ADSL/Broadband = CARTEL/SYNDICATE in South Africa?

ronnies

Member
Joined
Sep 27, 2009
Messages
26
:mad:Tyre companies (Firest___, etc) getting fried for price fixing and being part of a CARTEL since 1999?

Huh? Now tell me the difference between a CARTEL/SYNDICATE and the following?

(You will know if you want to leave a statement!)
If someone would be so kind, please make one of those polls to see if my statement vs. CARTEL, outlook is anything to go by?

My view:
Since ADSL started? Why so expensive ?
Price drop from TELKOM (monoply) Why so small ?
New undersea fibres "suppose" to give bandwith at much lower rate?
"Mw__" stood out and dared to "lower" prices {applause!} ;-) Sounds like CARTEL/SYNDICATE !!! Why didn't anyone dared to go LOWER? The alternative cable(s) are in and working ???????????

If you're not sure about the definition a CARTEL and SYNDICATE, allow me: (http://www.thefreedictionary.com/cartel) compliments and thank you

Def:

syn·di·cate (snd-kt)
n.
1. An association of people or firms authorized to undertake a duty or transact specific business.
2. An association of people or firms formed to engage in an enterprise or promote a common interest.
3. A loose affiliation of gangsters in control of organized criminal activities.
4. An agency that sells articles, features, or photographs for publication in a number of newspapers or periodicals simultaneously.
5. A company consisting of a number of separate newspapers; a newspaper chain.
6. The office, position, or jurisdiction of a syndic or body of syndics.
v. (-kt) syn·di·cat·ed, syn·di·cat·ing, syn·di·cates
v.tr.
1.
a. To organize into or manage as a syndicate.
b. To sell shares in.
2. To sell (a comic strip or column, for example) through a syndicate for simultaneous publication in newspapers or periodicals.
3. To sell (a television series, for example) directly to independent stations.
v.intr.
To join together in a syndicate.

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[French syndicat, from Old French, office of syndic, from Medieval Latin syndictus, from Late Latin syndicus, syndic; see syndic.]

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syndi·cation n.
syndi·cator n.
car·tel (kär-tl)
n.
1. A combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members.
2. An official agreement between governments at war, especially one concerning the exchange of prisoners.
3. A group of parties, factions, or nations united in a common cause; a bloc.

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[German Kartell, from French cartel, from Italian cartello, placard, from Medieval Latin cartellus, charter, diminutive of Latin charta, carta, paper made from papyrus; see card1.]

The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.


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cartel [kɑːˈtɛl]
n
1. (Economics) Also called trust a collusive international association of independent enterprises formed to monopolize production and distribution of a product or service, control prices, etc.
2. (Government, Politics & Diplomacy) Politics an alliance of parties or interests to further common aims
[from German Kartell, from French, from Italian cartello a written challenge, public notice, diminutive of carta card1]
Collins English Dictionary – Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003


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Cartel political or economic combination between parties or business organizations; hence, the parties themselves. See also combine, syndicate.
Dictionary of Collective Nouns and Group Terms. Copyright 2008 The Gale Group, Inc. All rights reserved.

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An association of independent businesses organized to control prices and production, eliminate competition, and reduce the cost of doing business.
Dictionary of Military and Associated Terms. US Department of Defense 2005.

Your views and inputs HIGHLY appreciated!
 

Sting

Ghost in the Machine
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Telecoms in SA is highly regulated by the Government and all operators are licence, which has certain conditions attached. These include the submission of any tariff increase on an annual basis.

So who is to blame?

The operators or the regulator?
 

ronnies

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ICASA = It's my opinion that they could be (or the management) be part of the CARTEL/SYNDICATE as they don't tend to get involved or take a firm stand regarding issues etc
 

Sting

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ICASA = It's my opinion that they could be (or the management) be part of the CARTEL/SYNDICATE as they don't tend to get involved or take a firm stand regarding issues etc

Why not ask the legal departments of the various operators if they agree with your opinion?

They are (were) just incompetent and not part of any perceived cartel.
 

ronnies

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Sep 27, 2009
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oh yes, to add, a reduction to ICASA must be submitted and this need to get "approved" ($$$$$$$$$ !) & takes a long time? Why, these people work for the goverment and bla -bla -bla this takes time. Not that there are so many rolepalyers or they submit changes daily ?? (or are they also on strike?) :)
 

ronnies

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Sep 27, 2009
Messages
26
Why not ask the legal departments of the various operators if they agree with your opinion?

They are (were) just incompetent and not part of any perceived cartel.

