broadband South Africa) is of the opinion that failure to try is a greater risk to them at this stage. Needless to say, Telkom can expect intense competition coming from the likes of Vodacom. One the plus side, Telkom has a huge existing fixed-line customer base to tap into, which will definitely contribute to their success in the mobile market.

In other words, Telkom are working hard behind the scenes to get their own mobile service off the ground. This is in reaction to the decline in fixed-line telephony earnings they’re experiencing due to the fact that an increasing number of people are switching to mobile services.

ADSL South Africa (Broadband South Africa) takes note of the fact that Telkom is not prepared to drop ADSL prices at this stage. It’s however not surprising given the fact that they’re taking pain in the market out there in more than one way.