Help: Telkom refuses connection with Neotel lines

This is a real problem, I recently took over IT in our company and inherited the following setup. We make use of Telkom VPN supreme to connect our branches together. We also host a webserver in the Telkom Cybernest. This server is connected to the VPN network with a 4Mb connection and is more than sufficient for our requirements. Whenever the offices need to access the server it will run over said VPN connection.

The problem that we have is that the connection between the server in the Telkom datacentre is connected with only a 256Kb diginet line to the internet. This speed is insufficient for users accessing the webserver from the internet. Some of the users use 20Mb and up diginet lines for their internet. It is obviously that the 256Kb is insufficient to service our clientele and the link need to be upgraded. We are currently paying R3800 / month for this diginet line.

Telkom quoted us for upgrading said link to a 4Mb link, (3Mb local connection and a 1Mb international connection). For obvious reasons, I’ve asked Neotel to also provide me quotes and they were able to provide me much better costing than Telkom. When this was mentioned to Telkom they mentioned that legally we are unable to get out of the R3700/m 256Kb link for the remainder of the contract (still 31 months left on a 3 year contract). Despite honouring the R3700 / month for the diginet line, Neotel still works out cheaper for us. My idea is to use the 256Kb for a failover.
When the decision was told to Telkom that we will still prefer to opt for Neotel, they unfortunately changed their argument and is now stating that it is their policy not to allow any third parties to terminate in Cybernest. They are unable to provide any good reason for why they refuse Neotel to provide me the connection between the data centre and the Internet barring the fact that it is their policy.
I obviously have some serious questions around anti-competitive behaviour and all those things. Unfortunately the company I work with is too small to consider taking any legal actions to force the matter. It is also not an option for us to cancel our current contracts (all of them signed 5 months ago for 3 years). Telkom refuses to match the pricing that Neotel offered us, and we are losing clients and money (not to mention reputation) with the fact that our clients need to share a 256Kb link.
In the meantime, all correspondence has been forwarded to Neotel, but whether or not they will be prepare to take on Telkom on this remains to be seen. I am also continue to see if Telkom can not budge on the quotes but given that it is their policy not to allow competition access, they have no business motivation to reduce their pricing.
I am looking for any options that a small company like us have. This is obviously urgent as I am running out of time before I will be forced to accept signing another long term contract with Telkom at ridiculous pricing.

(Ps, serious responses only please, I know we are screwed but this is the cards I was dealt and have to play with them.)

Regards
Skouperd

OK, cant you host the webserver somewhere else where the outside world can access it at a higher speeds while still being able to access it via the VPN at good speeds?

supersunbird said:

OK, cant you host the webserver somewhere else where the outside world can access it at a higher speeds while still being able to access it via the VPN at good speeds?

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Not if they're stuck in a contract.

phaktza said:

Not if they're stuck in a contract.

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I get that, but would the domain/content being hosted on said server be specified in such a contract?

Keep that Cybernest server either dormant/unused or as a failover webserver with the same content and host the content somewhere else?

supersunbird said:

I get that, but would the domain/content being hosted on said server be specified in such a contract?

Keep that Cybernest server either dormant/unused or as a failover webserver with the same content and host the content somewhere else?

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Well no. But they'd be paying for a hosting solution they're not longer using. The question is whether it is economically feasible to do what you propose and have two sites.

supersunbird said:

I get that, but would the domain/content being hosted on said server be specified in such a contract?

Keep that Cybernest server either dormant/unused or as a failover webserver with the same content and host the content somewhere else?

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Well no. But they'd be paying for a hosting solution they're not longer using. The question is whether it is economically feasible to do what you propose and have two sites.

phaktza said:

Well no. But they'd be paying for a hosting solution they're not longer using. The question is whether it is economically feasible to do what you propose and have two sites.

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Despite honouring the R3700 / month for the diginet line, Neotel still works out cheaper for us. My idea is to use the 256Kb for a failover.

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Telkom refuses to match the pricing that Neotel offered us, and we are losing clients and money (not to mention reputation) with the fact that our clients need to share a 256Kb link.

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They are willing to do that for the diginet line, I'm sure a business argument for it could be made.

