Help needed: math model of Telkom ADSL

[Alkine]

I would like to build a mathematical model of how much money telkom are receiving from us (the user base grows exponentially). A few things I need to do this is:
1. The month and year ADSL was released
2. The price changes and package changes to date (when were they released / changed and what was the costs at that time).
3. Also I need the ADSL user base info, as much as I can get so I can plot an accurate graph (eg. there are 100 000 ADSL users Aug 2005).

If you can give information to the day it will help but its not necessary.

With this I can build a nice model in matlab and work out how much money telkom took from us to date. The plan is to see what the results of this model is and then to work from there.

Help on this will be greatly appreciated
Thanks!
----
eek posted in wrong category soz! plz move :o

[Shoove]

Ok, you need to start of with costs.

A DSlam, which is the unit all ADSL users conect to costs around USD$ 55 per port. so if you work that out after an inital cost of lets say R 400 telkom has paid of the quipment to run 1 persons adsl. now you have to work out the cost of getting bandwidth to each dslam, work on around R 200 per 64k of 24/7 bandwidth maintianed.

[pkid]

Umm. Can you explain about the R200 per each 64k of 24/7 bandwidth supplied? Does this mean it costs them R200 a month for this? If so they are making a massive loss on each person?? Because if they need enough bandwidth to guarentee 512k for each connection they are going to have to pay over R1000 a month just for the bandwidth?? :confused:

[Roman4604]

To work out the 'bandwidth required' calculation, you need to know Telkom's contention ratio ... which they absolutely refuse to divulge.

BTW there are other costs ... read my post in this thread -> http://mybroadband.co.za/vb/showthread.php?t=24816

[mystic]

I would suggest using a 50:1 contention ratio as that would be a conservative number because the lower the contention, the more expensive it is to provide the service. A 20:1 contention ratio would cost them more, but I seriously doubt that it is what we're getting. I would expect it to be anything between 50:1 and 100:1.

[mystic]

Also, I've seen some reports (maybe 12 to 18 months old) that talks of $70 - $100 per port. Maybe per port costs have fallen to $55 as stated by now? Again I would use the higher conservative number to give Telkom the benefit of the doubt.

[Alkine]

Hehe, firstly thanks for you inputs, but we can only speculate how much adsl is costing telkom. What I want to do is model how much money they recieve from their adsl costomers. Its easy to work out how much they get with insallations because you only install adsl once, so it will be (total users * price for install). The hard part is the continual non-linear growth of the user base each month, and thats what im interested in for now.

After we have that, we can work on how much its costing them, and then we can calculate how much they are makeing out of this. So this is the first step in the 3 step plan :)

[Gldm]

Hehe, firstly thanks for you inputs, but we can only speculate how much adsl is costing telkom. What I want to do is model how much money they recieve from their adsl costomers. Its easy to work out how much they get with insallations because you only install adsl once, so it will be (total users * price for install). The hard part is the continual non-linear growth of the user base each month, and thats what im interested in for now.

After we have that, we can work on how much its costing them, and then we can calculate how much they are makeing out of this. So this is the first step in the 3 step plan :)

I think most of the info might be in here, but I have a hard time reading it: http://www.telkom.co.za/pls/portal/docs/page/contents/minisites/ir/docs/FINAL-TKG-BOOKLET-2004.pdf

[RoosTa]

I would suggest using a 50:1 contention ratio as that would be a conservative number because the lower the contention, the more expensive it is to provide the service. A 20:1 contention ratio would cost them more, but I seriously doubt that it is what we're getting. I would expect it to be anything between 50:1 and 100:1.

I don't understand how contention ratios, relate to cost.

Please correct me if I'm wrong, but my understanding is:
It costs Telkom the same amount of money to maintain a connection with a 1:1 contention ratio than a connection with a 20:1 contention ratio, the only difference is that Telkom make more money from a 20:1 ratio than a 1:1 ratio since the same line has 20 users contending for that line instead of only 1 user.

[Alkine]

Thanks for the document, I found
Adsl subscribers:
March 31 2003 -> 2,669
Year end -> 20,313

But im not sure if this is the financial year end or the physical year end (dec)

[Alkine]

LaRoosTa, They will make more money from the 1:20 than the 1:1, because they have 20 people to pay for 1 line as opposed to 1 person paying for the whole line. < ah edit it while im typing will you! :D >

But again we can only speculate on this...

