Telkom spreads misinformation

ADSL South Africa (Broadband South Africa), 20 March 2007

Telkom is spreading misinformation with the intention to confuse the public and to give analysts a false impression of its services.

It’s as clear as daylight that Telkom is ‘…not interested in taking the price right down the floor’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007). This is in a statement made by Managing Executive for Retail and Marketing at Telkom, Steven Hayward, in reference to Telkom’s strategy where broadband pricing is of a concern after the recent drop in international bandwidth rates.

In other words, Telkom is not interested in passing on any savings to customers where broadband pricing is of a concern.

If Telkom’s not aiming for lower broadband prices, what’s their strategy then?

According to Wayward, sorry Hayward, ‘…they will differentiate on quality and speed and bundle in more value to the customer’  (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007).

In other words, Telkom will basically follow the same strategy as iBurst, who’s also clearly not willing to lower the prices of their broadband services.

Is this all Telkom is doing to defend its stance on pricing?

No, Hayward ‘…declared that their broadband prices are now at a reasonable internationally comparable rate’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007).

In other words, according to Hayward there’s no reason why Telkom should bring down its sky-high broadband prices.

Are Telkom’s broadband prices really ‘…at a reasonable internationally comparable rate’?

Not by a far shot. ADSL South Africa (Broadband South Africa) is asking the same questions as MyADSL…

‘…It has been proven over and over that Telkom is multiple times more expensive than international standards. How then, did Hayward come to this conclusion?’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007).

In a bid to clarify his take on things Hayward claimed: “…if you take 384 broadband…if you unplug it out of the bundle it is R 199-00, that is a reasonable internationally comparable broadband price” (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007). Not helpful at all because what about the compulsory monthly charges and all of that?

‘As stated on the Telkom website an ADSL service consists of various different components and charges. The first fee is a once-off DSL installation charge, then on a monthly basis subscribers must pay a DSL access charge, an exchange connection or ISP charge and the last component is a compulsory line rental charge. Without any of the three monthly components a subscriber will not be able to access the Internet’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007).

In other words, Hayward conveniently forgot to mention a once-off DSL installation charge as well as compulsory monthly charges that need to be paid, if one wants to enjoy the perks of an ADSL service.

‘The total monthly cost for a DSL384 service with a 2 GB monthly usage limit, the lowest offered by Telkom, is R 543-92. Even without the compulsory line rental charge the basic ADSL service will still cost consumers a minimum of R 444-00, more than double Hayward’s claim of R 199-00’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007).

In other words, Hayward is still stuck in ‘fairyland’ because in the real world compulsory charges determined by Telkom won’t just fly out of the window.

‘Many people may assumed that Hayward was speaking about the 2 GB ADSL ISP charge available from TelkomInternet, but his statement that an unbundled 384 broadband service costs R 199-00 should raise the alarm bells. Is Telkom trying to mislead analysts?’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007).

Telkom is certainly trying to mislead analysts:

• Hayward’s playing ‘Mr Dumb’ - ‘In June 2006 Hayward personally commented on the 24% drop in ADSL rental charges which means that he should be well aware of the cost of an ADSL service and that the total price of a DSL384 service is R 543-92’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007). In other words, Hayward must be playing ‘Mr Dumb’ to just ignore something that’s suppose to be very obvious to him.

• Incorrect comparison – ‘Internationally ADSL services are generally sold as a one-price, flat rated offering which consumers can purchase directly from ISPs. This one-price ADSL services found internationally incorporates all components, and for Telkom to accurately compare their offerings with international standards they should look at the total monthly cost’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007. In other words, Telkom is conveniently forgetting the fact that they’re not selling ‘…a one-price, flat rated offering…’ yet. Even their planned ‘one-price ADSL service’ won’t come close to the real thing but Hayward has the cheek to mention ‘…a reasonable internationally comparable rate’ (Telkom’s R199-00 ADSL service, MyADSL, 19 March 2007). Who the hell are you trying to fool?

Let’s rather not look at Hayward’s take on low usage limits, or caps… some ADSL subscribers might just go through the roof.

One thing is sure: If Hayward is trying to do a bit of spin doctoring, it might be time to leave it in more capable hands or become a politician…

ADSL South Africa (Broadband South Africa) still deplores the way Telkom is out to cheat and deceive you.