Thanks for the suggestion of moving the server to another hosting company, truth be told I have considered it but the cost of hosting the server at telkom is amounting to something like R30k / month currently with Telkom and the fact is we are still a relatively small company and just "wasting" R30k per month is not really an option. I would much rather spend that money on salaries or something that can actually make a difference to the staff's life and not paying it over to Telkom just because my predecessor signed something he should not have. But yes, I have been thinking about it, the difference is R3700 is still an acceptable amount of money to be pay monthly which we will be prepare to write off as "educational-fees" but R30k, now we are talking a little bit more than what we are happy to do.

BTW, Telkom is happy to have "backup" lines installed into the data center, I suppose an option is then to have a "backup" server (single core atom processor is a server not so?) hosted at a Neotel data center which just redirects all traffic to the real server at Telkom... but the problem is that is another server, another hosting, another license and everything else that goes with it so costing might be a bit prohibitive (plus now you need two lines, one from Telkom data center and one going from the Neotel data center to the internet). Moving the server is just not an option right now.

By the way, the VPN is also totally unnecessary (R8,500/m) in that the offices don't actually need to sit on a VPN at all. It is not like we are sharing files or anything between the offices, the sole reason for the VPN was to use Skype (no comments please!). I suppose that is what happens when you have a trusting IT guy and a good Telkom sales person. The VPN is also a 3 year contract of which we are now 5 months into it... now if Telkom has any sense of decency in them, I would be comfortable to cancel said VPN contract and pay for proper lines out of the data center to the internet and call it quits. But somehow, I don't see how they will be agreeing to that. I've already been told by senior sales guys at Telkom that "sorry, that's the contract, if I want to cancel the cancellation fee = monthly fee times remaining contract (i.e. R8500 x 31 = funny-money.) despite them acknowledging the fact that the solution is not something that we need.

I suppose my real question is do you guys believe that it is actually us that is in the wrong? Personally, I would not have signed the contract and I don't expect any other reasonable IT person to enter into that contract either, but for some reason or another we did and Telkom was all the more happy to sell it to us. Surely there must be a responsibility from their side too to ensure that what they sell is in the client's best interest? I've gone back to the sales proposals and everything, and only the very last version have a one liner, like foot note almost, saying "oh, and by the way the breakout to the internet is 256Kb". In my mind, if I host at a data center, the breakout to the internet is of such a nature that it is immaterial. I was definitely not expecting 256Kb, when I heard it, I nearly fell of my chair.

Finally, in my mind the fact that Telkom is unprepared to allow competitors to terminate a link in the data center, bearing in mind that Telkom is not prepare to offer us the service at the same price, must surely be seen as anti-competitive behavior? Unfortunately, as mentioned, we are just not big enough to have the financial muscle to take them on from a legal point of view.

Suggestions / views / solutions will really be appreciated. In the meantime, thanks for the suggestions thus far and thanks for reading, appreciate it.

A couple of suggestions. No idea if they will work for your situation but I hope are constructive:

1. I see a few guys mentioning Cloudflare on these forums
2. Possibly deploy one or more caching reverse proxy servers with fast connection(s) in front of your existing server thus reducing traffic on the 256k. I think Nginx can be deployed in this type of configuration.

Wait let me get this straight you currently have a bunch of Telkom products and services and are spending more than 30k a month with them on a contract with more than 30 months to go - so the total value of the contract is at least 900k and probably worth more than a mil.

AND for internal communications purposes this product is perfectly suited because it is 4Mbs VPN
However you clients don't use the VPN network and are being pushed through a plithy 256k connection

BUT to increase the commodity internet capacity beyond 256k is going to cost an arm and a leg and Telkom refuses to support another provider terminating into their centre (I don't imagine that is entirely the case, I imagine they'd gladly let Neotel connect in via IPConnect or a similar offering but then Neotel's price would be a ton higher)

If I've got it all straight a few options exist one of which has been suggested which is to host elsewhere. Surely your business benefits by having a public website and internal webhosting - a 256k connection to another server which is the public website which can be hosted abroad or with another ISP is sufficient and in the event of failover being needed you have a slow but steady connection for your clients?