[Gldm]

Thanks for the document, I found
Adsl subscribers:
March 31 2003 -> 2,669
Year end -> 20,313

But im not sure if this is the financial year end or the physical year end (dec)

I believe all the data is for financial year March 31 2003 to March 31 2004.

Here's the info on contention ratios from BT:

To provide a cost effective sevice - all ADSL services are 'contended' (shared) at the following ratios:
50:1
ADSL 500, 1000 & 2000 Solo

20:1
ADSL 500, 1000 & 2000 Business

This contention is applied within the BT network - both locally with other users on your telephone exchange and within the BT network as it connects into our network.

What this means in the 'worst case' is that you could be sharing a 500 Kbit/s connection with up to 49 other users. So if they were all using it at the same time 'theoretically' you would only get 10 Kbit/s (not very fast at all - in fact quite a bit slower than a normal modem).

However, 'in reality' this scenario is very unlikely to happen and you should usually find it to be far faster than a modem connection.

ADSL relies on individual users not making unreasonable traffic demands on the network to provide fast access speeds for all - please see here for further details.

Remember if you are not getting the speed you expect it can be due to the contention ratio but also to many other factors including the capacity of the remote site you are accessing, the quality and length of your telephone line from the local BT exchange - see here for more details.

[Gldm]

LaRoosTa, They will make more money from the 1:20 than the 1:1, because they have 20 people to pay for 1 line as opposed to 1 person paying for the whole line. < ah edit it while im typing will you! :D >

But again we can only speculate on this...

It's mostly in the backbone. For every 20mbps of DSL lines (say, 40 512k customers) they'll have 1mbps of backbone fiber capacity at the DSLAM. So not everyone can run full speed at once, they're counting on people idling and sleeping. It's probably around 50:1 or more knowing Telkom. If we knew the contention ratio we could estimate their backbone fiber capacity based on their # of subscribers, and then calculate the cost of that infrastructure.

[BLaZor]

Wait, im sorry for this dumb question, according to my isp i have a 10:1 ratio, what does that mean, up/dl rates or something?

[RoosTa]

Ye, sorry for the edit.

My point is: The maintenance cost for a 1:1 line and a 20:1 line is the same.

If you took 1 line and only 1 person would use that line, Telkom's maintenance cost would still be the same when you take that same line and share it among 20 people. The only difference is, is that a 1:1 ratio will cost the consumer much more than if you share that line/cost among 20 people.

[BLaZor]

so basically you mean the lower the ratio- higher speed but more cost.
ahhhhhh.
thanks for you help.
but howcome 100:1 users get about 50-55kbs with a 512k connection?
explain?

[Alkine]

Because everyone is not useing their ADSL at the same time, and im almost sure that the line ***:1 is a bigger pipe than the other 50 or 100 people connected to it.

But this is a bit off topic on the thread...

[WickedWeasel]

Remeber, bandwidth, has two sides to it, the international portion and the local portion.

EG:

DSLAM ---- > SAIX

They have to connect all the dslams together, so they need to run local loop cables to each one, with the cost of routers, etc as well as maintance on coper eg, there cost is around R 200 per 64k of bandwidth to each dslam, but remeber the only have to run 1:50 of the bandwidth the sell on the DSLAM as the is an over subcribed service.

Based on the following model,

Lets asume Telkom has 90 000 ADSL users, half are 512k and half are 192k

45 000 x line rental (R 599) = R 26 955 000

And

45 000 x line rental (R 229) = R 10 305 000

ok thats is R 37 260 000 per month

Lets asumes that everyoen has to buy an account. which they do at R 150 Telkoms cost

90 000 x account (R 150) = R 13 500 000

Lets add that all together and we get = R 50 760 000

Thats big money and thats per MONTH no wonder they are unhappy with ICASA !

.

[RoosTa]

This is a bit off-topic: Just to clear something up with some proof: http://mybroadband.co.za/vb/showthread.php?t=24717

It is possible that 50 ADSL users could be sharing a 10mb/s pipe.

The pipe connecting your exchange to Telkom could be 10mb/s which means that there could be 50 512kb/s ADSL connection contending for that 10mb/s pipe. This means theoretically that there could be 20 users downloading full blast without a slowdown.

