Moneyweb reports today that fixed-line operator Telkom has cut its retail price of international bandwidth to all destinations by 30%, with effect (retrospectively) from May 1.

"Speaking exclusively to Moneyweb earlier today, Steven Hayward, managing executive for retail marketing, said the new rates, especially on the lower speed connections, now “compare favourably” with pricing of bandwidth globally.

"In effect, the 30% saving – described by Hayward as 'very significant' – will filter through to consumers via their value-added network services (VANS) operators and internet service providers (ISPs). In basic terms, these would buy wholesale international bandwidth from a company like Telkom and resell “portions” of that access to its subscriber.

"Rudolph Muller, founder of consumer website MyADSL, says that this is 'good news'. He says a 30% cut is a 'sizeable reduction' and that he 'couldn’t complain'.

'Obviously, we’d want to see more but this is a good start,' he adds.

Muller says that consumers should see value-adds instead of price cuts from the mobile providers as MTN and Vodacom engaged in a pricing war earlier this year.

He says the price reduction should filter through to the consumer, especially considering that a significant portion of South Africa’s internet traffic is backhauled to international destinations.

The decrease is the fifth significant reduction in international bandwidth prices (international private leased circuits) during the last three years.

Telkom’s Hayward says the price of a 2Mbit link to Europe will now cost R62 000 per month. Three years ago, the same connection would have been priced at R186 000.

More at Moneyweb