According to Matthew Tagg, CEO of local Internet Service Provider, Web Africa, Naked DSL could seriously spice up competition in the SA telecoms space.
Naked DSL is an ADSL broadband service without a traditional analogue phone line attached. In South Africa that sounds almost like a revolution, so accustomed have we become to the bundling of a phone line with ADSL services.
Consumers in countries such as Australia, Switzerland, Portugal and France, amongst others, are turning to Naked ADSL for the increased communication choice levels it offers. The combination of a cellphone and a Voice over Internet Protocol (VoIP) handset, which utilises the ADSL line to make phone calls, can amount to significant cost reductions, better service levels and generally increased choice and flexibility for consumers.
Furthermore it would also level the playing field and allow fairer competition between ISPs and telecoms operators as a customer would be able to get all their services from one provider on one bill. This means simply fault resolution and better customer experience.
Naked DSL makes sense in South Africa because of the high adoption rate of cellular and other wireless technologies as opposed to fixed analogue line. For example in the UK the case for Naked DSL is perhaps not as strong because fixed analogue line penetration is more than 90% versus around 10% for the South African population.
Our current reality is that service providers like Telkom enjoy very healthy margins by bundling the phone line and ADSL connection. So, unless there is significant demand from consumers and ISPs for Naked DSL, we’re not likely to see it becoming an issue on the regulatory table any time soon.
Ultimately, Naked DSL is about user freedom and choice. It’s about using the power of the Internet as you want to – and if that means switching to VoIP calls and a cellphone and abandoning the idea of a land line altogether, then the consumer should be able to do just that. Currently that choice just doesn’t exist in South Africa. Consumers are dictated to when it comes to how they make voice calls, because they are forced to pay for an analogue line whether they want it or not.
However, it appears that we are no exception to the global norm. As in the USA, in Australia the Australian Competition and Consumer Commission (ACCC) watchdog had to put pressure on the industry to reduce the cost of wholesale access to the country’s copper network. This enabled ISPs to offer Naked DSL at extremely affordable prices, providing stiff competition for the traditional incumbents.
Considering the recent actions taken by our regulator’s new leadership team in the mobile space to reduce inter-connect rates (possibly another nail in the coffin of the traditional land line?), the time for change might finally have arrived. With enough demand from consumers to be allowed to go naked, it is possible that we will follow the rest of the world and force service providers to unbundle ADSL and phone line offerings.
The future of Naked DSL in a local context remains to be seen. The key point is that it will drive down total broadband costs and help prevent the ‘legacy telecoms tax’. It will also help ADSL compete with other broadband products like 3G. We won’t know for sure until we start having the conversations. But one thing is for sure: Naked DSL is a sexy solution with lots of potential. It’s certainly worth a spin.
Matthew Tagg, CEO of local Internet Service Provider, Web Africa
It is good to see that someone in finally saying some about the consumer being ripped of by the fixed line operator.
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