Telkom issues ADSL threat to ICASA

3 Aug 2005

South Africa’s largest telecoms company Telkom SA says it could abandon plans to spend billions of rand in developing ADSL internet access services and disconnect existing high speed connections if the regulator, ICASA, does not let it charge a monthly rental fee for such services. According to the Business Day, Telkom is incensed about the regulator’s recent findings on the country’s ADSL sector, which it deems to be ‘flawed’ and ‘ludicrous’. ICASA is attempting to fast-track new regulations for the ADSL segment in the next four weeks, but Telkom plans to challenge this plan and point out ‘mistakes’ in its findings. Telkom’s head of product development Stephen White, added that the operator could launch legal proceedings if its petition is not successful.

Telkom’s principle concern with ICASA’s study centres on the contentious issue of the so-called ‘double levy’. The incumbent currently charges one tariff for the rental of an ADSL connection and another for accessing the internet. The regulator contends that no other countries have a double levy, but Telkom argues that other companies merely bundle the charges together, meaning that the customer still pays the same fee, and that it should not have listened so closely to other players ‘or people who have never run a network’. White went on to warn ICASA that ‘rash regulating’ of the ADSL market would make it hard for Telkom to justify future investment on the service.

South Africa, Telkom South Africa