Cable Modem

[Jedi]

I have moved out to Shenzhen Special Economic Zone in China for a few months. Was just thinking of SA ADSL and now that I am here can see what a complete rip off Telkom really is. China is not exactly a first world country, the city I live in is as close as it gets here I suppose. Anyway the first day I moved into my apartment I decided to get the process going of getting online.

One phone call later and my Motorola Surfboard Cable Modem was on it's way... A little later I was online for a measly 100RMB per month ( about R70 I think ). Modem for free and speeds of 250kpbs with NO CAP !!!

ADSL is alot faster here and is also unlimited and goes for a similiar price to the Cable Modem charge !!!

 

[mbs]

Economies of scale play a big role in China's rollout, as does the patriotic will not to be seen as sucking the hind tit... *sigh*

 

[georgestrydom]

I cannot understand this "economies of scale" crap that everybody eludes to whenever anybody deigns to mention that adsl is much cheaper in this country or that country.
The situation in this country is quite simple. Firstly, we have an infrastructure that was paid for years ago. Secondly if you buy 1 million adsl connection points, (which should be about the size of our potential market, <b>at the right price</b>), or 1 billion adsl connection points, whoever manufactures them can only go as low as it costs to make them, so your discount is not going to get that much better.
So if anything, we should be much better off in this country. Telkom don't have to put in lines to 90% of there connections. I will bet that in China they more than likely only have about 30% coverage of there viable population.
Lastly being a parent, I can only equate it to feeding your chidren. With one child you will end up with a fat kid. With ten, they will all be fed, but pretty skinny. So therefore in South Africa, we should have nice 8Mbs connections with no capping and if Telkom then asked me to pay R1400 per month, I would quite happily do so.

 

[mbs]

Econ 101 - supply/demand elasticity impacts on final price - if you don't follow, the usual reduction in the price of technology from that pegged at initial availability (particularly computing technology), should explain it. Bottom line: pure numbers reduce the selling price - some manufacturers even consider discounting the finished product at a loss, as they generate revenue from bulk component purchases, for example. Hence, 'economies of scale'.

Concerning Telkrap, their infrastructure continues to need upgrade/replacement to cater for services like DSL - PODO can throw more light on the subject. The crappy service we currently have is partly a consequence of their reluctance to invest in infrastructure upgrade/replacement. This implies capital investment, and economies of scale play a large role in the determination of ROI...