The rise and fall of ADSL

South Africans are quick to complain when fibre network operators increase prices or cut cheaper, slower packages from their product portfolios to compensate for the weakening rand and rising inflation.

How soon we forget.

Telkom launched its first asynchronous digital subscriber line (ADSL) trial in Gauteng in August 2002 for R966.72 per month.

That price included the ADSL access fee (R680), your regular Telkom landline (R67.72 per month), and a Telkom Internet account with a whopping 3GB of data (R219).

This got you the lightning-fast speed of 512kbps — 100 times slower than the “entry-level” 50Mbps speeds many fibre network operators offer today for cheaper.

Of course, 512kbps was already nine times faster than the agonising 56kbps dial-up speeds most of us were stuck on (though it had a great theme song), and it was always-on.

The Internet was also a different, less bandwidth-hungry place.

But even then, 512kbps was hardly anything to celebrate when Americans were rocking T1 cable connections of 1.5Mbps, and people in Europe were already enjoying faster ADSL services.

The 3GB cap was also not enough for most people, as Telkom liked to claim.

Back then, you couldn’t just bolt on more data after consuming your cap — you had to buy a whole new “3GB ProLog” ADSL data account. Whatever you didn’t use, you lost.

On top of that, Telkom’s ADSL service was terrible at launch.

This cannot be overstated. It was utterly unusable during the day.

Telkom hid behind its terms and conditions, which said ADSL was a best-effort service (polluting the term “best effort” forever), but everyone knew the truth — it crippled ADSL to protect its existing Diginet leased line and ISDN business.

It was so bad, communities came together online to discuss how they could take on Telkom about the quality of its ADSL product.

MyBroadband traces its origins to this moment, with the launch of the original MyADSL.co.za forum.

This was in 2003, a year before the first version of TheFacebook would launch at Harvard University.

The organised consumer action ultimately led to Icasa creating ADSL regulations.

Over time, the quality of Telkom’s ADSL improved, and the prices came down (although Telkom did continue to increase its analogue telephone line rental fee annually).

Internet service providers started offering data top-ups, with the going rate decreasing to around R50 per gigabyte.

Then, in September 2009, Afrihost shocked the market by launching ADSL data for R29/GB — below cost price.

Afrihost bet that wholesale prices would come down and that it would reach sufficient scale for the price to become profitable.

Despite attracting criticism from other players, its bet paid off, and Afrihost is one of South Africa’s biggest ISPs today.

Not that it could rest on its laurels after shaking up the market because another contender was hot on its heels.

Within six months of Afrihost launching its R29-per-gig special, on 18 March 2010, Mweb launched uncapped ADSL for R219 per month — the same price Telkom had charged for 3GB back in 2003.

Tekom’s ADSL business showed healthy growth every year until 2016, when it peaked at 1,011,120 subscribers.

Two years prior, a small upstart fibre outfit called Vumatel had burst onto the scene and begun connecting up Johannesburg leafy suburbs, starting with Parkhurst.

Initially, Vumatel was dismissed as another niche fibre player that would provide a small number of wealthy households with an ADSL alternative until the big guns rolled in.

Those big guns included Telkom, which had already started modernising its fixed-line network in 2012.

Telkom had embarked on a project to roll out street cabinets called multi-service access nodes, which allowed for DSL speeds up to 40Mbps and paved the way for future fibre-to-the-home (FTTH) deployments.

The other big guns were Vodacom and MTN, which were aggressively rolling out fibre to their base stations to support LTE and 4G.

South Africa’s fibre market was theirs to lose.

However, the big players dithered, leaving the market open for a hungry new entrant like Vumatel to claim a sizeable chunk of the market.

As it became clear that the conventional wisdom about FTTH demand and business case was wrong, and that Vumatel was not a niche player that would be confined to a few neighbourhoods, Telkom sparked.

But it flip-flopped its network investment focus between its mobile operator and fibre infrastructure.

Telkom also flip-flopped between telling ADSL customers that it was switching off its copper network and launching new products for it, like Naked ADSL.

By 2019, Vumatel officially overtook Telkom as the biggest FTTH operator in South Africa.

Also in 2019, Rain commercially launched 5G in South Africa.

In September 2021, Rain launched a basic uncapped 5G service for R499 per month.

Vodacom and MTN also brought their 5G networks online during that time.

It was the death knell for ADSL.

In September 2019, Telkom’s results showed that it still had around 580,000 DSL customers on its network.

Four years later, it had plummeted to 12,211 subscribers — close to the number Telkom had reported twenty years ago when ADSL was just beginning.