Sign up with GoogleFelt like pasting this discussion that happend today, lots of educated views expressed here, figured some here might benefit from it.
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Hi everyone
I've heard some rumblings about the status of the SNO. But nothing
definite, as I said rumblings.
Does anyone know about anything that is in the works?
Should I be asking this on ioz-legal?
Liam
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> I've heard some rumblings about the status of the SNO. But nothing
> definite, as I said rumblings.
>
> Does anyone know about anything that is in the works?
>
> Should I be asking this on ioz-legal?
Why bother asking at all? One day, when you're old and gray,
we'll have an SNO. But by then, we'll all be using wildcat WiMax
and flying hovercraft.
But seriously, the judicial review process is being delayed by -
wait for it - deadlines missed by the DOC. Nexus is still
claiming that the inclusion of Communitel and Two Consortium as
majority shareholders with minority stakes is unfair, and will
lead to a non-viable SNO.
Doesn't look like we'll get a resolution before the end of the
year. (And that was said about 2002 and 2003 too...)
More details at:
http://www.itweb.co.za/sections/telecoms/2004/0408021224.asp
http://www.itweb.co.za/sections/telecoms/2004/0408031143.asp
Note the gratuitous invocation of "sub judice" by the DOC. This
is not a blanket prohibition on reporting about matters before
the court. It is not designed as a convenient dodge allowing
people to refuse to answer questions.
In fact, it is up to journalists to evaluate whether information
is sub judice, since they are the ones risking contempt of court.
The sub judice rule is designed to avoid bias in a jury or a
judge which may result from legal opinions or evidentiary
information being discussed or disclosed in the media before a
case is concluded.
It specifically does not prevent anyone from commenting on the
facts of a case or its timeline.
The rule also may not apply in cases where ministerial decisions
are in question, or important public-interest matters concerning
the economy, security or essential services are at issue -
provided such media coverage will not influence the outcome of
the case.
The DOC is once again shirking its accountability to the public.
But then, when even people contracted to the DOC for a public
relations project are told that key people "don't speak to the
press", one gets an idea how deep the paranoia and arrogance runs.
--
| Ivo Vegter | Cerberus Editing & Consulting |
| ivo@hivemind.net | Mobile: +27-84-210-2003 |
"I was gratified to be able to answer promptly. I said,
'I don't know.'" - Mark Twain
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Ivo Vegter wrote:
> smitty@absamail.co.za wrote:
>
>> I've heard some rumblings about the status of the SNO. But nothing
>> definite, as I said rumblings.
>> Does anyone know about anything that is in the works?
>>
>> Should I be asking this on ioz-legal?
>
>
> Why bother asking at all? One day, when you're old and gray,
> we'll have an SNO. But by then, we'll all be using wildcat WiMax
> and flying hovercraft.
>
The way Telkom is setup at the moment. What happens if they simply are
reduced to nothing when there is competition?
We are left with the SNO as another monopoly, and back to square one.
Will the SNO really help anything at all?
--
Colin Alston <karnaugh@karnaugh.za.net>
Quantum Logic Chicken:
The chicken is distributed probabalistically on all sides of the
road until you observe it on the side of your course.
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Colin Alston said: -
> The way Telkom is setup at the moment. What happens if they simply are
reduced to nothing when there is competition?
Huh? What makes you think that Telkom would suddenly vanish off the face of
the planet when (and if) the SNO eventually starts operating? Apart from
Telkom's enormous investment in infrastructure & people, Telkom's PROFIT
alone this last year was nearly three times the total investment in the SNO
so far.
No, Telkom won't being going away anytime soon. They have the size, the
reserves and the determination to last out any "fight" that might happen -
which is why the SNO has stated "we're not starting a price war" - back,
that is, when they still thought that they might be getting a license soon.
William Stucke
ZAnet Internet Services (Pty) Ltd
+27 11 465 0700
William@zanet.co.za
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William Stucke wrote:
>Colin Alston said: -
>>The way Telkom is setup at the moment. What happens if they simply are
>>reduced to nothing when there is competition?
>
>Huh? What makes you think that Telkom would suddenly vanish off the face of
>the planet when (and if) the SNO eventually starts operating? Apart from
>Telkom's enormous investment in infrastructure & people, Telkom's PROFIT
>alone this last year was nearly three times the total investment in the SNO
>so far.
>
>No, Telkom won't being going away anytime soon. They have the size, the
>reserves and the determination to last out any "fight" that might happen -
>which is why the SNO has stated "we're not starting a price war" - back,
>that is, when they still thought that they might be getting a license soon.
>
I question the comments about "Telkom's enormous investment in
infrastructure & people". I think a reason for Telkom's excess profits
is the fact that they are just juicing ancient technology that’s been in
place for ages, for all its worth. As well as Telkom's massive
retrenchments recently.
The “3Gb Cap” is reasoned by Telkom as a solution to the fact that they
have piss all international bandwidth. A “massive investment” would
suggest by common logic that they would bring more bandwidth into the
country, thus lowering the prices and increasing demand instead of cost.
Instead they use silly rules, and high prices to control it. It doesn’t
take much to see that that kind of action wouldn’t survive 1 day in a
competitive market (which the SNO will not be any time soon obviously,
but asuming we say took Telkom and droped them into the American market
just as an example).
