ICASA makes ADSL pricing decision

Johannesburg, 03 Jul 2006

The Independent Communications Authority of SA (ICASA) confirms resolutions have been made concerning the pricing models of Telkom`s ADSL service.

The investigations were expedited as councillors Mamodupi Mohala and Nadia Bulbulia, who were overseeing the May public hearings into ADSL pricing, are coming to the end of their terms of office at ICASA.

Mohala told ITWeb this morning a decision has been made. However, she requested time to speak to ICASA chairman Paris Mashile, before releasing to SA the much-anticipated findings.

It is expected ITWeb will obtain details of the resolutions before tomorrow morning.

One-price model?

Rudolph Muller, founder of MyADSL and long-time broadband pricing activist, is pleased a decision has been made. "We`re hoping for a one-price ADSL model," he says, "with no line rental and no monthly access charges."

He believes this is a realistic expectation, due to the outlines set down in the draft ADSL regulations, and the cohesive and strong arguments posed by many industry players at the hearings.

"It is also possible we will see some regulations that make it more feasible to offer high-cap services," he predicts.

Issues

Richard Hurst, analyst at BMI-TechKnowledge, expects two issues to be addressed in the resolutions. Firstly, Telkom may be forced to sell partially-shaped DSL instead of shaped. This will affect Telkom and Internet service providers (ISPs).

"The impact [of this would be] that ISPs have more leeway to package their products and offer them at lower prices - this will, in turn, encourage increased uptake of broadband Internet."

The other issue is the need to lower interconnection charges that Telkom levies on ISPs, he says.

Hurst adds it is unlikely ICASA would go for the cost-based model, as Telkom has put forward a good argument regarding the investment it has made in infrastructure. So the best possible option would be that a transparent profit margin is built into the charges, or the costs would be based on the amount of data carried by carriers.

Hurst warns while this would be a good attempt to fix the problem, the core issue would only be addressed once Telkom`s monopoly to the SAT3 undersea cable expires.

"The problem is most of our Internet traffic is international, and ISPs are dependent on Telkom for connection and Telkom sets the price," he says.