Axxess pushing the ADSL ISP price limit downwards

Decent. Well done Axxess.
 
And what about the ISP's who don't have a wholesale margin given to them from SAIX?

I know SAIX give +- 15% on the wholesale price, so in essence axxess is practically giving this away at no margin. does not make business sense to me unless they are hoping to catch us on other charges like hosting and mail etc....

I don't see how this is a positive thing because it's NOT as if SaIX will @#$!@# themselves and start dropping prices, at the end of the day this kind of marketing does more damage to the ISP's who are already strugling on the 2-8% they make.

Sorry Axxess, you're putting pressure on the wrong end of the market!
 
gnu_genx said:
I know SAIX give +- 15% on the wholesale price, so in essence axxess is practically giving this away at no margin. does not make business sense to me unless they are hoping to catch us on other charges like hosting and mail etc....
Click to expand...
They're willing to accept a lower margin with the hope that they get more clients. Its how the rest of the world manages to remain competitive and profitable.
 
Competition

bwana v.18 said:
They're willing to accept a lower margin with the hope that they get more clients. Its how the rest of the world manages to remain competitive and profitable.
Click to expand...

I agree... if axxess can do it - so can the other ISP's. They just need to sit down and figure out how axxess did it and then do it. Also, the more ISP costs come down, the more the emphasis will fall on the question: "But if the ISP cost is so low, why the hell is the rental cost so high?" which in turn put backward pressure on the other side of the market. Well done Axxess!!!!
 
This is great news and I'm sure they will get a great deal of signups. But my question is, have they planned ahead when it comes to their sales and support staff. As most of us remember, their customer support of late has not been up to scratch. This is something I take into consideration when signing up with a company. Lets hope they are back at the top of their game.
 
hmmm... 5GB and 10GB traffic is what I'm interested in
and so far they've dropped their 5GB prices to match SAOL.com which has been running at R299/mo for months now. Web Africa is slightly cheaper at the moment for both offerings. I'm moving from SAOL.com to WebAfrica next month since they're cheaper. GTS (Goal solutions was suppose to have launched Aug, Sept and now Oct 1st but nothing has come of it).

Let me do a comparison on the 5GB and 10GB accounts real quick (can only afford shaped so here goes):

5GB accounts
Axxess - R299/mo
SAOL.com - R299/mo
WebAfrica - R290/mo * cheapest

10GB accounts
Axxess - R599/mo
SAOL.com - R499/mo
WebAfrica - R490/mo * cheapest

Still a good thing to see the other ISPs dropping their prices though. :-)
* Might be informative doing a new poll for which ISPs users subscribe to *
 
bwana v.18 said:
They're willing to accept a lower margin with the hope that they get more clients. Its how the rest of the world manages to remain competitive and profitable.
Click to expand...

Absolutely, i have to concur with you. However, when you only have one supplier of that commodity, who in our case will not increase the wholesale margin, you're in essence going to be putting downward pressure on the wrong segment surely? The very segement which is vital to forming any tpe of resistence against the incumbents.The end result is that smaller ISP's/retailers ca'nt compete and so leave the market, which in our telecoms environment can't be a healthy sign at all. ADSL growth is rated 3rd in the world, i bet niche isp's are telling a different story when it comes to profits, so why eat into them even further?

If it were Neotel and Telkom putting pressure on eachother, different story. But as it was publicly stated, neither telkom nor neotel will enter into a price war...and for good reason.
 
gnu_genx said:
Sorry Axxess, you're putting pressure on the wrong end of the market!
Click to expand...

The Cell phone industry has the same exploitative attitude like yours that makes all of us pay so much for our cell phone calls. You attitude is, "let's all gang up together and rip off the customer together. Then we all get stinking rich at their expense."

My comment to you is: If you cant compete with Axxess then shut your business doors. We customers are tired of your attitude to ripping us off.

Well done Axxess to bringing about competition.
 
bwana, this is just a comparison to Axxess shaped 3gig accounts, as the article suggests that they are the cheapest.
 
Ok now you guys who have commented above: How many of you run a business in the field, how many of you are acctually running an ISP business? How many of you have done research in regards to profit and how much you need to survive in the long run?

It's not about ganging together to rip off the customers together. SAIX and IS are charging the ISPs too much for the bandwidth and that is the real problem. If an ISP sets it's margins so low that it can't survive in the long run is kind of pointless don't you think?

It's always good to see price reductions but I agree it's coming from the wrong place. Fine axxess might be able to do it because they have grown enought to do so, but I doubt that a new ISP will be able to without having a very LARGE initial investment and larger risks.

Rememer these ISP have to pay support staff and have a lot more costs that you might not know about and not think of. So if they charge to little the business won't profit enough to survive and will just die. Exactly the same thing is happening in the hosting business and it's not healthy for business at all.
 
Telkomhater said:
The Cell phone industry has the same exploitative attitude like yours that makes all of us pay so much for our cell phone calls. You attitude is, "let's all gang up together and rip off the customer together. Then we all get stinking rich at their expense."

My comment to you is: If you cant compete with Axxess then shut your business doors. We customers are tired of your attitude to ripping us off.

Well done Axxess to bringing about competition.
Click to expand...

Steady on cowboy, you've missed the point...the problem in this case is not the ISP's, and bringing the GSM's into the equation does not strengthen your point and is futile to this argument.

let me make it even simpler for you...

If, like you say, I close doors cos i can't compete...and so does every ISP for that matter, in the end you're only going to have Telkom and axxess in the market. Do you see a sustainable industry??

The wholesale margin gives 15%, so eating into that is an easy way to get market share from other ISP's, but it does not detract from the biggest issue at all and that is the fact that Telkom rules the market place. 5 years ago there were no niche isp's...now 5 years later there are hundreds...and now you're saying those businesses should just close their doors. Nice!

You can't eat into your operating profit forever and expect to remain competitive, you will end up with crap support, no cash flow and very little profit to show for your efforts...on a larger scale your thinking would sink the entire industry and leave us with only one player!

There is already too much competition, so don't thank axxess for more competetion. How much more competition do you want in that 15% of R200??
 
Telkomhater said:
The Cell phone industry has the same exploitative attitude like yours that makes all of us pay so much for our cell phone calls. You attitude is, "let's all gang up together and rip off the customer together. Then we all get stinking rich at their expense."

My comment to you is: If you cant compete with Axxess then shut your business doors. We customers are tired of your attitude to ripping us off.

Well done Axxess to bringing about competition.
Click to expand...

You are not looking at the big picture. The ISPs have little control over pricing
 
Well, their website sucks bad, just the same as cybersmarts. Think I'll be going with webafrica @ R70 for that extra 1GB account I need. They give the info like number of concurrent connections allowed, I dont need to "phone" to find out...
 
I was with Axxess for a while and I can say their services isn't all that bad (average), so coupled with decent pricing = good for them.

But I have to concur with gnu_genx. This is the wrong end of the market for pressure to start developing. In the long run it won’t help us as consumers, because 15% mark up is not much for the ISP’s to play with, and all that will end up happening is a bunch of ISP’s slitting each others throats while Telkom continues on its merry way!
If pricing decreases on the ISP mark ups, it will take pressure off of Telkom on the wholesale side of things, and how happy as a consumer willl you be by scoring a measly 15%
 
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