[BLaZor]

So telkom are money making frauds.
If you pay for a 512kb connection, you /have to get THAT connection.
otherwise its cheating, but were talking about telkom here.
I say we should have a protest.
Off the topic here- ONe good thing for bin-laden, He should have crashed into the telkom head office instead of the towers:D

[mystic]

The contention ratio doesn't influence the cost of the provisioning or maintenance of the line from the customer premise to the exchange or the DSLAM port cost. However, it does have a cost effect on the ATM backbone costs. Let's assume all users are on a 512Kb line. On a 1:1 contention ratio, Telkom would have to provision 512Kb bandwidth on their ATM backbone for each user. On a 1:20 contention ratio, they only have to provision 512Kb for every 20 users. I don't know if that makes sense.

[Alkine]

But also remember they detirmine the price of the 64k line and the isp, and we know thats over-priced. So in effect they pay way less than what you suggested.

Back to the topic, it looks like April 2005 there were around 60000 subscribers.
I still want to know when the service was first rolled out (its the most important point in the graph)

[RoosTa]

So telkom are money making frauds.
If you pay for a 512kb connection, you /have to get THAT connection.
otherwise its cheating, but were talking about telkom here.
I say we should have a protest.
Off the topic here- ONe good thing for bin-laden, He should have crashed into the telkom head office instead of the towers:D

Off Topic: Well not entirely; If all 50 512kb/s ADSL users tried to use that 10mb/s pipe there will be slowdown.

Telkom CAN guarantee a minimum download speed, if they calculated the ratio's correctly. In Canada a friend of mine has a 1.5mb line, if that line drops below a 1/3 of the download speed, they first do a test to see if it's the their problem or the server they downloading from. If its their problem, they give that person their next month access, free of charge.

[Alkine]

Well this thread is now more about connection ratios than about what I created it for...

[BLaZor]

Ah yes, im using Freedom to surf up here and getting 2mbit connection.
My granny in S.a uses the 512kb BB, but whenever i try to chat to her, she breaks up.
Im coming back down for good to sort this problem but Telkom didnt give her free of charge, and they wanted us to go to court?

[Roman4604]

Well this thread is now more about connection ratios than about what I created it for...Alkine while your aim seems noble, I dont understand what you believe you can achieve by graphing a thumbsuck of Telkom's revenues for ADSL since inception of the service? I say thumbsuck since there are many variables you will not know e.g. distribution of products sold between Bus512 Home512, Home384 & Home192.

Even if you get a ballpark figure for revenue, its pretty meaningless if you cant calculate the associated cost of providing the ADSL service. Here there are many, many more complex variables for which you will not find the answers in these forums.

Without accurate revenue & cost figures, you cannot calculate a meaningful profit estimate and therefore cant answer the question of 'How much is Telkom ripping us off'.

[BLaZor]

Roman, alkine was asking us the rough amount not the actaull profit.
That would take 3months to figure out!

[Roman4604]

Roman, alkine was asking us the rough amount not the actaull profit.Again I ask for what purpose ... unless just to stimulate interesting discussion/speculation.

[Celemasiko]

To work out the 'bandwidth required' calculation, you need to know Telkom's contention ratio ... which they absolutely refuse to divulge.

BTW there are other costs ... read my post in this thread -> http://mybroadband.co.za/vb/showthread.php?t=24816

Usually as a conservative figure its 50:1

[magneto]

Alkine while your aim seems noble, I dont understand what you believe you can achieve by graphing a thumbsuck of Telkom's revenues for ADSL since inception of the service? I say thumbsuck since there are many variables you will not know e.g. distribution of products sold between Bus512 Home512, Home384 & Home192.

Without accurate revenue & cost figures, you cannot calculate a meaningful profit estimate and therefore cant answer the question of 'How much is Telkom ripping us off'.

blah blah blah...alkine i say do make the graph..lets c what the round +- amount that telkom r getting from all of us...
even if u dont inclued the Bus512,every know telkoms is getting more money then.

i think Alkine just wants 2 get average figures...not real ones.for that u mays well go and knock on telkom doors.Hey i here 2 the adsl audit of cost/profit margins.

