ISPS STRUGGLING WITH ADSL RESELL PRODUCT IN SOUTH AFRICA
Telkom recently launched their ADSL Resell product which gives ISPs the ability to resell the ADSL access portion of Telkom’s broadband service, but according to service providers they are struggling to actually utilize this new offering.
Telkom’s new Do Broadband offering which combines the ADSL Access and ISP portions places additional pressure on ISPs to offer their clients a one-price ADSL service, but this is easier said than done.
According to Rudi Jansen, CEO of MWEB, the processes to do ADSL Resell are still not properly in place which puts them at a clear disadvantage to TelkomInternet. Jansen pointed out that Telkom is working towards creating a smoother process, but until this has been finalized, ISPs other than TelkomInternet will struggle to provide their users with a seamless one-price ADSL offering.
Another concern among many ISPs is that they will not be able to easily transfer the ADSL Access portion of their existing customers from Telkom to their business. “Telkom has an unfair advantage of transferring the access portion away from a competing ISP as no service interruption in the Telkom Line will be seen (As Telkom already Owns the Line),” said Sean Bezuidenhout, MD at GamCo.
“Should GamCo want to transfer away a Telkom customer, the customer would have to cancel their Telkom portion, their service will be discontinued with a chance their port being lost etc. This makes it almost impossible to compete fairly as Telkom can transfer clients without any interruption of service where other ISPs would. This subject needs to be addressed by fellow ISPs and ISPA as a whole,” Bezuidenhout pointed out.
Laurie Fialkov, MD of Cybersmart, shares Bezuidenhout’s frustration. “Most of our customers have asked to convert to this single price model in order to enjoy the further discounts that we are offering. However, in true anti-competitive spirit, Telkom have a "business process" in place which states that in order for an ADSL circuit to be transferred to an ISP, it needs to be first cancelled by the customer and then a new application must be ordered.”
Fialkov said that while everyone may not be content with the margins, it will be sustainable for them as long as they are allowed to effortlessly transfer their current ADSL ISP customers’ access portions to their business.
“From our perspective if we were allowed to transfer all our existing customers onto this service I would go as far to say the margins are generous. The unfortunate thing is that Telkom are doing everything in their power to obstruct this,” said Fialkov.
Telkom’s free modem offer for ADSL self-installs has also raised concern among ISPs. “Telkom is still offering a free modem on their Self Installs, again the saving made by not sending a technician to a customer’s home is passed back as a free modem, this is completely anti-competitive and no ISP can compete with offering free equipment on their own Self Install. Telkom needs to make this modem available to ISPs using the Self Install method,” said Bezuidenhout.
Fialkov is also not happy about this situation. “TelkomInternet is able to get free modems from Telkom Wholesale when doing a self install. We have been asking for clarity on this for our "one price" ADSL offering, as the ISP effectively does a self install on behalf of the customer. To date we have had no feedback and our assumption is that we will not get the modem free.”
So while the ADSL Resell wholesale product from Telkom was widely welcomed by both consumers and ISPs, the process still seems marred by problems which may place ADSL service providers at a disadvantage when trying to compete with Telkom’s own ISP, TelkomInternet.