| Wed 13 Jun 2007, 8:11 | | TKG - Telkom SA Limited - Telkom price reductions |
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TKG
TKG
TKG - Telkom SA Limited - Telkom price reductions in the pipeline
Telkom SA Limited
Registration no. 1991/005476/06
JSE and NYSE share code: TKG
ISIN: ZAE000044897
Telkom price reductions in the pipeline
In its drive to make telecommunications more affordable and accessible,
while aligning tariffs with cost and growing our business, Telkom customers
- especially DSL subscribers - will benefit from overall price reductions
from August 1 this year if price changes filed by Telkom are approved by
the Independent Communication Authority of South Africa (ICASA).
"We are reducing our prices again in line with our overall drive to defend
and grow our revenues. The proposed price reductions will not only ensure
more savings for our existing customers but will also attract new entrants
to the broadband experience." says Reuben September, Telkom`s Acting CEO.
The regulatory formula would have allowed Telkom to file a change in the
basket of products of 8.7%. Therefore, Telkom could have increased its
prices by 8.7% but instead is filing for an overall price decrease of 1.2%.
"That we have kept our increases well within these limits and have filed
for an overall price decrease of 1.2% on our basket services, clearly
demonstrates our on-going commitment to our customers. In addition, it
reflects our determination to make telecommunications more affordable and
accessible".
"While the net impact of the proposed prices will vary among customers the
overall effect will be a reduction in the cost of telecommunications in
South Africa."
The main beneficiaries of the proposed price changes will be DSL users.
They will enjoy an average reduction of 18.2% and in the entry level (up to
384 Kbps Access) of 38%. The new broadband offering - the entry level Do
Broadband - which combines DSL 384 Kbps access and the Internet Service
Provider (ISP) - has also been cut and will cost R199 per month (a 29%
reduction).
Business customers of Telkom`s data products will see considerable savings,
with an average decrease of 12%. IPLC (International Private Leased
Circuits) has been reduced by 30% (cable) and 12% (satellite), Diginet
(overall) reduced by 11%, Megalines reduced by 10%, and ATM Express reduced
by 10%.
Further good news is the 10% decrease in long distance call charges - 65c
per minute, including VAT, during Standard Time and 32.5c per minute,
including VAT, during Callmore Time - and a 9% average reduction in
International calls.
Those with family or business ties in the UK and USA others, will
especially benefit, with calls costing 95c and 85c, including VAT, during
Global Peak times and Global Off-peak Times respectively. Calls to
neighbouring countries see an average decrease of 15% during peak times and
19% during Global off-peak times.
The minimum charge for local calls remains unchanged at 59.4 cents ,
including VAT, as does the per minute rate of 38 cents, including VAT, with
a small increase in the Callmore rate (from 16c to 17c per minute,
including VAT).
However, in certain instances business considerations have dictated price
hikes, offset by the reduction in call charges, and include a 12% increase
in line rentals. The monthly rental on analogue lines will increase to
R111.90, including VAT for residential, and R148.68, including VAT for
business.
September says that the reductions in DSL reflect Telkom`s commitment to
making broadband more affordable, attractive and accessible, and it is
making strides in achieving this. In the first year after launching DSL,
Telkom had approximately 20 000 DSL customers. On March 31, 2007, it had
over 250 000 subscribers, reflecting the influence of volume on DSL costs.
He says Telkom`s operational plans are well in place to deal with the
anticipated increasing DSL demand due to increased volume because of the
price reduction. Moreover, approximately 40% of new customers have opted
for Self Install. This easy to use new offering allows customers to do the
portion of the installation that takes place on their premises themselves.
Over and above the proposed price reductions, customers of the Telkom
Closer and Telkom SupremeCall brands (for business) are also enjoying
considerable cost savings. The marketplace has welcomed these value-adding
products with open arms with close to 289,000 customers signing up for
Telkom Closer since the launch.
Although line rental is included in the Closer bundles, the subscription
charge will stay the same. In addition, Telkom has enhanced the offering
with, among others, 30 free local minutes during standard time on the entry
level plan and after these minutes are used up, a lower rate of 49c a
minute - a saving of 19 cents. Good news for Closer plans 3, 4 and 5
subscribers is that they now also get preferential rates on international
calls, paying only 72c per minute for calls to 30 popular destinations.
These rates will apply for peak and off-peak times for calls to fixed-line
destinations.
Says September: "For the past five years we have been aligning our prices
to be more competitive, and in line with international standards and
related cost. They are carefully considered taking the needs of our
customers and economies of scale into account.
"Having complied with regulatory prescriptions, Telkom is confident that
our proposed price changes will be approved by ICASA," concludes September.
Pretoria 13 June 2007
Sponsor UBS South Africa (Pty) Limited
Date: 13/06/2007 08:11:17 Produced by the JSE SENS Department.
