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					Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123




         DISCUSSION DOCUMENT ON THE PROVISION OF ADSL SERVICES




1.       INTRODUCTION


Telkom welcomes the opportunity to provide comments on the Section 27 enquiry on
the provision of the ADSL service as published in Notice 2966 of 2004, Government
Gazette 27123, dated 17 December 2004 (hereinafter referred to as the “Discussion
document”). Telkom would like to request an opportunity to make oral
representations, the duration of which will not exceed 45 minutes. Section 3 of this
submission contains general comments while section 4 includes Telkom‟s detailed
comments on the Discussion document.



2.       EXECUTIVE SUMMARY


Telkom's main submission can be summarised as follows:


        ADSL is a broadband access service.

        Telkom‟s shaped ADSL offering is targeted at the small business and the
         higher end of the residential market that have a moderate volume of Internet
         traffic.

        The cap was communicated as part of the product offering from date of launch
         but was only implemented once the ADSL base reached a critical mass and
         excessive bandwidth utilisation impacted negatively on user experience. While
         limiting bandwidth is not popular with subscribers, it has definitely become a
         worldwide trend. Capping the amount of bandwidth a subscriber can use has
         become the rule rather than the exception over the last couple of years. Bell
         Canada started limiting bandwidth in 2001/02 in order to curb the proliferation of
         “bandwidth hogs” which resulted in other subscribers experiencing slower
         speeds.



14 January 2005                                                                                           1
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


       Customers subscribing to the service are informed about the terms and
        conditions of the ADSL service, which clearly states that the throughput is not
        guaranteed.
       Telkom‟s Unshaped, ADSL is able to meet market needs by offering a service
        in which all protocols share the available bandwidth equally.
       Telkom has not increase the prices of ADSL.
       88% ADSL the customer base have expressed an overall satisfaction with the
        service.




14 January 2005                                                                                           2
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123




3.      GENERAL COMMENTS


In providing customers with access to the internet, Telkom employs a range of
products or technologies with different features which are priced differently. These
products include normal dial-up connections using the landline, ISDN, satellite,
ADSL as well as Diginet. It should be noted that a number of other providers,
including Sentech and WBS, offer products that are comparable to Telkom‟s ADSL
service. Telkom is perturbed by the fact that the Authority has singled out Telkom‟s
ADSL service, what in essence should be an enquiry into the provision of broadband
access to the internet. Even if the Authority has embarked on this enquiry due to a
number of customer complaints, it should be noted that Sentech‟s MyWireless
service has also received considerable unfavorable public comment, but this is not
even mentioned in the enquiry.


This provides some history on the development of the ADSL service, which Telkom
believes would provide the Authority with a better understanding of Telkom‟s ADSL
offering and will also place customer complaints in context.


As highlighted above, Telkom employs a range of different products or technologies
to provide customers with access to the internet. Traditionally, access has been
provided through normal dial-up connections using the landline and by means of
ISDN for customers requiring higher speed. For customers with bandwidth intensive
communication needs (e.g. such as peer-to-peer applications), these access
mediums would not be sufficient and other products, for example Telkom‟s Diginet
products, would be more appropriate. With the increased sophistication of customers
and their usage of Internet, it became clear that Telkom‟s basic Internet access
offering needed some further enhancement. The development of DSL technologies
provided Telkom with a solution that would meet customers‟ needs and address their
frustrations in respect of speed and bandwidth limitations.


ADSL is a modern technology, which provides broadband connectivity using the
copper local loop. This high-speed access provides the opportunity for fast access to


14 January 2005                                                                                           3
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


the Internet. ADSL enables upload speed of up to 256 Kbps and download speed of
up to 512 Kbps, hence the reference to „Asymmetrical‟.


On 20 August 2002, Telkom filed its ADSL service offering with the Authority.
Although a monthly service fee is payable there are no Internet dial-up usage call
charges. Customers need to obtain ADSL modems that are open to competitive
supply and are ADSL compatible. Customers have the option to use their high-speed
access to connect to any ISP (Internet Service Provider) of their choice.


