Telkom is cutting the cost of its high-speed ADSL internet access services by an average of 24% from August, but the service is still a massive 800% more expensive than comparable international offerings. Users who think the price cuts are generous probably do not realise that SA remains expensive even compared to African countries such as Morocco, say critics. The comments come from MyADSL, the online forum that has become Telkom's nemesis.

The latest MyADSL survey found that the average price for a 30GB service is R441. A similar service from Telkom costs a staggering R3776.

In Morocco, an uncapped, 4MB-a-second (MB/s) service costs R614. Telkom's offering is not only 600% dearer, but is four times slower, at just over 1MB/s.

The survey of 12 countries in all continents found that Telkom's fastest ADSL 1024 service is 600% slower than the international average of 6MB/s.

Last week, Telkom announced price cuts for most of its services, including substantial drops in ADSL line rental. Its retail marketing executive, Steven Hayward, said the new fees would make the lines "much more affordable".

Its 192KB/s service is being phased out and users will automatically be offered the faster 384KB/s service, for a monthly fee of R245. That is down by R114 from the current fee. The rental for its 512 service will be R362, down from R477, while the 1024 rental will drop by R164 to R516.

However, those prices exclude the normal copper-line rental, which goes up by R7,64 for residential and R10,15 for business premises. The cost also excludes the monthly fee that users pay their internet service provider.

MyADSL also assessed the level of broadband penetration in SA compared with other countries, and sums up the situation as "even bleaker". Compared to the 30 Organisation for Economic Co-operation and Development countries, SA comes in last and is three times worse than second-from-the-bottom Greece. SA's broadband penetration of 0,5% is a massive 2700% worse than the average of 13,6%.

"Telkom has promised to adopt a more consumer-centric approach, yet customers continue to pay exorbitant fees for sub-standard broadband services," says MyADSL founder Rudolph Muller. "Recent announcements regarding ADSL price reductions also mislead some consumers into believing that the total cost of ADSL was reduced by 24%." While the access cost will decrease, the line rental and installation charges will rise, so the actual price reduction on a full ADSL service is only 12%, he says.

Independent research house Genesis Analytics believes a 71% reduction in the total cost would be reasonable, agreeing with research by MyADSL that a 72% cut would see SA's ADSL prices fall to within acceptable international standards.

"Unless we see a reduction of around 70%, SA will continue to fall further behind the rest of the broadband world," Muller says. "This will seriously damage the IT industry and economy as a whole. Immediate intervention is required before it is too late for SA to play catch-up." In the past decade, SA has slipped down the ranks of the world's most connected countries from 10th to 37th

Business Day