Telkom has informed ISP’s about a reduction in the per-Gig ADSL rate effective from the 1st of August 2006. According to information received from ISP’s selling ADSL services, the new rate to will be dependant on the amount of data purchased per month.

The new rates range between R 52.91 (US$7.70) for bundles under 10,000 GB to R 42.74 (US$6.22) per Gigabyte for ISP’s exceeding 200,000 GB of data per month. These prices exclude VAT.

This pricing model is similar to the previous model introduced on the 1st of November 2005, but there is a now far bigger differentiation between the highest price and the lowest price per Gigabyte, giving the larger ISP’s a significant advantage over their smaller counterparts.

WebAfrica, an ISP which has become synonymous with usage based ADSL packages and great customer service, welcomes the latest wholesale price reductions and says that they will definitely pass these reductions on to their customers.

X-DSL, another ISP that is known for its competitive per-Gig pricing, said that they welcome the price reduction but feel that it is not good enough. Most small ISP’s will only incur a saving of around only a few Rands per GB, not enough to really reduce prices or develop new services for their customers.

X-DSL also reiterated that it will be difficult for smaller ISP’s to compete against TelkomInternet. Telkom’s retail arm already has the advantage of being part of the company where customers make their first point of call for an ADSL service. TelkomInternet now have the added advantage of getting bandwidth at a significantly lower rate than smaller ISP’s.

Any price reduction in the ADSL arena should not be smirked at, but the discrepancy between small ISP prices and high-usage prices may be a talking point for many ISP’s in weeks to come.