ADSL pricing

[sallyspencer]

Excuses,excuses and many more damn excuses......wait for this and wait for that......in the mean time we are still paying through our ''noses'' for ***.....

Only one ISP has tried to lower their prices......it is embarrassing and disgusting.....

 

[SaiyanZ]

Ignoring the startup costs and using the pricing from the article:
50% drop
Line rental 1572 36% 1572
ADSL line 1824 42% 1824
1gb 948 22% 474
Total 4344 3870 10.91%


Line rental 1572 12% 1572
ADSL line 1824 14% 1824
10gb 9480 74% 4740
Total 12876 8136 36.81%


So on a 1GB package a 50% drop in data pricing results in a 10.91% drop in the total price. On a 10GB package a 50% drop in data prices results in a 36.81% drop in the total price which is quite significant.

 

[kedul]

Without analyzing anything very deeply, it is "strange" to me that before the cost of International bandwidth started to come down, that high cost was often used as the main excuse for high internet costs.

 

[CorneN]

Meh articles like these makes me want to cancel my ADSl subscription for good. Especially since I was getting 50kb/s all weekend on a supposed 4mb acount. ****it, lets all go on a broadband strike!

 

[OverKill69]

As I write this... there is a banner from OpenWeb at the top of the page that advertises:

"4096k UNCAPPED with no rate limits R2899 pm"

R2899 per month is a K@K load more than line rental...

You've bought the modem already... you've got the DSL line and have been paying for it and the compulsory voice service regardless of the international bandwidth pricing... NOW it's time to select a ISP package...

THAT is where the price of international bandwidth comes in!

You can't say that "the price of petrol has little effect on what motorists pay"... then build the price of a vehicle into the cost model...
It's STUPID!

This particular "Staff Writer" needs to go back to school.

If one would like to bring the argument of "broadband penetration" into the fore... then sure, startup costs have ALL TO DO with that argument, but then bandwidth cost has more of a "sustainability" question mark.

 

[LazyLion]

LLU unbundling will give other operators access to Telkom’s copper infrastructure and will create a competitive environment in the ADSL access space. This process is currently in ICASA’s hands, and is set to be completed by November 2011. The Department of Communications has also prioritized the ‘acceleration of local loop unbundling’ process which it wants to be completed by March 2011.

.... and therein lies the problem. Anything in ICASA's hands is bound to be screwed up beyond all recognition! They have yet to make one positive contribution to the Telecomms industry (other than providing employment for five retarded baboons).

The department of communications is just as bad. "Prioritized" to them means it is just another thing they can use to line their wallets with. I dunno what orangutans in suits need money for... but there it is.

 

[freeek]

So in essence the article states that we have to wait another two years for prices to start dropping. By then, I'm sure they would've thought of yet another excuse to keep prices up. The long and short of it is this: while companies can make ridiculous profits, they will continue to do so as it is the point of a company.
Africa is a cut-throat and selfish continent where personal enrichment is the priority, not, as it should be, the uplifting of society in general and while this situation remains, true, affordable broadband, will stay a dream.

It has nothing to do with Africa, it is simply the model. Capitalism you have to love it! Maximize profit, screw everything else! Gogogo free world forcing this crappy model on the rest of the world. A new world order is on its way and we are just standing around doing nothing about it and actually wishing it on more nations.

 

[DeSLAM]

@rpm ...

"Total Yealy Cost"

should be

"Total Yearly Cost"

DSL 384 Total Yearly Cost should actually read


"DSL 384 Total Yearly Cost - 1st Year" As your installation cost and cost of a modem is not payable every year...but ONLY in the first year.

 

[bekdik]

As long as the government and their co-travellers have huge vested interests in telecoms, nothing is going to change. Just think of it as another implicit method of taxation.

 

[Rouxenator]

And yet people still think copper is the way to go....

The best investment I have made so far in terms of internet was installing wireless CPE at the once off cost of R2000.

 

[Nod]

I just want to get some clarity. Is it the bandwidth (cap) used that are the problem, or the speed of the line? If it is the bandwidth used, then surely they can increase the speed of the lines? If, on the other hand, it is the speed that is problem, then surely they can increase the allowed cap?

It just seams that people are using the word "bandwidth" for everything, including speed and cap.

 

[Nuro]

I agree with some of the comments on this thread.
Companies that do not depend on the local loop still have high prices, e.g. iBurst, Neotel, Voda, MTN etc.

I understand that running a wireless system requires heavy investment, and that the backhaul is still (most likely) provided by Telkom. But surely there must be some cost benefit?

 

[Dosti]

cheap services --when

LLU, hmmm, someone is gonna foot the bill to upgrade that network, don't expect prices to drop in 4 years. One Telkom owned copper network better than a few controlled hacked copper network, add some more maintenance costs and third party network management software/hardware/contractors costs.

Fibre to residence, wireless networks all come at a price. We are gonna pay irrespective of all the stress causing comments on here.

 

[porchrat]

Nothing is going to change. Same old same old. Very devious and clever thought has been invested in the current system and charges. They will remain high and continue to do so... because the end-user allows it to be so.

It is just the way it works. The service is used and paid for by the end-user with much wailing and moaning... but it is still paid for.
Nothing changes... so why should it?

3G costs still absurdly high, much wailing, but people still use it... and it is still paid for.

As long as it is used and paid for, there is no motivation for the powers that be to reduce end-user costs.

