What Telkom can learn from Morocco when it comes to ADSL
By MyADSL, 24 January 2007

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South Africa’s lack of ADSL penetration is of great concern to businesses, consumers and even Government. If compared to first world countries the local situation looks dire, but now other African countries are starting to put SA to shame.


Four years after Telkom launched its ADSL service, it notched up 200 000 subscribers. This gives an average annual growth of around 50 000. One has to say that the growth over the last year was nearly 100 000, but this is still not enough to significantly lift South Africa’s pathetically low broadband penetration rate.

Morocco, currently Africa’s leader in ADSL, has signed up far more customers in a far shorter period of time. Morocco currently has nearly 400 000 ADSL subscribers, double the number in South Africa.

But what makes Morocco more effective than South Africa, or Telkom to be more specific, when it comes to pushing ADSL?

The answer is simple: price and service quality. Morocco’s ADSL offerings are cheaper, better, and have no restrictive usage limits typical of local ADSL offerings.

Cheap Entry Level ADSL Offerings

In South Africa the cheapest ADSL connection, namely a DSL384 service carrying a 2 GB monthly usage limit, is priced at around R 400-00 per month. This is beyond the reach of most South African families.

In Morocco there is an uncapped ADSL 128 Kbps service priced at under R 90-00 per month catering for price sensitive consumers. Their ADSL 256 offering is also still reasonable at R 141-00 per month.

High end services

In South Africa a 1024 Kbps – now a 4 Mbps trial service – with a 3 GB monthly usage limit costs between R 700-00 and R 800-00 per month. This 3 GB allowance is not enough for high-end users, but for a service with a 30 GB monthly usage limit users will have to fork out more than R 2000-00 per month.

When going for an uncapped fiber option for your DSL1024 service the monthly price skyrockets to over R 5000-00 per month, too expensive for most small businesses or home users.

In Morocco high end users have a choice of uncapped, high speed services ranging between 4 Mbps and 20 Mbps.

The 4 Mbps ADSL offering is priced at just under R 500-00 per month while the 20 Mbps service will cost users around R 700-00 per month, both are uncapped.

These prices are definitely far more affordable for small businesses and high-end residential customers than the Telkom offerings.

If South Africa wants to compete in the global, and soon even African, broadband and Internet arena it needs to ensure that offerings similar to those in Morocco become available locally.

Affordability and service quality are the two main ingredients fuelling broadband take-up, and Telkom will be well advised to take a leaf out of Morocco’s book when it comes to ADSL offerings.

well I did mention in the myadsl forums... lets start a bombing spree on all teleskum buildings!

its sad though that everyone knows that telkom is fucking us over yet no one can do a thing about it

Price definitely a factor, says Neotel
By MyADSL, 23 January 2007

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Neotel’s CEO, Ajay Pandey, has put rest to recent reports that Neotel will not compete with Telkom on price.


Pandey met with MyADSL to dispel the uncertainty regarding his recent statements about Neotel’s pricing strategies.

The second national operator’s CEO explained that price is most definitely one of the differentiators which Neotel will use when developing products and services, but added that it is not the only factor which will differentiate them from Telkom.

He reiterated that he strongly believes that local telecommunication prices should be one third or one forth of what they are now, and said that Neotel will certainly do their part to make this a reality for local consumers.

The Neotel CEO however, urged consumers to be patient and to not expect everything to happen immediately, specifically since other factors like interconnection rates are beyond the control of the second national operator.

Neotel also needs to build a network from nearly nothing, something else that takes time. He was quick to state that they did not want to disappoint which was why they wanted their systems to be in place before launching services and products.

He is however confident that their presence in the local telecoms market will have a very positive impact on pricing across the board.

For people who doubt Neotel’s ability to compete with Telkom on rands and cents, Angus Hay, Neotel’s Executive Head of Strategy, pointed out that the company has already taken some business away from Telkom in the cutthroat arena of international voice and IP transit.

According to Hay, it basically comes down to pricing in this arena, and Neotel’s ability to take Telkom on in this field sends a clear message about their willingness to win business through competitive pricing.

Neotel indicated that their service offerings may differ vastly from what is currently available in the market which makes a direct pricing comparison difficult, but when asked directly whether Neotel will compete on price in areas where direct comparisons can be drawn, like with per minute call rates, Pandey unequivocally responded: Yes!

More than pricing

Pandey said that at Neotel they had a more broad based view of what needed to be done which means doing more than just competing with Telkom on price. He stated that users could look forward to innovative packages & services, great service levels and far superior lead times for receiving services from Neotel.

When specifically asked about customer service, something that is sorely lacking at Telkom, Pandey was very firm on this matter. Neotel will aim for sterling customer service…period.

For many consumers the countdown to the end of Telkom’s monopoly in the residential fixed line arena has begun, and from its CEO’s words it looks like Neotel may just be what the local market needs.