Local Loop Unbundling: How LLU can affect the cost of ADSL

ADSL South Africa (Broadband South Africa), 25 July 2011

While many people are of the opinion that Local Loop Unbundling (LLU) will cause the cost of ADSL to go down, it is not cut and dried that it will happen. Service providers are able to access Telkom's copper infrastructure and this is significant because it would be very costly to replicate for the competitors.

As there is much competition in the broadband market, LLU has become rather significant. ISPs are jockeying to offer faster speeds at lower prices to their customers. The government who is the largest shareholder in Telkom has been forced to address the slow ADSL line speeds that Telkom is currently delivering to the market. A document was produced to address the matter and the issue of LLU was documented so that it would create competition within the local ADSL market. However, it is unsure whether this will be effective at all.

It is believed in many quarters that the poor service delivery is largely due to poor regulatory hierarchies and the fact that there is a powerful incumbent operator. There is also a history of poor investing in infrastructure. Other factors include poor computer literacy.

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