Cheaper Internet access is coming soon

Another reply from WebAfrica...
-----------------------
Hi Gary,

Yes you have nothing to worry about.
Webafrica is about to take a large step forward now that we have prepared our staff/management/training/suppport/phone & ticket systems ect to be 100% ready for the increased client loads

Once the Seacom cable is up and running we will make sure our clients receive the best prices possible .
Until then, keep well :)
-----------------------
 
Somehow i don't think telkom are worried, no price decrease nothing yet from them, i would imagine this is rather concerning that telkom seemed unconcerned about this.
 
killadoob said:
Somehow i don't think telkom are worried, no price decrease nothing yet from them, i would imagine this is rather concerning that telkom seemed unconcerned about this.
Click to expand...

All price fixing deals and law-suits is possibly already in place to stem the tide untill 2020+.
 
killadoob said:
Somehow i don't think telkom are worried, no price decrease nothing yet from them, i would imagine this is rather concerning that telkom seemed unconcerned about this.
Click to expand...

I am not optimistic about Telkom responding to our e-mails. But they would be crazy to not remain competitive when the other ISP's start undercutting them. Remember Telkom and Mweb together have more than 50% (probably more than that) of the broadband subscriptions. If people are educated about lower prices from other providers they will move... but if they are happy with Telkom or Mweb they will keep paying their prices. The crazy thing is that Mweb is already more expensive than most other providers and yet the mass of consumers still stay with them.
 
by the way... the e-mails we sent to Telkom were not just to Customer Support... they were sent to specific people. so we are hoping for some kind of response.
 
We demand cheaper broadband, if we don't receive it we will make the internet ungovernable!:D

Seriously though I really want to see what happens to pricing, this is going to get very interesting, yay SEACOM!

I'm currently with Axxess and I very much hope that they have prepared for SEACOM because I really like them as an ISP and would hate to have to jump to another ISP because Axxess can't offer me the prices I expect.
 
Last edited:
porchrat said:
We demand cheaper broadband, if we don't receive it we will make the internet ungovernable!:D

Seriously though I really want to see what happens to pricing, this is going to get very interesting, yay SEACOM!

I'm currently with Axxess and I very much hope that they have prepared for SEACOM because I really like them as an ISP and would hate to have to jump to another ISP because Axxess can't offer me the prices I expect.
Click to expand...

so did you e-mail them yet? We haven't had a response from them yet. I will repost the e-mail for you to send.
 
I think the Mweb dilemma is because they are very good at punting their service.

Buy any PC at Game and what is included in the discount? A Mweb subscription!

How many people buy from Game just because they think they got the PC at a steal?
MILLIONS!
 
Cant wait ...Seacom = Early Xmas present

Currently i have one of those vodacom 3G myMEG 500 account for which i pay R249 per month - great timing coz i'm up for renewal and the call centre person asked me if i'm willing to carry on and renew the account.:rolleyes:

Compare this to what can be expected when Seacom launches the above would be considered a blantant rip off of note - so waiting in anticipation for the price war to start with the ISP's :)
 
Telkom are not allowed to make any announcements as they are in a closed period ahead of the release of its annual results on 22 June 2009.
 
Draft Letter to your Internet Service Provider....

-------------
Dear Internet Service Provider:

As you are probably aware by now, the construction of the Seacom undersea cable is complete and is the cable is now in the testing phase. The Seacom cable is scheduled to go live on June 27, 2009. Seacom's aggressive pricing structure promises that South Africans will enjoy benefits of cheaper international Internet access within the next few months. Savings of at least 30 to 40% or more are expected on international connectivity since Seacom's wholesale pricing undercuts current providers by as a much as two-thirds.

I anticipate that you are in the process of preparing to connect to Seacom through your top tier providers here in South Africa and would like to ask you the following questions.

1) How have you as an ISP prepared for Seacom? What preparations or inquiries have you made to date?
2) When do you anticipate connecting to Seacom? or through to Seacom using top tier providers?
3) What pricing models and products are you looking at or proposing for the next few months?
4) How are you educating your customers about the coming benefits of Internet Access through the Seacom cable?
5) What logistical problems do you foresee in connecting to Seacom and providing access through to Seacom?

I assure you, that I as a customer an keenly interested in the answers to these questions and I intend to vote with my Rands as soon as Seacom access becomes commercially available. I would love it if you can provide me with the cheaper access I need. We in South Africa have been forced to pay inflated prices for far too long now and we demand cheap, affordable internet access. Let me specify my expectations for you.

1) I expect that prices will decrease in the next three months.
2) I expect that my internet cap will increase in the next three months.
3) I expect that latency and bandwidth throughput will be improved in the next three months.

I look forward to hearing from you regarding your plans. And I look forward to doing business with you.

Yours Faithfully.
A. Consumer

-------------

Send to....

[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
 
Hi

I see we are one of the ISP's this questionaire was sent to so I thought it best to respond here. There is a huge expectation of a monsterous price drop as soon as the Seacom cable system is live as a result of only partial information being being made available to the public and a lot of marketing hype. I believe this is going to result in a lot of anger from the public when this does not happen.

