Telkom announces wholesale price cuts

Johannesburg - The wholesale business of telecoms network Telkom has announced price reductions of between 10% and 63% for its product range.

Representatives of Telkom Wholesale Services said that as of May 1, these price decreases all form part of ranges that could also impact ADSL and fibre broadband customers, depending on who their internet service providers are.

Service providers are set to experience these price reductions which can then be passed on to the consumer.

These rate reductions are expected to be up to 10% on Telkom’s wholesale fibre broadband access, 6%-25% across the South African Internet eXchange product range and 1.4%-63% across the IP Connect range, with tariff reductions of between 35% and 40% across the Metro Ethernet product range.

“What we’re hoping that what will come out of this exercise is the ability to pass this onto the service providers,” said Telkom’s managing director of Wholesale Services Prenesh Padayachee.

It’s unclear what the exact price reductions could be for consumers specifically.

However, Telkom says it plans for these reductions to help boost internet access in the country.

According to Internet World Stats, just 10.5% of South Africa’s estimated population of 54 million had access to the internet in 2014.

South Africa has also recently fallen five places on the World Economic Forum's global information and communication technology rankings to position 75. Factors such as South Africa’s limited international internet bandwidth dragged down the country’s ranking.

“Hopefully, when we look at Internet World Stats and that, we start to feature on the upper end of those stats,” said Padayachee.

A key factor that could negatively impact the level of Telkom’s price decreases is the rise in line rental prices. Line rental is the fee Telkom charges its customers to have an active phone line connected to their homes.

Telkom plans to hike its line rental prices by 13%, from R166 per month to R189 per month on May 1.

Line rental prices are the domain of Telkom’s retail business, but Alphonzo Samuels, Telkom’s chief technology officer, told journalists that the company is studying these line rental prices as well.

“We’re looking at reviewing the whole ecosystem,” said Samuels.