Cheaper bandwith - fact or fiction?

Whats wrong South Africa

What is going on in South Africa? No wonder we loose to Australia ALL the time on well....... ALL fronts!! Ok sorry I forgot theyre 1st world country.... Can the powers that be in South Africa not be advised properly and take informed desisions? If the writer can analise the situation what the heck is wrong with the advisors? What is wrong in this country?:confused::mad:
 
yeah why is RPM all of a sudden controversial? He's realistic and practical rather than controversial. Telkom, ICASA, DoC, Ivy is controversial...not RPM.
 
Currently the network that will form Infraco is bigger than the SAIX backbone. Looking ahead it would be logical that they will build and provide support for SLA, even if the current capacity isn't there.
 
You can understand why programs such as (ex) Napster, YouTube and a host of other high bandwidth demanding applications will never be developed in this country despite our ability to do it. People would be bankrupted just during testing with our bandwidth costs and limitations.
 
ProDataPro said:
hi Redheadfan,

What leads you to believe that?
Click to expand...


http://mybroadband.co.za/nephp/?m=show&id=6250
myadsl said:
Neotel has a four year exclusivity agreement with InfraCo, but according to Engineering News “it is likely that within that four-year window, Infraco will seek a license, which could see its capacity, which is said to be more extensive than that offered by Telkom, open to all comers.”
Click to expand...

Also heard the same from two industry insiders.
Remember the network is newer than that of SAIX.

Remember under the old telecoms act no-one except Telkom was allowed to lay communication cables. Eskom and Transnet managed to lay their own for internal communication only. And this is why infraco is now being formed using it, because these networks have such a high capacity which is being underutilised by Transnet and Eskom.
 
They should really get rid of the old people that makes crappy decisions of "broadband" cause they have no idea about the technology.

Not that SA has broadband anyway.
 
redheadfan said:
http://mybroadband.co.za/nephp/?m=show&id=6250

The Department of Public Enterprises (DPE) said that it is confident that InfraCo’s long distance network has enough capacity to provide high-speed national connectivity for at least the next 20 years.
Click to expand...

National coverage doesn't indicate the number of users. I think they looking at 400 people "nationally" :rolleyes:

redheadfan said:
Neotel has a four year exclusivity agreement with InfraCo, but according to Engineering News “it is likely that within that four-year window, Infraco will seek a license, which could see its capacity, which is said to be more extensive than that offered by Telkom, open to all comers.”
Click to expand...

four-year window and could see its capacity being the operative words here.

Talk is cheap!
 
Talk may be cheap, but economics does speak.

We have entrenched Telkom providing the majority of SAs local bandwidth. We have new Neotel who will be selling Infraco's bandwidth.

Neotel has no market share. They need to offer something in return to get customers. The price is artificially high therefore they cut prices. It doesn't have to be big, just say 5%.

Telkom might have a lot of business now but they are a listed company. If they take even a slight downturn their share price will plummet. The share price philosophy is what drives Telkom. If Neotel is even 5% cheaper Telkom will receive NO new business. It is very important to Telkom especially with the cellphone competition that they show their shareholders that the are still attracting customers. Therefore they will drop their price to equal or undercut Neotel.

Neotel in turn drop theirs and this goes back and forth until the artificial high price component is factored out. Admitly this could take a few years as Neotel is going to battle to keep up with demand for new lines.

Then having Infraco online means that the broadband supply has doubled. Although total usage will probably increase accordingly the price per Gigabyte will fall. I.e. bandwidth will be cheaper but you'll be using more.

Now you do have situations where two or more market players conspire with each other to keep prices artificially high. This won't apply between Neotel and Telkom because Neotel has no market share (zero x R1million = zero). If Telkom had been split in 2 to create the NSO then such a duopoly situation may have arisen.

Neotel plays down the price war because Telkom will drop their prices accordingly and in fact are in a better position than Neotel to offer lower prices. Neotel knows this and taking the price war into account, they know they need to offer something in addition to price. Neotel will build itself a reputation of quality. But make no mistake the price war has to happen.

The biggest area of effect in the short term will be bulk discounts. Neotel can't install or change over millions of lines in a month but on the wholesale side this is easy. Telkom have locked many of their wholesale clients into longterm contracts. But as more and more of these expire Telkom will have to compete more to keep the business. Therefore ISPs and VANS will benefit and pass this onto the public.
 
I like

redheadfan said:
...
The biggest area of effect in the short term will be bulk discounts. Neotel can't install or change over millions of lines in a month but on the wholesale side this is easy. Telkom have locked many of their wholesale clients into longterm contracts. But as more and more of these expire Telkom will have to compete more to keep the business. Therefore ISPs and VANS will benefit and pass this onto the public.
Click to expand...
/me likes what redheadfan is saying, even if it is just speculation at this point :)
 
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