ADSL wholesale price cuts

ADSL South Africa (Broadband South Africa), 14 March 2007

Telkom’s wholesale Internet provider, SAIX, has decided to reduce its wholesale ADSL prices to Internet service providers (ISPs). Price cuts will be effective from the 1st of April.

SAIX’s announcement of reductions in ADSL wholesale rates cannot be seen as something to write home about. This is true if one compares the recent price cuts by MTN, Sentech and Vodacom with SAIX’s poor reductions around the 5% mark.

What are the new wholesale rates for basic ADSL packages?

'These new prices translate into a price reduction of 5% since November 2005 where a 2 GB account cost an ISP R 127-00' (Telkom reduces ADSL wholesale rates, MyADSL, 13 March 2007).

Basic ADSL Packages

Standard Shaped Accounts

Prices exclude VAT and are hard-capped.

Unhaped Accounts

Prices exclude VAT and are hard-capped.

What are the new per-GB wholesale rates?

'Telkom reduced their per-GB wholesale rates by around 6%. The VAT exclusive prices range between R 49-40 per GB and R 40-51 per GB depending on the amount of bandwidth bought by the ISP' (Telkom reduces ADSL wholesale rates, MyADSL, 13 March 2007).

Shaped Accounts

Prices exclude VAT.

Unshaped Accounts

Prices exclude VAT.

What are the new wholesale rates for 'Local Only' accounts?

'Local Only' Accounts

Prices exclude VAT.

Are these price cuts enough to help ADSL ISPs to effectively compete against the likes of Vodacom and MTN?

No, not by a far shot. ADSL ISPs will at best only be able to adjust their rates slightly.

ADSL South Africa (Broadband South Africa) welcomes any reductions in the prices of ADSL but feel SAIX could have come to the table with a much sweeter deal.