[Roman4604]

It is my impression that all this myADSL+ICASA vs. Telkom activity/enthusiasm is to force Telkom into meaningfull change re. ADSL service perf. & pricing.

If all we can come up with is "blah blah blah" & "average figures...not real ones" then this will give Telkom all the ammunition they need to label us (myADSL & its forum members) "poephols" and laugh us off.

[Spamtheman]

They have to connect all the dslams together, so they need to run local loop cables to each one, with the cost of routers, etc as well as maintance on coper eg, there cost is around R 200 per 64k of bandwidth to each dslam

I'm curious where you get the figure of R200/64Kbit. This sounds massively high to me. As far as I am aware the DSLAMs simply sit in your local exchange and connect via the ATM network, which delivers a 135 Mbit/s payload on a single link (normally fiber channel). Yes there are some hardware costs (routers) and the cost of cabling but I'd be very surprised if it worked out as high as R200/64Kbit.

[Alkine]

Roman4604 I want the figures for the amount of users according to date, and you will agree with me that the user base is going to grow exponentially until market saturation is reached. I want to predict / play with the numbers and see what the possible total amount of ADSL users might be in say a year’s time. This has no link to the ICASA findings whatsoever. A possible assumption that we can get from the graph is how much money telkom received from the total ADSL user base to date, and again that just so we can look at it and say: "ooh interesting".

On the figures I do not know, there is something called an engineers approximation, before December last year there was no ADSL 384k or 192k and we can thus assume that the average price for the ADSL laid between the business and home DSL prices. How much to either side is another value we can play with. After the introduction of those services business users are still only able to get the 512k option and we can take the amount of users at that date as a minimum value for the 512k uses although they would also certainly grow.

I’m sure that the recent growth of the ADSL user base is because of the introduction of the slower speed lines and it will be taken into account.

The thing with a mathematical model like this is it will only help you to guess more accurately than before, it’s still guessing.

[magneto]

rate they wont laugh it off..if u stir the pot enough, change will happen.
if have have't seen already by the stir that is.that the share price have dropped a little by 0.6%.hopefully will drop more.

[WickedWeasel]

The maths on the 64k segments is quite simple.

Based on what Telkom charges for line rental to a normal customer of R 1750 per 64k of unpopulated diginet, It costs telkom a fee of R 200 per 64k, You must remeber that there are some issues to bandwidth between two points.

1. There are routers, bridges, repeaters etc that have a ROI as well as a replacment fee etc.

2. Telkom use Cisco as there backbone, giving the rise to cost as well.

3. The copper need to be replaced based on theft, and degredation.

4. The ATM is not quite a simple as it seems, there are massive amounts of time, spent on mamnagment of the ATM network, remember it carries the SAT3 bandwidth as well.

5. there are interconnection fees, namley frame-relay to ATM etc. This is the in fightinh between SAIX and Telkom lol yes they do, diffrent cost centers etc.

[Roman4604]

2 Alkine

While I'm still battling to understand the value of your exercise, if its of interest to you and other forum members, I say go for it.

2 Others believing the R200/64K figure

I have no idea where this figure comes from ... 64K of bandwidth where?

DSLAM to ESR
ESR to S.A. international distribution router
Capacity on SAT3
US/UK international router to interconnect partner

Which one or all of the above?

[dyslexic]

Hi,

This is not relevant but does any one have a Matlab simulation of ADSL, I have to do a project on it and need some help asap.

Thanks,
Faz.

[Alkine]

What kind of simulation do you need? What aspect of ADSL do you want to simulate? (eg users, traffic, technology)

[dyslexic]

I basically have to simulate ADSL over Copper and Fiber using DMT to measure the tranmission quality, I have to show the Modulation of the carrier, First and Last channels of Upstream and Downstrem and a few adjacent channels in between and also define parameters like SNR, Bit Error rate, Loss, Interference etc.

Any ADSL or VDSL Model in Matlab would be helpful.

Thanks,
Faz.

[Alkine]

I'm sorry to say that I can't help you in that area, what I intend to do is very basic compared to what you are asking. Just for intrest sake whats your profession? are you currently studying and where?

[dyslexic]

In the Uk the contention ratio is usually 50:1 for home users and 20:1 for corporate customers as they pay more than a home user