'Particularly among small, medium and micro enterprises (SMEs), it is a solution that works, at a price that has not scared them off. For consumers it remains expensive, and that it is the source of most of the criticism.'

For now, says Goldstuck, Telkom can continue to rely on continued demand from SMEs, as well as pent-up demand from high-end consumers.

Only after it has met this demand will it be forced to address pricing issues, unless the regulator steps in first.

The barriers to consumer entry also mean that broadband will not grow South Africa's Internet user base dramatically in the short-to-medium term.

The report, which forms part of World Wide Worx's annual study of the Internet access market, shows that if broadband growth rates projected for 2006 continue through to 2008, the broadband market will still only represent around 14 percent of the Internet user base.