Naked ADSL disappointment

South Africans will not immediately benefit from being able to get a fixed broadband line without also having to fork out for a voice line, as Telkom provides copper connections at a loss.  The Independent Communications Authority of SA (ICASA) agrees with Telkom's argument that it subsidises the cost of connections to end-users. As a result, there is no saving in separating voice and data connections, because the copper link still has to be paid for.  The industry has been arguing that the two products should be offered separately as an initial win for consumers who no longer wanted to be forced into signing up for voice just to get fixed broadband.  The Internet Service Providers' Association (ISPA) and MWeb have called for the introduction of naked ADSL as a quick win in the process of local loop unbundling (LLU).  However, ICASA's finding that Telkom has an access line deficit effectively scuttles the chances of this happening any time in the near future.  Spokesman Paseka Maleka explains the issue of naked ADSL involves both the ability to split services, as well as the question of charging for them separately. He says that, as there is an access line deficit, naked ADSL would cost more than the current bundled offering.

As Telkom is making a loss on all access lines, ICASA will embark on a process to determine how it can best deal with the deficit, with the co-operation of the industry and Telkom, says Maleka.  ICASA's document, handed out at a recent public hearing into its LLU findings, notes the access line deficit is a “significant obstacle to the introduction of fixed-line local loop unbundling”.  Derek Hershaw, CEO of MWeb ISP, says because ICASA agrees there is an access line deficit, naked ADSL has been put on the backburner because the scope of Telkom's shortfall to provide access has yet to be quantified.  Hershaw explains that Telkom has argued that the deficit would increase if it offered fixed-broadband as a standalone product. As a result, there would be no benefit to consumers, because the price would be higher than the current situation.  However, Hershaw argues that, while consumers may have to pay a bit more for ADSL than is currently the case if the voice side was dropped, the total monthly bill would come down.  “We were hoping that in the short-term there could be some quick wins that could stimulate ADSL growth; our fixed-line broadband penetration rates are far too low by any standards,” says Hershaw.

“The cost of having to pay for a landline just to get ADSL access is clearly a barrier to entry and naked ADSL would have removed that barrier,” Hershaw adds. MWeb is disappointed that an immediate opportunity to grow the market has been missed.  “Telkom is using this 'access deficit' argument to protect their voice revenues and as a consequence, the SA consumer has to pay an inflated price to get ADSL,” Hershaw argues.  MWeb has been mobilising public support in a bid to remove mandatory landline billing with ADSL lines.  “Naked ADSL is another step in the process of driving down the cost of connectivity. It's also about the right to only pay for something if you want to use it, which is completely logical,” Hershaw says.

© Nicola Mawson
Source : IT Web