Uncapped broadband should be retired

Jan Vermeulen

Jan Vermeulen is a technology journalist and web developer at MyBroadband. After receiving a Computer Engineering degree at the University of Pretoria he worked at...

Full Profile

E-mail

South Africans got their first taste of relatively affordable uncapped broadband this year when MWEB launched its uncapped ADSL offering.

The sustainability of uncapped ADSL services was questioned by a number of industry players, with the wholesale cost of ADSL revealed as too high to be able to make a profit from users that consume a lot of bandwidth.

Africa INX has also stated that it couldn’t commercially justify an uncapped product. “We firmly believe that short of substantial reductions on the cost of IP Connect, Local and International transit bandwidth fees, the capped ADSL model will return to being the most used and reliable service offering in South Africa,” said Africa INX MD Stuart Hardy.

One of the prevailing themes at SATNAC this year included the increasing importance of data services compared to more conventional telecommunications services such as voice.

SATNAC is a Information Communication and Technology (ICT) conference hosted annually by Telkom at the Spier Estate in Stellenbosch.

Part of the discussion surrounding data access was the need to change the way incumbent telecoms companies sell it, as well as ensuring their business models are sound.

There was agreement among many keynote speakers and panellists that telcos needed to move away from selling raw data access towards providing services as well as entering the applications space.

Andrew Snead, Regional Partner for Sub-Saharan Africa from Delta Partners, delivered a presentation where he sought to challenge conventional telecommunications operators’ view of over-the-top (OTT) players such as Apple, Google and Skype.

OTT players are those companies who offer services that operate over networks provided by conventional telecoms operators such as Telkom, MTN, Cell C and Vodacom. YouTube and Skype are examples of such services.

A common complaint about OTT players is that they are able to operate internationally in a mostly unregulated environment on a network that telecoms companies provide in typically heavily regulated environments.

Snead argued that OTT operators are driving the increasing demand for bandwidth, but that economic rationality needs to return to the industry.

Telecoms companies need to stop providing “all you can eat” packages, he said.

Ben McCahill, director of mobile business development in Europe, Middle East and Africa at Tellabs agreed saying that uncapped broadband is a thing of the past during his presentation entitled “Delivering value in a rapidly changing marketplace.”

In his advice to telecoms operators, McCahill said that operators should ensure that they bring users with them as they retire “all you can eat” models.

These opinions are in conflict with that of Ron Reddick, Chief Information Officer of Cell C, who said he was surprised by the existence of capped and uncapped packages when he first arrived in South Africa.

Reddick thinks that it’s necessary to get rid of caps. “It’s like the dark ages of data,” Reddick said.

Uncapped broadband should be retired << Comments and views