Telkom‟s ADSL is a broadband access service that provides customers with a
dedicated link to the Internet. It not only provides customers with a data transmission
to their PC‟s at significantly higher speeds, it is an always-available connection and a
service that can transmit voice and data simultaneously. Telkom‟s shaped ADSL
offering is targeted at the small business and higher end of the residential market
that have a moderate volume of Internet traffic and requires an always available
service. Telkom‟s ADSL offering is not designed to offer bandwidth intensive
communications, such as peer-to-peer applications.


It would appear that one of the most contentious issues in respect of Telkom‟s ADSL
offering has been the capping of the service. As of the launch of the product,
Telkom‟s ADSL has been limited to a basic Internet access monthly cap of 3Gbyte.
Although the implementation of the cap was introduced later, the capping of 3 Gbyte
was always a condition of the product offering applying to all ADSL subscribers and
enforced by all ISPs providing the service. It should be noted that ADSL is a shared
access to the Internet and an increase in the subscriber base therefore results in
slower Internet download speeds on the international links, which is the key reason
for capping. Capping of the service offering ensures that customers enjoy the true
ADSL experience of fast Internet. The 3Gbyte cap is measured on total usage. Both
local and international users who exceed the cap are redirected to a more limited
international pipe, resulting in slow international throughput. It is evident that Telkom
had to implement the capping to ensure that service experienced by the majority of
ADSL users is not negatively affected by usage of a small number of customers.



14 January 2005                                                                                           4
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


In response to some customers wanting more immediate access to a wide range of
multimedia services, Telkom launched an ADSL unshaped service in which all
protocols share the available bandwidth equally. 4Gbyte unshaped service offers
subscribers unshaped bandwidth and a higher data transfer rate than the existing
3Gbyte shaped service. Subscribers however always have the option to purchase an
additional username to overcome the capping or to access the Internet on a normal
dial-up connection. Should a customer purchase a further user name and password
from their ISP (which has nothing to do with Telkom‟s ADSL access service), they
will obtain an additional 3Gbyte / 4Gbyte worth of throughput for the month. In such
an instance subscribers are charged at the normal Telkom tariff per minute usage,
even though the traffic usage won‟t be allocated towards their allocated bandwidth.


Telkom is perturbed by the fact that the Authority is conducting an enquiry on the
functional characteristics of a service.




14 January 2005                                                                                           5
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123




4.      DETAILED COMMENTS


Although there are areas that Telkom believes could be improved in the main section
of the Discussion document, Telkom will focus on the specific questions as posed by
the Authority:




Question 1: Does Telkom inform widely its potential subscribers about all ADSL
modems approved by ICASA? If so, how?


ADSL modems, just like POTS (Plain Old Telephone Systems), are classified as
CPE (Customer Premises Equipment), are deregulated and subject to competitive
supply. ADSL customers are sophisticated users of telecommunication services and
it is Telkom‟s view that such customers understand that ADSL modems (like any
other modem) can be purchased from suppliers other than Telkom, e.g. Game,
Makro etc. Furthermore, the Authority stated very clearly in Notice 66 of 2002, that
the supply of CPE has been liberalised and no one party may claim the sole right to
supply any type of CPE. Telkom believes that it is the Authority‟s responsibility rather
than licensees‟ to educate consumers and to inform them about the provision of
CPE.


Indeed, Telkom is not required by any licence condition to inform customers of every
item of CPE (telephones, fax machines, PABXs, modems, etc) that has been type
approved by the Authority. Telkom although not obliged to, as a socially responsible
company does inform potential subscribers and current ADSL subscribers of all
ICASA approved modems. This information can also be obtained from Telkom‟s
webpage at www.telkom.co.za/requirements.jsp
See attached documents printed from the Telkom website (Annexure A)




14 January 2005                                                                                           6
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


Question 2: Should customers be restricted to only two suppliers of modems?


