Telkom agrees to cut wholesale broadband prices to ISPs

Telkom CEO Sipho Maseko

Telkom and the Competition Commission have reached an agreement over concerns the regulatory watchdog had over its wholesale IP Connect product, which Internet service providers purchase to service their end users.

Telkom is introducing what it calls an “aggregated wholesale solution” that will “remove concerns” over the current IP Connect offering provided by the operator’s wholesale division, Openserve.

The new product suite will introduce “transparency and remove any perceived competition problems associated with the provision of wholesale broadband connectivity”, Telkom said in a statement on Wednesday.

“Telkom is pleased that following concerns identified during the data services market inquiry, we were able to reach this settlement with the commission,” said CEO Sipho Maseko.

“During discussions with the commission it was agreed that the structure and initial pricing of this new offering from Openserve would reduce wholesale charges to ISPs for fibre broadband wholesale customers and in this way remove the pricing concerns raised in respect of IP Connect,” he said. The company did not say how much lower the new wholesale fibre broadband prices would be compared to the old product offering.

The new Openserve product suite, which is structured as an “aggregated end-to-end solution”, will allow ISPs to manage their costs and compare the Openserve fixed broadband prices with the prices of other wholesale broadband providers more easily, thus enhancing competition in the fixed broadband connectivity market, Telkom said in the statement.

No need

The company said there was therefore no need for the commission to recommend that it lower its mobile data prices when it concluded its data services market inquiry. Bigger rivals Vodacom and MTN South Africa have both implemented price cuts in this area.

“In continually striving to ensure that citizens get the best value when purchasing data services, Telkom has agreed to improve transparency of pricing in line with the inquiry recommendations. Telkom will notify its customers of the in-bundle effective rate per megabyte in its purchase confirmation messages to subscribers. Telkom will also notify subscribers of this rate via SMS when data bundles are successfully purchased,” it said. – © 2020 NewsCentral Media