Also your VPN surely can have more branches added at a nominal price - can't you have a VPN connection plogged to a datacenter - yes we want to have computers at Neotel's datacentre on our VPN and its none of your business, the contract provides for additional VPN points at x Price ...- ?

I agree with Paul's comments.
Take a look at the hosting fees at www.hetzner.de and many other hosting providers. You can use one of these providers as a primary host and Telkom as a backup.
BTW, in 3 years time consider hosting at a carrier neutral data centre, or a hosting provider who does not expect you to sign a long term contract.

I had a quick read, ask Telkom to do a one day SDSL trial. Compare the performance and pricing. I don't know you environment, this includes more than your network IT infrastructure so I cannot provide solid advice.

Paul, hosting the server is costing us R30k/m, the 256Kb line = R3700, and the VPN setup = R8500 / month. The VPN network is an option and one that I have been seriously considered especially if I can terminate the VPN at the client's locations which need to access the website. This is not something that we have ruled out as yet, the challenge is that one of the clients have at least 3 sites which need to be connected on the VPN. (Just our two branches already costs us R8500) so I am scared to ask how much installing Telkom VPN will be for client branches (Telkom VPN supreme).

Moving servers to another data center is something I have definitely considered but given the fact that we are still a small company, with already a big chunk of our budget going to telecommunication (and we can not cancel existing contract) it makes it really difficult to justify getting another hosting company in. (another hosting solution with the required links will be more expensive than just excepting telkom's dominance and position and agree to their ridiculous pricing. The key thing is we are trying to resolve this as cheaply (yet efficiently obviously) as is possible.

First price is to cancel all Telkom contracts (without having to pay a R1m, in penalties) and move everything to a different data center. Second price is for Telkom to allow Neotel to provide the bandwidth between the Telkom datacenter and the internet. (R8500). Last option is for us to accept Telkom's quotes. I can not see Option 1 to work out. Option 2 is still my best bet Telkom is now citing "legislation" preventing competitors in the data center, so we may still get somewhere on Option 2. (I don't know what legislation and Telkom is still not answering me). Unfortunately, we are stuck in a contract with them, and we don't have the cash to move host (with bandwidth etc) in a different data center now. (as frustrating as it may be).

I did not mention it before but we are holding financial information on the servers so ideally we'd like to keep it in South Africa.

Thanks for all the suggestions thusfar, I'll ask them for SDSL trial on Monday.

but do you want your clients to have access to the financial information?

Part of my operating assumptions is that Telkom managed to get the management guys keen on the basis of "mission critical" and VPN security and what not. In this event the case to create a firewall between your public webserver and your internal financial data containing servers really does exist. Telkom does have really good value propositions on some "carrier grade" fronts but proving consumer products at decent prices is their weakness.

You could always use that VPN connection and some routing magic to create a tunneling connection to the webserver through a hosted VPS? We used to run something similar on one of my old work sites for RDS to some companies behind very restrictive firewalls

Paul you are 100% correct that Telkom sold the solution on "mission critical" and the VPN security side of things with redundant redundant redundant failovers and platinum service levels for faults and I don't know what other bells and whistles. That for me however is really pointless if the clients can not access the server (from the internet). We can install some VPN "brancheS" at the client sites but the problem with that is that the clients can move around (3G, Laptop) and not always access it from the same location. The webserver itself access the financial database and what not, so ideally we should not split the two up.

I actually like the idea of PsyWulf, and that is something I did not consider. Pulling that off will require some really interesting routing but don't think it is impossible.

skouperd said:

I actually like the idea of PsyWulf, and that is something I did not consider. Pulling that off will require some really interesting routing but don't think it is impossible.

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Like I said,it's been done. Dropped a VPS right in their DC,as a "Lan" endpoint and VPNed in to it

You'd likely have to transfer the DNS records to a second provider to make it authenticative,then set up the domain(s) to route to the VPS,the VPS would be a proxy/tunnel configured to only accept destinations on the VPN to prevent abusive connections,and a local record to forward traffic to the proxy to the Telkom endpoint on the VPN

You could play around with it with a VPS with windows an an app like Freeproxy,before deploying a full solution. Ideally *nix based if you're expecting as much traffic as you say