Telkom is perturbed by what appears to be the Authority‟s understanding that
customers are restricted to only two suppliers of modems. As stated earlier, the
Authority‟s Notice 66 of 2002 clearly stipulates that the supply of CPE has been
liberalised and no one party may claim the sole right to supply any type of CPE. In
addition, the Authority‟s regulation on ADSL CPE (Notice 1488 of 2002) also
stipulates the standards to which any supplier of ADSL modems have to adhere to.


In accordance with the Telecommunication Act, the Authority type approves all CPE,
including ADSL modems connected to the telecommunications network. Customers
are therefore not restricted to only two suppliers. ADSL modems are deregulated
CPE, and customers therefore are free to purchase any type approved modem.
Telkom is not aware of any supplier complaining from being excluded in the
provision of ADSL modems. At a meeting between Telkom and the Authority on 7
March 2002, it was agreed that the Authority would inform suppliers of ADSL
modems to submit their modems for functional testing by the Authority.


Telkom would like to make use of this opportunity to also point out that Telkom has
only filed prices for two different ADSL modems as a non-basket services does not
mean that customers are restricted in any manner to purchasing either of these
modems. The provision of ADSL modems is not PSTS, but because Telkom is the
provider of last resort, Telkom does file the provision of CPE with the Authority.
Telkom like any other supplier (e.g. Makro), only stocks a limited range of modems.




Question 3: Should Telkom guarantee the throughput speeds from the service?


It is Telkom‟s view that it is not the Authority‟s responsibility to determine the
functional characteristics of licensees‟ services (i.e. determine operational matters)
but rather to ensure that licensees adhere to the stated terms and conditions of
service provisioning, which are approved by ICASA.



14 January 2005                                                                                           7
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


Customers subscribing to the service are informed about the terms and conditions of
the ADSL service, which clearly states that the throughput is not guaranteed. Telkom
sells its ADSL service only if the customers accept the stipulated terms and
conditions. Indeed, Telkom offers a range of Internet access services with different
terms and conditions and obviously at different prices. Customers have the option of
choosing a service that meets their specific requirements and once such choice has
been made, have to accept the terms and conditions.


Telkom cannot guarantee throughput as bandwidth is shared. This is an international
norm and also the reason for the capping of the service. In addition, Telkom cannot
guarantee throughput, as Telkom does not have control over Internet congestion,
locations or capacity/speed of equipment and websites accessed. It should be noted
that a guaranteed throughput would significantly increase the price of the service and
make it unaffordable to the majority of customers.




Question 4: Did Telkom inform its subscribers that they intended introducing a cap of
3Gbyte on the service? If so, when and how?


The cap was communicated as part of the product offering from date of launch but
was only implemented once the ADSL base reached a critical mass and excessive
bandwidth utilisation impacted negatively on user experience. As the capping is a
functionality of the Internet product the onus is on the ISP‟s to communicate any
changes imposed on them by SAIX. Telkom as an ISP in its own right can only be
held responsible for Telkom Internet customers. Telkom Internet published its
intention to impose the capping on its website media releases while Telkom also
made mention of the capping on its ADSL access website.


Prospective customers requiring information pertaining to Telkom products are
referred to Telkom‟s web page www.telkom.co.za. If a customer clicks on “ADSL”,
the web page pertaining to “ADSL access” services will be displayed. On the web
page, www.telkom.co.za/ADSL/description.jsp, the customer is referred to certain
notes, which inter alia stipulates:


14 January 2005                                                                                           8
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


   that the ADSL is a best effort service and no guarantees are provided on
    throughput
   to enable all ADSL customers with a reasonable service a 3Gbyte limit is placed
    on international bandwidth so that customers do not abuse the international
    bandwidth and to equally distribute the limited bandwidth to end-users.
   once a customer exceeds the 3 Gbyte volume limit for a specific month, his/her
    international traffic will be transported over a slower international link without
    affecting his/her local access. It is clearly stipulated that the customer will
    experience slower access speed on the alternate international link, as he/she will
    then be sharing that link with other customers who exceed their 3 Gbyte cap


The “terms” of the ADSL service can also be found the web page. If a customer
clicks on the terms icon, the terms and conditions with of the ADSL services will be
displayed.