Firstly I think it is important to differentiate between the wholesale international bandwidth market and retail broadband sales. Secondly I think it is equally important to realise that Seacom lands in Mtunzini Durban which is exactly near NOBODY and finally it is important to realise that international bandwidth is only one component of the total adsl cost.

Seacom provides bandwidth on two models
a) An indefeasible right of use agreement (IRU) where effectively you own a portion of the cable for the duration of the term which is either 15 or 20 years. This is a once off upfront payment ranging for 4.3m USD if you purchase as STM-1 (155Mb/s worth of bandwith ) to 1.4m USD per STM-1 if you buy 64 x STM-1 (STM-64). This is an unknown asset class on an untested cable system so even if the banks where not in financial crisis it would be fairly difficult to raise finance. Also as much money as you might think ISPs are making it is unlikely many have this amount of unencumbered cash lying around. Assuming finance can be raised it will certainly be at prime + some large number and the term of the finance will certainly not be over the duration of the contract.

b) This leaves seacoms rental model where the prices are roughly 30% less than what you can currently get at the moment.

Given the above information at most there can be a 30% price reduction on international bandwidth. Now if you had a 100Mb pipe to SAIX and you switched this to seacom you would enjoy an immediate price reduction as soon as you could migrate from one provider to another and you were not locked into a term contract. However for most people asking this question this is not the case. So lets see what impact seacom can possibly have on the adsl market. LEts take our 1 price 1 Gig account at R169. This is made up as follows
R134 for the adsl circuit and R35 for the 1Gig cap.

So assuming the 35 is made up 100% of international bandwidth (which it isn't) , the maximum reduction be R10.50. Lets assume we decide to give you more cap, 30% will give you a whopping 0.3Gigs - assuming some sort of oversell ratio is applied this may go up to 0.5Gigs.

At this point in time you are probably not jumping for joy. But it is a little bit worse. Most of the seacom prices are quoted to their POP which is at Neotels premises in midrand. You still have to get it from there to your premises , so you have the following options- backhaul it using neotel or Telkom or self provide it. Since it is a fair distance between cape town and midrand this is not a 10 second exercise to self provide. Since Neotel have it on their premises already if you ask them to get it anywhere else in the country they quote you a price per Mb for the backhaul from your premises to theirs which is the same as the price per Mb from mtunzini to London which effectively makes the price per Mbit more expensive than it is now. So unless you buy Seacom from Neotel directly or you move your infrastructure to Neotels' midrand pop or you buy bandwidth from Neotel you cannot even come close to achieving a 30% price saving.

So when the prices don't drop in the next 3 months, because I cannot see how it can drop significantly, you can either blame seacom for not landing in all major centres or Neotel for refusing to backhaul at a reasonable rates or the press for creating a false expectation

Regards

Laurie


Garyvdh said:
Draft Letter to your Internet Service Provider....

-------------
Dear Internet Service Provider:

As you are probably aware by now, the construction of the Seacom undersea cable is complete and is the cable is now in the testing phase. The Seacom cable is scheduled to go live on June 27, 2009. Seacom's aggressive pricing structure promises that South Africans will enjoy benefits of cheaper international Internet access within the next few months. Savings of at least 30 to 40% or more are expected on international connectivity since Seacom's wholesale pricing undercuts current providers by as a much as two-thirds.

I anticipate that you are in the process of preparing to connect to Seacom through your top tier providers here in South Africa and would like to ask you the following questions.

1) How have you as an ISP prepared for Seacom? What preparations or inquiries have you made to date?
2) When do you anticipate connecting to Seacom? or through to Seacom using top tier providers?
3) What pricing models and products are you looking at or proposing for the next few months?
4) How are you educating your customers about the coming benefits of Internet Access through the Seacom cable?
5) What logistical problems do you foresee in connecting to Seacom and providing access through to Seacom?

I assure you, that I as a customer an keenly interested in the answers to these questions and I intend to vote with my Rands as soon as Seacom access becomes commercially available. I would love it if you can provide me with the cheaper access I need. We in South Africa have been forced to pay inflated prices for far too long now and we demand cheap, affordable internet access. Let me specify my expectations for you.

1) I expect that prices will decrease in the next three months.
2) I expect that my internet cap will increase in the next three months.
3) I expect that latency and bandwidth throughput will be improved in the next three months.

I look forward to hearing from you regarding your plans. And I look forward to doing business with you.

Yours Faithfully.
A. Consumer

-------------

Send to....

[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Click to expand...
 
Thanks for the post Laurie.

It speaks of the problem that all ISP's and this country is faced with, that damn local loop.

WA and OW's responses are encouraging.

Let's see how this plays out.
 
Laurie,

Thanks, you just confirmed what I have been saying all along.
 
laurie said:
Hi

I see we are one of the ISP's this questionaire was sent to so I thought it best to respond here....
Click to expand...

Hi Laurie. Thanks for the information.

