Commission firms up broadband price-cut settlement with Telkom

The Competition Commission has firmed up an agreement with Telkom, and its wholesale division Openserve, that will see the telecommunications operator’s longstanding wholesale IP Connect product replaced with a completely new wholesale offering for Internet service providers.

TechCentral reported last month that Telkom and the commission had reached an agreement over concerns the regulatory watchdog had over IP Connect, which ISPs have been obliged to use when selling services on top of Openserve’s fibre and copper infrastructure.

The commission has now said Openserve’s new wholesale product suite will replace IP Connect, with the structure and proposed initial pricing set to reduce wholesale charges to ISPs. It didn’t provide the quantum of the price reductions.

“The Competition Commission and Telkom have reached an agreement on the substantial reduction of wholesale broadband access costs in order to remove excessive pricing concerns in respect of IP Connect raised in the data services market inquiry report published in December last year,” the commission said on Tuesday.

“The report urged the company to reach agreement with the commission on the removal of excessive pricing within two months. One of the findings was that there was a case, at face value, of excessive pricing against Openserve.”

‘Enhance competition’

The new Openserve offering will allow ISPs to “manage their costs and compare the Openserve fixed broadband prices with the prices of other wholesale broadband providers more easily”, the commission said in a statement. “This, as a result, will enhance competition in the fixed broadband connectivity market.”

“The commission welcomes the effective price reductions for wholesale broadband fibre infrastructure to ISPs, as this should result in lower prices to consumers and small businesses, which are increasingly reliant on fibre networks,” said commissioner Tembinkosi Bonakele.  — (c) 2020 NewsCentral Media