Question 5: Is it reasonable to put a 3Gbtye cap on the service? Given the capping
of the service, do the subscribers still get the promised 512kbps downstream speed?
Please explain?


Once again Telkom is concern by the line of questioning, as it would appear that the
Authority is inviting comments with regards to the functional characteristics of the
service. The Authority should not intercede in determining the functional
characteristics of a service, which incidentally is an operational matter, but should
rather ensure that terms and conditions are adhered to.


The Internet application offered via the ADSL access service is a “shared service”
thus all ISPs are overselling the ADSL service. If this were not the case, users would
simply not be able to afford the service. International bandwidth is purchased at a
premium and therefore limited. The international bandwidth has been costed and the
users are receiving the amount of bandwidth they are paying for. The 3Gbyte cap
protects users from a minority of people who abuse the service and use it for
purposes that it was not developed for, example gaming.

14 January 2005                                                                                           9
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123




The fact that the service is capped at 3Gbyte has nothing to do with the throughput
speed, and will not affect the speed. The monthly volume cap is part of the Internet
Service Providers (ISP) product offering and not a feature of the ADSL access
product and therefore not directly related to downstream speed. Internet service
providers purchase ADSL usernames and passwords from SAIX with a predefined
monthly volume cap attached, these Internet service providers add their value and
mark-ups then on-sell it to end users.


In the case of the 3Gbyte shaped service, capping only affects the international
throughput of subscribers that have reached their cap and not the local throughput
since the subscribers are re-directed over a restricted international link. One needs
to keep in mind that the 512 Kbps download and 256 Kbps upload speed only
applies to the ADSL access line between the customer‟s home/ business and the
exchange the customer is connected to. As mentioned before speeds cannot be
guaranteed once customers access the Internet since Telkom doesn‟t have control
over throughput once the www is reached.


ADSL is not a bit rate service such as, Diginet. The 3Gbyte cap is measured on total
usage both local and international volumes up and down loaded. Once a subscriber
exceeds the cap, he/she is re-directed to a more limited international pipe for the
remainder of the month. It cannot be emphasized any further that if this was not the
case, users would simply not be able to afford the service. The cap has been
introduced to keep the cost of the service affordable.


Bandwidth provisioning rules are being used to allocate bandwidth to users.


As stipulated on Telkom‟s web page www.telkom.co.za/adsl/description.jsp there are
no guarantees provided on throughput.




14 January 2005                                                                                          10
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


Question 6:Telkom has also communicated that the 3Gbyte cap protects users from
a small minority of people who abuse the service. What would be regarded as abuse
of service according to Telkom? Is this an international norm? Is it possible to identify
and penalize the minority that abuses the service?


Telkom‟s ADSL service was never intended for bandwidth hungry applications, such
as gaming or online trading, such applications use large bandwidth, hence affects
the bandwidth that is available for usage by other customers. The 3Gbyte cap has
been introduced to ensure that heavy bandwidth users do not adversely affect ADSL
users.


The capping and port prioritisation is a means of controlling the minority that abuses
the bandwidth. It is Telkom‟s opinion that the 3 Gbyte cap does not impair the quality
or speed of the service received by the majority of the DSL subscribers. Protocol
prioritisation ensures that HTTP, FTP and email receive priority, as these protocols
are assigned to most websites internationally.


It is possible to identify and constrain the minority that abuses the service, and the
capping of the service aims to do just that. Indeed, it could be argued that any
customer complaining about the cap is potentially abusing the service and should
rather utilise other access products to cater for their needs.


Telkom is however pursuing initiatives on DSL enhancements that will allow users
that require additional bandwidth to purchase bandwidth on demand.




