bandwidth pricing

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zeely

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I had a chat with a friend of mine who works @ MTNNS...

this is all off the record, so please dont put it to any formal use.

but interesting nonetheless


"Yeah, when I say prices have started to come down, that means that they have on our side, we just haven't passed them on to the consumer... same for all the ISP's...

seacom will theoretically enable higher speeds, but the ISP's will throttle the pipe, and charge a premium for higher throughput... at least at first. gradually there will be parity, but we will try to hold on to margins for as long as possible. I personally think it is wrong, but that's a reality of south african business...

MTN also has 7.2 access rates, but the reality of backhauling the data from breakout is also a real consideration given the vastness of the country. The benefit to you is that MTN has local and international breakpout in CT, although the majority of SA based sites are in JHB, so you will pay for the increased time and data to bring it down to CT...
"
 
Not just wrong, extremely short-sighted. The more bandwidth becomes available the more bandwidth will be used. The demand is only limited by what is currently available, the more effectively the current demand is met the greater the future demand will become.

Businesses like this are sacrificing long term profits for short term gain.
 
Grant Petersen is obviously counter-revolutionary :)

Don't you know - the rest of the world is doing it wrong.
 
Nah, nearly everyone is doing it just good enough to get by. Here is SA there's just less competition.

In what way am I counter-revolutionary?
 
Grant Petersen said:
Nah, nearly everyone is doing it just good enough to get by. Here is SA there's just less competition.

In what way am I counter-revolutionary?
Click to expand...

heh... I didn't mean to insult - it was just a crude joke. I just meant that since you've pointed out the short-sightedness of our information and telecoms sector, you were disagreeing with their ethical method of business and thus being counter-revolutionary to their cause :)

I agree wholeheartedly with you, however :)
 
Ah, I see. Not insulted, just wasn't familiar with the term.

I get it now, you're saying MTN is like "the rest of the world is doing it wrong"

Thanks :)
 
Well think about it, The MORE we have of a product, the Cheaper it will be 'EG PLASTIC' . And the less we have of a product, the higher the price will be 'EG: GOLD'.

So if bandwidth becomes more available, the cheaper it will get/the more gbs cap we will get for the price we pay now.

Go figure :)
 
'sacrificing long term profits for short term gain.' & 'we will try to hold on to margins for as long as possible'
- typical short sighted South African business mentality. SA consumers have little alternative so we just cough up and pay.
 
Bear in mind... not just MTN are holding onto higher pricing. *ALL* ISPS are currently holding onto higher pricing...
 
They would have to be. It just takes one ISP to wake up and all the others will be forced to follow after. :D
 
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You are assuming that every ISP, back haul network provider and telecomms company in South Africa is going to collude on prices? That's a very big assumption. There are enough of them that all it takes is one little guy to start a price war and all the collusion goes out the window. Good luck with that. The problem is not price collusion... it is access to the Local Loop and technology limitations. that is all.
 
I'm not talking about price collusion. I am simply describing the inevitable consequences of apathy and greed. It is only necessary to undercut a competitor by a small margin in order to gain a significant advantage. Competitors generally do not provide services at a much lower cost than is absolutely necessary to gain advantage.

What such a strategy ignores is that businesses and individuals rely on these services in order to maximize their own profits. Providing the best possible service for their investment will not only increase future demand for this service, but will also help ensure that these businesses and individuals will be in a position to pay for it.

Little guys are obviously not in a position to enter a price war.
 
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