Telkom

The first use of telecommunication in South Africa happened in April 1860 was a single line telegraph connecting Cape Town and Simonstown. In 1879, the first undersea links were introduced, first connecting Durban and Europe. In the 1960s, South Africa was connected to 72 nations and total outgoing annual international calls numbered over 28,800. Telkom emerged in 1991 from the South African Department of Post and Telecommunications (SAPT), the former postal and telecommunications service provider. The Post Office Amendment Act 1991 split the department into the Postal Service (SAPO) and the Telecommunications Service (Telkom).

In 1994, South Africa launched its mobile operations, underwritten by Telkom in partnership with Vodafone. This subsidiary grew to be Vodacom, which Telkom sold in late 2008 in preference for its own 3G network (established as 8ta, but now Telkom Mobile).

Vodacom has a subscriber base of more than 45M, with an average revenue per user of more than R60 across both rural and urban subscribers. Vodacom, together with the other operators, have come under criticism in late 2009 by government and the public for high interconnect charges.

Telkom was managed by US-based SBC Communications (now AT&T Inc.) from 1997 to 2004. SBC has since sold its interest in the company, after reducing operational expenditure (reducing staff resources, etc.) and increasing revenue by increased product prices, thereby increasing the share-price for greater ROI.

In 2005, the Department of Communications redefined the Electronics Communications Act, which consolidated and redefined the landscape of telecommunications licensing in South Africa (both mobile and fixed).

In 2008, the company was the market leader in the broadband space, with more than 500,000 customers on 2-40 Mbit/s DSL; it dominates the managed services market and has more than 250 corporate customers on its order book. Telkom SA operates 4.5M fixed access lines, bases on its 2008 Annual Report. The competitive landscape in South African telecommunications has evolved significantly in recent years, providing residents with far more options for connectivity than they had before, including far faster speeds via fiber-to-the-premises infrastructure.

Jeffrey Hedberg was appointed acting group chief executive officer on 7 July 2010 following Reuben September's resignation. Jeffrey was the CEO of Cell C from 2006 to 2009. However, on 13 January 2011, TechCentral reported that Hedberg would quit Telkom by the end of March 2011, citing that he felt that he would not be given the mandate he needed to fix Telkom commercially and operationally.

In 2013, allegations of corruption in terms of poor procurement practice, nepotism and mismanagement were unveiled.

Products and services

Telkom ADSL

Telkom provides ADSL retail services via their ISP Telkom Internet to consumer and business customers, and through Telkom Wholesale to other licensed operators. Most ISPs in South Africa, such as Afrihost, utilise Telkom's copper infrastructure for reselling ADSL services.

Telkom provides ADSL with POTS. According to Telkom's figures, 92% of exchanges have been upgraded to support ADSL. Telkom is currently the largest provider of fixed-line broadband in the country, with 412 190 subscribers according to the 2008 annual report.

Telkom ADSL is billed as an add-on service to a POTS voice line. A PPPoE account, which can be provided by most ISPs, must be purchased separately to the ADSL connection for internet access. ISPs are divided into two categories, those who purchase IPConnect from Telkom and those who resell PPPoE accounts from IPConnect ISPs or Telkom themselves. IPConnect is a Telkom bit-stream access product allowing ISPs to route internet bandwidth from their ADSL subscribers over their own bandwidth.

Originally, three connection rate ranges are offered (associated with different connection fees) which are "Fast" (1024/384 kbit/s), "Faster" (up to 2048/512 kbit/s), "Fastest" up to (10240/1002 kbit/s (ADSL2+)) of bandwidth for downstream/upstream respectively existed. The actual speed obtained can vary depending on line conditions. These connection rate ranges have since changed, with the minimum speed currently being 2048/512 kbit/s and mid-range 5120/512 kbit/s.

Criticisms

Monopoly and state ownership

High cost of Internet access is a major point of consumer frustration in South Africa. Telkom's monopoly, backed by government investment, over fixed line provision and international access is often pointed out as the primary reason for the high costs of telecommunications.

The continuing monopoly of Telkom in South Africa's communications industry, and government's large stake in the company, have been perceived by the public, consumers, and the private sector as not being in the public's best interests. The South African telecommunications regulator ICASA is overburdened and restricted in its capabilities as handed down by the Department of Communications.

Telkom has a monopoly of all international calls originating within South Africa, excluding VoIP, and of traffic over the SAT3 cable that provides most of South Africa's international bandwidth. The indecision over the second network operator Neotel, to Telkom's advantage, is also not considered to be in the public interest.

Telkom has also attracted attention for improperly conducting itself in a contract dispute with Telcordia on account of non-delivery of an integrated FlowThru solution, resulting in a decision from the Supreme Court of Appeal against its favor in which the judge described Telkom's legal team as conducting "verbal manipulation".

On 19 January 2007, a full-page advertisement was taken out in The Mail and Guardian, a national South African newspaper. Money for the ad was donated by dissatisfied South African individuals and businesses. The page was used as a public outcry, detailing some of the things Telkom has done, in hopes of bringing more attention to the current situation in South Africa's telecoms industry. The effort was organised by the Telecoms Action Group, TAG.

ADSL capping

Perhaps one of the biggest criticisms of Telkom was its introduction of a monthly traffic limit or "cap". According to Telkom, this was a measure instituted in order for the South African network not to become "congested" with an overflow of information. However, the general feeling in the South African ADSL community is that monthly traffic limits were strategically put in place by Telkom in order to obtain the maximum amount of money from ADSL users.