Question 7: How does port prioritization affect the quality of service that subscribers
receive? Should Telkom give traffic priority to certain subscribers? When should
subscribers be informed about port prioritization and how it would affect them?


Telkom‟s SAIX has prioritised on the international pipe, the following protocols
surfing, email and file transfer. Bandwidth intensive protocols such as peer-to-peer
applications (e.g. fasttrack, napster, kazaa, e-donkey, etc.) are afforded a lower


14 January 2005                                                                                          11
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


priority and as such will perform worse than a standard dial-up under high
international load conditions. This has been implemented to provide the majority of
ADSL customers with fast Internet experience.


Telkom has implemented a cache server to increase international Internet access
performance. HTTP (browsing), RTSP (real time streaming protocol) and MMS
(Microsoft Multimedia Streaming) are being cached. Most of customers use HTTP,
FTP and email protocols and therefore are more than adequately accommodated on
the 3Gbyte shaped service. Customers who make use of unfamiliar protocols can
subscribe to the 4Gbyte unshaped service which permits customers to make use of
their protocol of choice.




Question 8: Should there be a duplication of payment for line rental i.e. ADSL line
and line rental business or residential line rental?


The residential or business line rental is suppose to cover the costs of the copper
line to the customer‟s premises (access) for basic telephony services.


ADSL is a broadband service, which offers continuous connectivity, i.e. always
available. The service not only provides high-speed data services, but is also a multi
tasking business tool which allows a customer to talk, send and receive a fax, whilst
being on the Internet. Hence the rental charged in respect of ADSL is for ADSL
connectivity, i.e. a broadband service (enhanced service) as opposed to an access
line, which only caters for basic telephony. It should be noted that ADSL service is
always on and that customers therefore, do not pay the normal call usage charges
as would be the case in dial-up connections.


Telkom has also made a submission on the Authority‟s review of Telkom‟s Price
Control and has indicated that Telkom is already incurring losses on the access
portion (the so-called access-deficit).


Telkom believes that there is no duplication of line rental.


14 January 2005                                                                                          12
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123




Question 9: Should Telkom include bandwidth into the costs of line rental and
modems?


Telkom does not include bandwidth into the costs of the ADSL connectivity and
modem prices. The rental of ADSL covers the cost of bandwidth access to the ISP
node. Thereafter, bandwidth is made available by the ISP and charged as part of
their service this is mainly due to the fact that the Authority ruled that the Internet
component of the ADSL service (where the bandwidth is provisioned) is a VAN
service.




Question 10: How can ICASA ensure that the cost of the service is not excessive?


In the past Telkom was the exclusive provider of broadband access, this is no longer
the case. Broadband access is now a competitive service. Currently Telkom,
Sentech, WBS as well as Vodacom/Vodafone (3G) are providing broadband access,
which will also be offered by other licencees, including SNO, USALs and possibly
other mobile cellular operators.


The wireless access products of WBS and Sentech is a substitutes for Telkom‟s wire
line ADSL, and their products are priced with Telkom‟s ADSL in mind (see article in
This Day, 2 August 2004).              Telkom believes that if its ADSL offering was not
competitively priced, it would have been easy for these providers to undercut Telkom
and customers would have migrated in huge numbers to alternative providers.


Telkom would also like place on record that tariffs for Telkom‟s ADSL have been filed
with the Authority on 20 August 2002. The prices of ADSL connection however have
not been increased since the launch, which translates into a reduction in real terms
when inflation is taken into consideration. Although some customers have been
complaining about the cost of Telkom‟s ADSL service, Telkom believes that
customers have significantly benefited from no increases. The inflation used in



14 January 2005                                                                                          13
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


Telkom‟s Basket filings for 2002-2005 reached 16.2% while Telkom has not increase
the prices of ADSL.
The Authority has proposed, in its Discussion Document and Draft Regulation on
Telkom‟s Price Control (See Notices 2490 and 2491 of 2004) to include the ADSL
services as part of Telkom‟s Basket services and hence it will be price controlled.