Assuming you are indeed authorised to speak for your ISP, I have a few questions and comments.

1) Yes there has been a lot of hype, but at the same time we have been spoon fed the line that international connectivity has been the bane of our pricing structures for so long now. You can't blame the public for expecting that prices will drop when they have been told by almost every ISP that they can't help charging that much cos it was out of their hands. Maybe the ISPs should have made their pricing structures more clear back then rather than blaming International costs.

2) What is stopping the Independent ISPs from getting together and pooling their resources to purchase an STM together, even if it is a few of the smaller STMs? While this may not provide sufficient total connectivity, it is at least a short term, or stopgap or side option.

3) Seacom's rental model of 30% savings is great. I would not sneeze at 30% savings.

4) Neotel themselves can (once they have sorted out their network) drop prices and begin to provide to the general public.

5) The interlink situation is only a temporary setback, not a permanent block. Everybody and his brother are laying cable. Companies like Dark Fibre African (and as we heard today Infraco), will being interlinking and offering backhaul to the ISPs.

6) being locked into a long term contract is not a great excuse, as the ISPs' have had more than a year to plan their lease agreements. If they are stuck with Telkom long after Seacom goes live that is their own problem. I wish them well with their future business.

7) Other Companies like Internet Solutions, iBurst, Vodacom and MTN are all in a good position to also lower costs almost immediately since they already have interlinks in place.

8) Telkom themselves will also be in a position to lower prices almost immediately. There is no reason, other greed for them not to do so.

I appreciate your trying to put the brakes on our optimism, but the situation is not as bleak as you make out.... and it is only a temporary situation. So it takes six months longer to make all the necessary interconnections. But the lower prices are guaranteed. It is just a matter of time. So it's not gonna happen in 3 months. We'll still be here after December as well.
 
laurie said:
Hi

I see we are one of the ISP's this questionaire was sent to so I thought it best to respond here. There is a huge expectation of a monsterous price drop as soon as the Seacom cable system is live as a result of only partial information being being made available to the public and a lot of marketing hype. I believe this is going to result in a lot of anger from the public when this does not happen.

Firstly I think it is important to differentiate between the wholesale international bandwidth market and retail broadband sales. Secondly I think it is equally important to realise that Seacom lands in Mtunzini Durban which is exactly near NOBODY and finally it is important to realise that international bandwidth is only one component of the total adsl cost.

Seacom provides bandwidth on two models
a) An indefeasible right of use agreement (IRU) where effectively you own a portion of the cable for the duration of the term which is either 15 or 20 years. This is a once off upfront payment ranging for 4.3m USD if you purchase as STM-1 (155Mb/s worth of bandwith ) to 1.4m USD per STM-1 if you buy 64 x STM-1 (STM-64). This is an unknown asset class on an untested cable system so even if the banks where not in financial crisis it would be fairly difficult to raise finance. Also as much money as you might think ISPs are making it is unlikely many have this amount of unencumbered cash lying around. Assuming finance can be raised it will certainly be at prime + some large number and the term of the finance will certainly not be over the duration of the contract.

b) This leaves seacoms rental model where the prices are roughly 30% less than what you can currently get at the moment.

Given the above information at most there can be a 30% price reduction on international bandwidth. Now if you had a 100Mb pipe to SAIX and you switched this to seacom you would enjoy an immediate price reduction as soon as you could migrate from one provider to another and you were not locked into a term contract. However for most people asking this question this is not the case. So lets see what impact seacom can possibly have on the adsl market. LEts take our 1 price 1 Gig account at R169. This is made up as follows
R134 for the adsl circuit and R35 for the 1Gig cap.

So assuming the 35 is made up 100% of international bandwidth (which it isn't) , the maximum reduction be R10.50. Lets assume we decide to give you more cap, 30% will give you a whopping 0.3Gigs - assuming some sort of oversell ratio is applied this may go up to 0.5Gigs.

At this point in time you are probably not jumping for joy. But it is a little bit worse. Most of the seacom prices are quoted to their POP which is at Neotels premises in midrand. You still have to get it from there to your premises , so you have the following options- backhaul it using neotel or Telkom or self provide it. Since it is a fair distance between cape town and midrand this is not a 10 second exercise to self provide. Since Neotel have it on their premises already if you ask them to get it anywhere else in the country they quote you a price per Mb for the backhaul from your premises to theirs which is the same as the price per Mb from mtunzini to London which effectively makes the price per Mbit more expensive than it is now. So unless you buy Seacom from Neotel directly or you move your infrastructure to Neotels' midrand pop or you buy bandwidth from Neotel you cannot even come close to achieving a 30% price saving.

So when the prices don't drop in the next 3 months, because I cannot see how it can drop significantly, you can either blame seacom for not landing in all major centres or Neotel for refusing to backhaul at a reasonable rates or the press for creating a false expectation

Regards

Laurie
Click to expand...

So THERE WE GO! A portion of R10.50 OR/AND 0.3 GB extra CAP. WOW. FM Radio here I come.
 
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