ADSL pricing "good for margins"

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Maskie

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From the latest iWeek -- http://www.iweek.co.za/
Author: Paul Vecchiatto
Issued: Thursday, November 17, 2005

ISPs can make a profit

TELKOM'S new ADSL pricing structure is good for business, says one Cape Town ISP.

Aubrey Davies, MD of I-softnet, says the change brings a lot more flexibility to ISP's to increase their margins, rather than having to fight out a price war as in the past.

"The two pricing methods allow clients to either pay for how much they use, or they can take out a contract for estimated use and top up if they need to," he says. Davies says his company prefers to offer clients the second option, as it is more quantifiable. The controversial new pricing structure came into effect on 1 November, changing from a per-user charge to per-gigabyte. It is at the centre of a High Court action by another ISP, DotCo, against Telkom.

I-Softnet has over 1 000 small businesses and large companies, such as GoodYear, as clients. Davis says he has received very little reaction from his customers on the new pricing structure.

He says the new system allows an ISP to make a margin on the unused portion of a contract.
Click to expand...

Problaby received no reaction since his customers does not know any better :D
 
Maskie (from original site quote) said:
He says the new system allows an ISP to make a margin on the unused portion of a contract.
Click to expand...
There we go. Explains the positive attitude towards the concept.
He's well aware of the ripoff that's going on, but doesnt give a **** coz he's raking in the cash Telkom Style! Screw the consumer!
 
Perhaps we should help and pick up the phone and speak to Goodyear about whats hot, and whats not, when it comes to what they pay for and get with telecoms.
 
Guess that we need to send GoodYear and the rest of his customers an Email.

He's clearly stating that he's ok with then getting ripped off.
 
Nobody would complain if the bandwidth itself were actually reasonably priced. What they're doing is reasonably fair from a business point of view. What Telkom is doing by setting the wholesale price at such a ridiculously high level is where the real problem is.

Juice
 
Juice said:
What they're doing is reasonably fair from a business point of view. What Telkom is doing by setting the wholesale price at such a ridiculously high level is where the real problem is.

Juice
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True. And the reseller must still add his markup. Some of them try to to be like telkom and ask R145 for 1Gig.
 
TheRoDent said:
/me strikes isoftnet off the list of people to NOT pee on.
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Must be a pretty short list these day.
 
Arent you guy being a bit rough on the ISPs, expecting them survive off 10-15% gross profit margins. The real problem here lies in the wholesale pricing.

Ask yourself does your cellular service provider, the dealer you bought your car from, your insurance company, the store you bought your jeans from etc. only get that kind of gp% off you ... hardly.
 
Roman4604 said:
Arent you guy being a bit rough on the ISPs, expecting them survive off 10-15% gross profit margins. The real problem here lies in the wholesale pricing.
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A very valid argument, and quite understandable, but one must also ask the question 'are the ISP's to soft on Telkom?'

As an end user we get screwed, this all starts with the wholsale prices to the isp's yet they just sit back and take it, knowing full well that the consumer just has to cough up.

DotCo took a stand and perhaps some of the other isp's should sit up and take notice of that.
One can not just expect the consumer to sit back and say that its ok cause they need to get their margins.

The isp's could make a lot more noise about the prices that they are being charged, instead of just wanting to pass that on to the consumers.
Isp's should be on the DoC's doorstep lobbying for much more cost effective bandwidth prices on a daily basis.
If they are doing this then I apologise, but for goodness sake start to get more vocal on the issue please.
 
I agree completely, but I also think ISP's in general are more in tune to their customers needs and grievances than many other service industries. This obviously does not include the likes of Telkom and Mweb, but the ISP's that have to compete against each other for custom.

To put pressure on Telkom to reduce prices is a major issue right now, and I think more is being done in this regard than, for instance, the car dealers pressurising the manufacturers and government to lower motor vehicle costs.

Profit margins are relative, but it is a fact that certain ISP's have had to take a knock in order to remain in business. Where profit margins are the bottom line, I am not surprised that certain companies have accepted the new pricing structure with open arms. Profit-centric is the main issue.
 
Sneeky said:
A very valid argument, and quite understandable, but one must also ask the question 'are the ISP's to soft on Telkom?'

As an end user we get screwed, this all starts with the wholsale prices to the isp's yet they just sit back and take it, knowing full well that the consumer just has to cough up.

DotCo took a stand and perhaps some of the other isp's should sit up and take notice of that.
One can not just expect the consumer to sit back and say that its ok cause they need to get their margins.

The isp's could make a lot more noise about the prices that they are being charged, instead of just wanting to pass that on to the consumers.
Isp's should be on the DoC's doorstep lobbying for much more cost effective bandwidth prices on a daily basis.
If they are doing this then I apologise, but for goodness sake start to get more vocal on the issue please.
Click to expand...


Absolutely correct. Whilst one cannot blame the ISP's for the high prices (aside from the few who are ripping clients a new @sshole - M-Web etc), one can ask why they are not doing more to force the issue with the incumbent wholesaler. We, the consumer, need them to assist us in making it more affordable for everyone, not to sit back and wait for us to do the dirty work and then jump on the bad wagon at the end of the day and bleat about how THEY are dropping their prices.

There are a few who are vocal about the higher prices, but certainly not enough.

We as consumers have now had enough and it is our right to single out those ISP's who are NOT doing their bit to assist us in our endeavours to bring down the exorbitant prices.

We should make note of all those companies and call/mail their CEO and everyone else in the company for that matter, to make it known that we are not happy withe their stance and that we will be taking some form of consumer action against them.

If we have them on our side and not sitting in the sidelines or siding with the enemy, our chances of success will grow exponentially.
 
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