SA ADSL 'a joke`

Johannesburg, 24 Feb 2003

SA`s attempts at managing the transition between the Telkom monopoly and an open market are almost certainly doomed to failure and will do nothing to make broadband more widely available or affordable.

In fact, SA`s version of asynchronous digital subscriber line technology (ADSL), the great white hope for consumer broadband, is a parody of what it could be, says Ewan Sutherland, executive director of the International Telecommunications Users Group (INTUG).

"ADSL as offered in SA is a product clearly designed not to be purchased," he says. "It is a truly Third World offer."

Sutherland, who met regulators and spoke at the University of the Witwatersrand last week, says the reason for and solution to the lack of broadband Internet access in this country are clear. Telkom is the problem and ending the state of protectionism it operates in is the answer.

"The slow speed [of ADSL in SA] is a marketing decision," he says. "If you are close enough to an exchange to get ADSL, you can get 12Mbps."

Telkom last year launched a commercial trial of ADSL that limits speeds to 256Kbps upstream and 512Kbps download, with a download cap of 3GB.

Sutherland points to countries such as South Korea as positive proof that cheap broadband can be made widely available without breaking the bank. He admits that specific advantages - such as the very high population density in South Korea - plays a role in such success, but suggests that ideal conditions also exist in this country.

"Even in Sandton, Telkom isn`t providing broadband to the people who drive Mercedes Benzes."

Never mind an area such as Alexandra, which may be the mirror image of Sandton in terms of wealth but has an even denser population. Sutherland believes such a township, with minimal fixed-line infrastructure, could represent a profitable market for an operator with guts. If only by wresting back a percentage of the business cellular companies do in such areas.

"Getting business back from GSM is simple. Put in voice over IP [VOIP] and slash the costs," he says.

Slaying the beast

Telkom, and those about to invest in Telkom, are hardly likely to be happy with Sutherland`s suggestions, most of which are aimed at slashing its revenue. But to INTUG it is intolerable to protect an incumbent operator from an open market when the cost is born by users.

SA will not see "serious" broadband under the current dispensation, Sutherland says, because there is no incentive for Telkom to provide it. Nor does he believe the second national operator, due to be introduced this year, will spur greater roll-out.

"A managed duopoly is a very slow and very dangerous way of doing things," he says, citing examples of markets where incumbent operators managed to delay full competition by using every trick in the book, dirty and otherwise.

Instead, INTUG favours opening the market by allowing users to provide their own infrastructure where they can. Current legislation and regulation strictly forbids that, but there is no underlying technical reason why it cannot be done, Sutherland says.

"You don`t need to have been part of SA`s nuclear bomb programme to do it. You just need to know where to switch off the electricity and know a bit about splicing cable."

Sutherland`s formula is to protect only two scare resources, radio frequency spectrum and telephone numbers, and allow pretty much anyone to use any technology to serve telecommunications users.

"Lots of people will come in. Some will succeed and some will fail. Then there will be consolidation. It`s called a market."

To avoid the worst excesses of such a market, he says, the government could draw up a technology "shopping list" of allowed equipment to ensure that, once consolidated, companies do not face widely divergent equipment types.

And if Telkom ends up on top of the pile when the dust settles, Sutherland, for one, will not be concerned. Once Pandora`s box is open, new services have been introduced and prices lowered, there is no turning back.