Sun rises, sun sets, same old same old.

I don't really understand the logic there. It isn't that the consumer allows it. I think it is more a case of many consumers actually don't have a choice.

That is like telling "the consumer" that the price of food is too high so he must stop eating. It isn't the consumer's fault for not acting if their is no course of action.

If a viable alternative to Telkom ADSL were provided at a decent price I would move yesterday, but currently I have no choice but to pay.

If you require a true mobile data solution what else are you going to use other than the cell networks?

If you require fast reliable fixed line solutions what else are you going to use other than Telkom?

 

[Tharaxis]

I definitely agree broadband in South Africa is very expensive, and what MyBB has rightfully pointed out is that ISP's themselves only make money from a small % of the total broadband pie, with providers such as Telkom raking in the large majority.

Remember, of that 15% for that 1GB, roughly 60-70% of that goes to the upstream provider such as Telkom, meaning the ISP themselves maybe only get 6-7% of the overall amount of money you pay to go towards supporting their products and providing users with services.

That said:

That economical bs they sprout can be blown out the water by referring to next gen console prices early in their lifecycle(they usually sell at a loss at first to increase user base before raking in astronomical profits later on).

What you're neglecting to take into account with this analogy is that console manufacturers such as Sony and Microsoft don't work in a vacuum, they offset the losses made on the hardware with licensing fees paid by developers to be able to create games for those platforms.

The console model has always been "get boxes into as many homes as possible, even if it means doing so at a loss, so that we can make our money on software sales and licensing fees". Recouping the cost on manufacturing cheaper hardware and therefore no longer running at a hardware loss is only done very late in the console life cycle, and there are indications that this model is no longer working for console manufacturers, with both Sony and MS struggling to recoup their manufacturing costs based on software sales alone. Only Nintendo isn't struggling, and that's because they don't sell their hardware at a loss, each console sold does so profitably.

If we were to therefore apply what you're referring to the broadband market, this would mean "get routers and ADSL lines into as many homes as possible, even if it means doing so at a loss, so that we can make our money on usage.", and lo and behold, that's practically the model we have already, with many providers selling ADSL lines at a loss to themselves, in the hope that the usage of their users will help recoup that cost and pay to provide that service, and just like in the console cycle, many providers are realising that they're not recouping those costs as fast as they should be, and that the model as it stands is probably not sustaintable.

Until providers such as Telkom and the like (who actually own the infrastructure itself) come to the party, costs will remain high and ISP's will remain stuck between a rock and a hard place.

 

[Lightscribe]

The Department of Communications has also prioritized the ‘acceleration of local loop unbundling’ process which it wants to be completed by March 2011.

I see this as positive.

 

[porchrat]

I see this as positive.

The government has been prioritising housing development and crime prevention for 15 years and look how well that is going. I see nothing as positive until it actually happens.

 

[OverKill69]

The government has been prioritising housing development and crime prevention for 15 years and look how well that is going. I see nothing as positive until it actually happens.

I see this as negative.

 

[jannievanzyl]

I agree with some of the comments on this thread.
Companies that do not depend on the local loop still have high prices, e.g. iBurst, Neotel, Voda, MTN etc.

I understand that running a wireless system requires heavy investment, and that the backhaul is still (most likely) provided by Telkom. But surely there must be some cost benefit?

Nuro, not wanting too start a flame war (he says naivly...) but....

According to this article the total cost of ownership of a 384 DSL is:

- Over a year: R6266

To better smooth the once-of costs, rather work over two years.

- Over two years: R10610
- Over 2 years (taking the current 29/MB 'special'): R9410 (and we know this is a limited offer, below cost price of R29/GB)

A 1GB package from iBurst at 1Mb/s is R5256 over two years.

This is less than half (just over 50%) of the Telkom pricing and even 44% less than the best deal you can get currently on ADSL (R29/GB)

So at a 1GB contract level, iBurst is about half the price of a much slower ADSL offer.

I do realise that the one problem (with most of the wireless solutions) is the OOB and top-up pricing (watch this space ), but for a "normal contract" user, iBurst offers a very serious value proposition measured against ADSL, let alone the other mobile wireless networks.

 

[porchrat]

Nuro, not wanting too start a flame war (he says naivly...) but....

According to this article the total cost of ownership of a 384 DSL is:

- Over a year: R6266

To better smooth the once-of costs, rather work over two years.

- Over two years: R10610
- Over 2 years (taking the current 29/MB 'special'): R9410 (and we know this is a limited offer, below cost price of R29/GB)

A 1GB package from iBurst at 1Mb/s is R5256 over two years.

This is less than half (just over 50%) of the Telkom pricing and even 44% less than the best deal you can get currently on ADSL (R29/GB)

So at a 1GB contract level, iBurst is about half the price of a much slower ADSL offer.

I do realise that the one problem (with most of the wireless solutions) is the OOB and top-up pricing (watch this space ), but for a "normal contract" user, iBurst offers a very serious value proposition measured against ADSL, let alone the other mobile wireless networks.

IMO when you only have 1GB speed doesn't really matter. Though I imagine the value proposition still exists at higher GB packages.

How did you arrive at those numbers? Would actually be interesting to see a breakdown comparison on setup costs etc. What about out of contract or does iBurst not have month-to-month options?

Anyone have a link to a thread that discusses this surely it has been discussed before?