Just interested to get the feeling out there, I respect everyone's opinion thx R
 

Sting

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oh yes, to add, a reduction to ICASA must be submitted and this need to get "approved" ($$$$$$$$$ !) & takes a long time? Why, these people work for the goverment and bla -bla -bla this takes time. Not that there are so many rolepalyers or they submit changes daily ?? (or are they also on strike?) :)

They have to file annual tariff adjustments, iirc it is around June/July for implementation August. There is not really time for them to delay these filings.

ITO licence fees... from 1 April 2009, ICASA changed the base of calculation of licence fees from 0.1% of revenue from PSTS and VANS to 1.5% of gross profit - that's a lot of money!!!
 

ronnies

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I believe what you say. My problem is that the cost (taking it to the ground level) per mb is still way out of the normal. Could someone (with more info) give some breakdown from supplier to ISP & to the user, it seems that this is where my CARTEL idea originated from. The breakdown approaches could be very interesting?
 

Sting

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I seriously doubt if you will get those figures as it forms an integral part of the ISPs' business models.

Search this forum for posts by Andrew Alston - very insightful!
 

EffKay

Well-Known Member
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Sep 6, 2005
Messages
100
I vote Cartel

I think the terms Cartel and Syndicate are too simplistic in fact.

Syndicates are disparate groups of members that have simply agreed to not compete with each other (i.e. play nice with each other).
Cartels on the other hand do this but take it a step further where the members have agreed not only to not compete with each other BUT to actively work with each other via various forms of agreements in the of treaties, contracts and alliances.
For example OPEC is a cartel but the VW group is a syndicate...
The KEY difference is "Coverage" and "Freedom of Association"
Syndicates are understood to not always provide full coverage of the entire market and membership is not fully closed to outside members likewise members in the syndicate can leave freely leave if they feel they can do fine outside the group...
Cartels are like the Mafia. MASSIVE and total blanket coverage of EVERYTHING (and your little doggy too) as well as a "Closed Door Policy" which is massive barriers to entry and even bigger ones to exit the cartel. The walls are higher from the INSIDE.....

OK in SA there are several Syndicates e.g. Telkom & Government, that are all arranged into a CARTEL which has rules (eg. Telecomms Acts etc) and such in order to close the circle.

The only feasible ways to gain access are via syndication with one of the syndicates. (become a cog in the machine) or eliminate and replace that syndicate and be part of the Cartel ( like the GodFather, make them an offer they cannot refuse .. capese?)

Actually watch all the GodFather movies and it all be clear...
 

HavocXphere

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Messages
33,155
A cartel implies multiple parties colluding. We've got a gov sponsored monopoly. Clearly not a cartel.
 

milomak

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there's a good chance they are in collusion. but i have to say from what i have seen it would genuinely surprise me.
 

ambo

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Avoiding a price war does not automatically mean that there is collusion... ;)
 

Tharaxis

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Messages
560
In certain areas there is definitely some collusion taking place, but not so much in the Telkom/ISP space.

Provisioning of ADSL access is highly dependent on the wholesale prices set by 2 operators, namely SAIX and Neotel (Neotel only comes into the picture if you're self providing and decide to do something like use SEACOM bandwidth). ISP's obviously add a bit on top of that, but their intention is still to try and make ADSL as competitive as possible. Ultimately though ISP's can only reduce prices so far due to the wholesale picture and that's why you find a lot of ISP's (especially the smaller guys) with very similar prices. When Telkom/SAIX announces a price reduction we're often not talking 10's of rands per GB here (for those ISP's on the per-GB model), but more along the lines of a rand or two.

However, as for the collusion aspect, I know of two providers that in the past have (if not officially) placed stipulations on how you are allowed to price your product. If you place your price below the one they've specified you either a) risk having your service revoked or b) risk potential legal battles for breach of contract, keeping in mind that it's a while since I've dealt with these people, so the practices may have (and likely have) changed.

Firstly, there's IS, who was offering their business uncapped service for R1500 - the service is now defunct I believe, having being replaced with other options. Nevertheless, they offered it wholesale to providers, but there was a requirement from them (can't remember if it was contractual however) that the price NOT be set below the standard rate of R1500 as they were afraid that a price war would result in the product no longer being profitable and therefore needing to be discontinued. They would then charge the ISP the full price for the service, but then provide a refund to the ISP for the difference between the retail and wholesale price. I remember when I first heard about it price fixing immediately came to mind.

Secondly there's Vodacom, for 3G data services, whom refused to offer the service to providers if they chose to undercut Vodacom's pricing, additionally Vodacom's wholesale pricing is structured in such a way that it's *very* difficult to provide a competitive data offering. In fact I hear it's gotten worse now that Vodacom is offering consumer prices well below what the wholesale price is for resellers.
 
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