Telkom's new charge system will affect many small businesses and home users.
November 7, 2005
By Cara Christian
Telkom's new pay-per-gig and hard capping locally is going to have a negative impact on many small and medium size enterprises (SMMEs) in South Africa. On November 1, Telkom introduced a per-gig billing system. This should effectively eliminate most of the high cap services offered by various internet service providers (ISPs) over the past few months.
Users will now have to pay somewhere north of R2 000 for a 30-gig account. At the moment, this price ranges between R200 and R600.
While this new billing system will benefit low-end users, many SMMEs and home users will find the new changes a hardship.
Many ISPs are unhappy with this new system and even started a petition to try to fight the proposed new billing scheme. The complaints range from the more frequent ADSL (asymmetric digital subscriber line) reset times to concerns about losses due to overusage when close to the cap.
These are not the only problems. SMMEs that are reliant on local Virtual Private Networks (VPN) as well as the companies offering these services will suffer the most. Numerous companies are using ADSL VPN services to connect their branches. Up to now this was a cost-effective solution as local traffic was not capped. This will all change now that we have moved into November.
Most of these companies transfer a large amount of data between the separate branches, and with hard capping locally it will become a very costly affair. Other services, like VoIP over ADSL and 24-7 remote monitoring over broadband, will also suffer the same fate.
A security and network engineer at a local IT company who would like to remain anonymous makes it clear that this could spell disaster for smaller businesses.
Local capping would absolutely wreak havoc on SMMEs, he said.
He further states that (local) hard capping will force a great number of companies to revert to extremely expensive and slow Frame Relay or Diginet technologies to maintain critical business.
But businesses using VPNs and related services are not the only ones that will suffer.
Many companies and individuals are at present using local services to host their websites to accommodate capped ADSL users. MyADSL is an example of such a website. With hard capping there is no real need for local hosting. Many companies will move their websites to international hosts where the cost can be up to 20 times cheaper than in South Africa (because of the high bandwidth costs in South Africa).
