The cost of IPConnect and the price of ADSL line rental need to reduce significantly to boost ADSL services in South Africa. This is according to MWEB’s former CEO Rudi Jansen.
Speaking to MyBroadband shortly after he stepped down as CEO at MWEB, Jansen explained that the biggest costs for ISPs to provide their own services are: local bandwidth for the national network and the cost of the IPC.
“IPC is the biggest headache. If the IPC cost is reduced ISPs will buy more capacity, Telkom will get more money to upgrade the last mile and cost will reduce further,” explained Jansen.
“In addition, the throughput of the last mile needs to be increased in line with usage trends without increasing costs. This is the only way to relieve congested exchanges.”
Sean Nourse, Internet Solutions’ executive for connectivity, echoed Jansen’s views. “The biggest input costs on ADSL Internet Access is the last mile and IPC costs which are all controlled by Telkom,” said Nourse.
“Reductions in these items will have a significant effect on the affordability of the ADSL Internet Access service.”
Jansen further advocated lower ADSL line rental charges (ADSL access costs) which will drive up ADSL uptake in South Africa.
“Lower ADSL prices will entice more people to take ADSL. With 3G connectivity costs coming down all the time, some consumers find it more attractive to take 3G, despite the fact that ADSL is a better broadband technology for bandwidth hungry applications,” said Jansen.
Jansen added that naked ADSL –providing ADSL without the need to pay for a compulsory voice service – will also have a “massive impact on reducing cost of connectivity”.
Nourse agreed with Jansen, saying that better coverage and lower prices are needed to boost ADSL in SA.
“The market has bought into the fact that it is nice to have broadband access to the Internet. We have seen a massive increase in GSM broadband services over the last few years, yet ADSL hasn’t followed similar growth rates. The only prohibiting factors are coverage and price. Telkom needs to address both of these. Once this has been addressed, we should see more uptake in ADSL services,” said Nourse.