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Telkom’s line rental fee to be a thing of the past

| Economic factors

Telkom is eyeing removing the line rental cost item from its internet bills for consumers, according to a report on BusinessDay TV.

Line rental is the fee Telkom charges for its customers to have an active phone line connected to their homes. Telkom users are then also charged extra for voice calls and data on top of the line rental fees.

For years, critics have lashed out at Telkom over this fee, slamming it as an unnecessary additional cost to connectivity in South Africa.

Telkom has also hiked this fee in recent years. The price for line rental increased just over 13% from R166 per month to R189 per month in May last year.

Telkom also reported in its annual results on Monday that its fixed-line subscriptions revenue grew 5.2% to R8.4bn “as a result of customers migrating to bundled offerings and average line rental tariff increases for business and residential customers.”

But Telkom’s chief executive officer Sipho Maseko, in an interview with BusinessDay TV, has said that the line rental fee, as an item in consumers’ internet bills, is set to be removed in future.

“It’s less about lines but actually about the service,” said Maseko in the interview.

“Very soon, in your own household, your bill will no longer have ‘line’. It will just be a package of 25GB or 50GB; we’ll price it , and there won’t be an itemised line that says line rental,” said Maseko.

“And more and more you won’t see it, because what we do see is that data traffic and usage is increasing phenomenally. And I think that we’ve been able to balance that in a very, very delicate way,” added Maseko.

It’s unclear as to when Telkom could implement this move and whether or not the line rental cost item could be absorbed into the data package cost item.

Telkom spokespeople did not immediately respond to Fin24’s request for comment on this issue on Wednesday morning.

Nevertheless, the company’s move to rethink line rentals comes amid its falling fixed line user numbers but growing ADSL and fibre internet customers.

In its annual results announcement on Monday, Telkom reported that its total number of fixed phone lines fell 6.5% from 3.4 million to 3.2 million.

The company, though, reported a 2.2% increase in its fixed-line broadband customers from 1 million in March 2015 to 1.02 million.

Telkom has further passed 81 503 homes with fibre while it’s targeting passing one million homes by 2018.

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