The Authority also stated the following in paragraph 15 of the Discussion Document:
“15.22. ICASA seeks to encourage further take-up of ADSL and sees its inclusion in the
services basket as helping in this regard. As the current prices for ADSL are relatively high, it
is highly likely that Telkom will decrease in real terms the price of ADSL services over the
next few years...


15.23. By including ADSL services in the basket Telkom will have an additional incentive to
lower ADSL charges, which will promote wider take-up of broadband connections.”


It is apparent that the inclusion of ADSL in the Basket would be a strong incentive for
Telkom to reduce ADSL prices and Telkom accordingly does not believe that the
Authority needs to revise its existing strategy.




Question 11: Considering the cost of the service, should subscribers monitor their
international utilization? Or should it be Telkom's responsibility to monitor?


Internet usage is a feature of the Internet service providers‟ (ISPs) product offerings.
Telkom cannot monitor volume throughput consumed by end users over the World
Wide Web as capping is a functionality of the ISP. It is the responsibility of the ISP to
monitor volume throughput. Customers can monitor their usage by visiting the online
usage indicators that can be found on www.saix.net or on www.telkomsa.net
websites. ISP‟s can choose whether or not they wish to notify their ADSL customers
of their usage.


The tracking tool allows customers to view their detailed daily usage and cumulative
weekly and monthly usage. This tool has been implemented by Telkom to assist



14 January 2005                                                                                          14
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


customers in determining exactly how much of the customers allocated volume has
been used.




Question 12: Should Telkom have a service agreement with ADSL subscribers?
What should it entail?


Telkom provides its ADSL offering in terms of the relevant terms and conditions.
Specific service level agreements are not possible, simply because the Internet
bandwidth is not guaranteed. Subscribers do however benefit from Telkom‟s
standard service levels. Telkom is not aware of any DSL provider internationally that
provide service level agreements, simply because of the very nature of the
technology deployed to offer a shared service. Should any service level agreement
however be offered, it would have a significant impact on the price of the service.




Question 13: Should subscribers of any service be negatively impacted by other
subscribers especially if they are paying a premium for the service? How can the
situation be remedied?


In response to market demands, Telkom has introduced a premium ADSL service
called ADSL Unshaped, which is less restrictive and offers a 4Gbyte data cap. The
shaped ADSL package is optimized for users who like to browse and use e-mail
applications, whilst the 4Gbyte cap unshaped package favors users who mainly use
bandwidth intensive applications, such as gaming. This offering allows subscribers
unshaped international bandwidth and a higher data transfer rate than the existing
3Gbyte shaped service. The development of this new offering was to prevent
customers from being negatively affected by bandwidth hungry subscribers, thereby
catering for the different needs. The initial service suits users who want to access the
Internet for normal Internet usage. It gives priority to HTTP, the protocol designed for
surfing the web or retrieving e-mail.




14 January 2005                                                                                          15
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


Feedback from customers indicates those at the higher end of the scale want more
immediate access to a wide range of multimedia services. With ADSL Unshaped,
Telkom is now able to meet market needs by offering a service in which all protocols
share the available bandwidth equally. Niche users, for example, telecommuters, will
be able to build secure VPN‟s to their corporate headquarters elsewhere in the
world, while gamers can connect to any gaming server anywhere in the world.


As ADSL is a shared service, capping has contributed much to the success of the
service as it protects users against bandwidth abusers thus giving every user a good
ADSL experience unlike other services on the market that are uncapped. Users who
require more bandwidth can buy additional 3 Gbyte segments to supplement the
bandwidth package with Telkom‟s standard offering.


Telkom is continually unwrapping solutions that appeal to a cross section of both
voice and data customers, and as such Telkom has stepped up its efforts to offer
enhanced services to high-end customers.


The South African Internet eXchange (SAIX) specifically implemented the port
prioritisation and monthly volume cap as measurements to ensure that the available
bandwidth is spread equally amongst DSL users. These conditions have been
implemented in the best interest of the customers and if the above conditions were
not implemented it would result in an increase in price to the customer in order to
maintain the same level of service.




