The Independent Communications Authority hereby wishes to inform stakeholders about the latest developments with regard to the Local Loop Unbundling process.
A 30% price reduction in the cost of IPConnect
The Authority wishes to inform all stakeholders and licensees that Telkom will reduce the cost of the IPConnect product by 30%. The product is used by all existing ISPs, to provide Internet services to small and medium enterprises, residences and businesses.
The cost of the IPConnect product is the single largest cost component faced by competing ISPs in providing choice to the end-user for fixed line ADSL services.
The reduction in the IPConnect product is expected to have four effects:
- Increase the margins available for ISPs in the provision of services, thereby stimulating innovation and increased investment
- Space for retail price reductions linked to the reduction in their single largest input cost – the IPConnect product
- An increase in take-up of fixed-line ADSL (broadband) services over time based on more competitive prices and improved customer choice
- An increase in the utilisation of existing fixed line access
Other forms of Local Loop Unbundling
The Authority has chosen to follow a phased approach to the introduction of the various fixed line (copper-based) local loop unbundling (LLU) options, as recommended by all stakeholders during the public consultation process on the matter in October 2011.
The Authority will work with all stakeholders to ensure the implementation of a Bitstream product, with a clear and concise ordering specifications system, by November 2012.
Further options will be explored at a later date, taking into account the financial and technical viability of such as well as dynamics within the market for the provision of broadband services.
Resolving the question of an Access Line Deficit
Telkom has consistently raised the existence of an Access Line Deficit (ALD), where the retail price of an access line does not cover the full cost of providing an access line. The Authority and Telkom, in conjunction with stakeholders will assess the scale of ALD as a precursor to the introduction of Bitstream services.
Enquiries:
Paseka Maleka
Tel: 011 566 3455
Cell: 079 509 0702
E-mail: pmaleka@icasa.org.za