Question 14: On average what kind of service do ADSL subscribers experience?


Telkom has improved the level of user satisfaction by extending the reach of ADSL
to all major metropolitan areas and have seen a 661% surge in the ADSL customer
base from 2,669 customers to 20,313 customers as at 31 March 2004. As of
September 2004 Telkom saw a further increase of ADSL customers, reaching a high
of 36,503 customers, which simply eludes to the market being satisfied with the
ADSL service offering.


14 January 2005                                                                                          16
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123




Residential customers have indicated that expectations about ADSL‟s ability to
multitask were met quite well. These customers also indicated a 69% rating of
satisfaction for being able to simultaneously make voice and data telephone calls
whilst on the Internet. A host of subscribers (83%) also thought that their current ISP
has good to excellent competence to offer Internet Powered by ADSL.


Overall Telkom‟s residential customers using the ADSL, have listed three highest
expectations of the service:
   ADSL‟s ability to make/receive calls/faxes while surfing the net, 86%
   Offers an always-available connection to the Internet, 85%
   Provides a broadband connection to the Internet, 81%


The three highest expectations of ADSL have also turned out to be the three major
drivers to purchase the service. With regards to the capping of the service, only 22%
of the subscribers felt that the 3Gbit was insufficient. Majority of subscribers (81%)
stated that it would be an even poorer idea if Telkom were to cut off their ADSL
connection for the remainder of the month once the cap was reached.


Telkom‟s business customers that have subscribed to the ADSL service have
indicated a very good to excellent level of understanding of the ADSL functions and
applications. In this segment of ADSL customer base (60%), speed proved to be
very strong deciding factor, followed by pricing and always-available connection in
taking up the service. Only few business customers (18%) have indicated that they
may cancel their subscription, as a result of problem(s) that hey could have
experienced with ADSL. These customers have expressed satisfaction on the
convenience of buying only when needed and having the option of a backup system
should the limit be exceeded, and the availability of an extra bandwidth.


Of Telkom‟s ADSL customer base, 88% of customers have expressed an overall
satisfaction with the service.




14 January 2005                                                                                          17
Telkom Submission on the Section 27 enquiry with regard to the provision of ADSL services as published on 17
December 2004 in Notice 2966 of 2004, Government Gazette 27123


Irrespective of problems that could have been experienced, 62% of ADSL customers
were unlikely to cancel their service subscription due to problems experienced, if any
at all.


5. CONCLUSION


Telkom‟s shaped ADSL offering is targeted at the small business and higher end of
the residential market that has a moderate volume of Internet traffic and requires an
always available service. Telkom‟s ADSL offering is not designed to offer bandwidth
intensive communications, such as peer-to-peer applications.


From date of launch (August 2002), Telkom ADSL has been limited to a basic
Internet access monthly cap of 3Gbyte, although the implementation of the cap was
introduced later in the product cycle when, as expected, volumes made it necessary.
The capping of 3Gbyte was always a condition of the product offering applying to all
ADSL subscribers and is enforced by all ISPs providing the service. ADSL is a
shared service, and as such an increase in the subscriber base results in slower
Internet download speeds on the international links, which is the key reason for
capping. Capping of the service offering ensures that customers enjoy the true ADSL
experience of fast Internet.
Telkom has not increased the prices of its ADSL service as from August 2002 while
other services have increased by more than 16% over the same time. The Authority
has already proposed, as part of its Price Control review, to include ADSL in the
Basket, which would add to further pressure for price reductions.


Although there are some dissatisfied customers (mainly because of the 3Gbyte cap
and whose needs could be met by other access technologies available from Telkom
e.g. Diginet), 88% of Telkom‟s ADSL customer base has expressed an overall
satisfaction with the service.




14 January 2005                                                                                          18

				
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posted:12/7/2009
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Description: ADSL