Even if they were to exist harmoniously with the SNO, like you say they
wont start a price war. What’s the point then of competition if there is
none? Its still government controlled throttling of the market at the
end of the day, there would be no true release from monopolistic control
unless it was "deregulated" (As in other companies could apply and be
granted licenses to build a fixed line network at the very least.).
You're right, they have the ability to compete if they want to. The
question is whether they do want to, and depending what tactic they use
it could benefit, or make worse the situation.
--
Colin Alston <karnaugh@karnaugh.za.net>
Quantum Logic Chicken:
The chicken is distributed probabalistically on all sides of the
road until you observe it on the side of your course.
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Colin Alston wrote:
> Even if they were to exist harmoniously with the SNO, like you say they
> wont start a price war.
On a tangent here I'd like to address the perception that the SNO will
result in reduced prices for telecommunications services. As it is Telkom
has hiked rates beyond what can be deemed acceptable for some years now (and
have the profits to show for it). The introduction of the SNO won't
immediately reduce telecommunication costs. Instead they're more likely to
price certain services just under what Telkom charges. (Rationale: People
are already paying X rands per call and therefore it makes sense to charge
X-10% for calls in order to get customers.)
The introduction of a third cellular provider didn't result in massive cost
savings for cellular calls. Instead we saw 'price wars' occurring in terms
of new services available, with the idea being that any provider would be
recognized (and used) on the basis of their service offering and *not* cost
of their calls.
[Bear in mind cellular calls are artificially high because Telkom gets a
slice be it in termination charges or the provision of the backend network
infrastructure which even cellular providers have to use]
Since the SNO will have to try and provide new lines and services to areas
which lack them this certainly won't be their target market for some years.
Instead (imho) they'll be pursuing the power users on the Telkom network.
One of the key market segments would be dialup Internet users and parallel
to that ISPs.
If the SNO attracts ISPs to their network they still get termination charges
when people on Telkom lines phone the ISPs. If on top of that they can
convince the dialup users to move to their network they can start generating
some income relatively quickly. I reckon the SNO (once it becomes something
other than vapourware) will aggressively market/target those people who are
most dependent on Telkom for business or personal use. I doubt the savings
will be very much though. It's more likely some form of bundled service will
be offered with little real different in costs. And then there is the market
which will gladly move away from Telkom just because there is some future
choice.
I've been online since 1996, initially at an early adopter iCafe, then via
dialup with my employer (who predicted the fall of the net by 1998) and then
for about a year at a large corporate (yet dialup from home was faster).
Then a 64k connection for a while and then back to two instances of basic
leased lines (analogue and digilog) and in the last year have reverted to
dialup again. For most of these years Internet communication costs have
taken between 25% and 50% of my income (as income varied). With the various
new services available from Sentech's offering to Telkom ADSL and even
illegal WISPs I still haven't seen any real progress towards a reduction in
communication costs. Being online still costs a fortune!
I have implemented solutions where small businesses have gone from
R3500-R4000 a month in Telkom dialup charges to half that with digilog
connectivity. Yet they still complain about speed.
I hear stories from UK/Europe where people order broadband connectivity for
a pittance and get it within a few days. I'm waiting for the day when I can
get 24x7 connectivity for less than my cellphone bill. I doubt that happen
for some years.
And no matter how liberal the market may get over the next couple of years,
unless some manner is found in which international bandwidth can be
increased and cost considerably less than it does I see no real change in
how things are structured.
--
Bretton Vine :: gsm://+27.82.494.6902 :: http://bretton.hivemind.net
When asked by an anthropologist what the Indians called America before the
white man came, an Indian said simply, "Ours". - Vine Deloria, Jr
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Hi
> I question the comments about "Telkom's enormous investment in infrastructure
> & people". I think a reason for Telkom's excess profits is the fact that they
> are just juicing ancient technology that's been in place for ages
this is a fallacy that I think people just regurgetate.
telkom's ATM networks (allbeit built over an older SDH technology, but by no means
outdated) will more than likely start increasing in customer base as demand for
more than simple megaline without SLA increases.
> The "3Gb Cap" is reasoned by Telkom as a solution to the fact that they
> have piss all international bandwidth.
I don't think this is the case. It's a means by which they can make sure that
broadband customers don't flood their expensive international links.
Keep in mind that ADSL bandwidth equivelant would still cost a fair amount more on
megaline, even with their cap. I'm still surprised they sell it at the price they
do. I don't for a second think they have a lack of bandwidth, they're just protecting
their other products and networks, which to me seems a logical step.
Regards
--Rob
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fingers wrote:
>
> I don't think this is the case. It's a means by which they can make sure
> that broadband customers don't flood their expensive international links.
> Keep in mind that ADSL bandwidth equivelant would still cost a fair
> amount
> more on megaline, even with their cap. I'm still surprised they sell
> it at
> the price they do. I don't for a second think they have a lack of
> bandwidth, they're just protecting their other products and networks,
> which to me seems a logical step.
Maybe I should change my comment to rather say that Telkom has not given
access to their "new technology" at a realistic price (and when I say
unrealistic I mean just plain bloody insane)
512K with a 3Gb limit boils down to less throughput over all per month
than a 33600 modem and digilog line.
Compared to peering points such as LINX where their throughput floats
somewhere between 20 and 30GBps (Ref:
https://stats.linx.net/cgi-pub/combined?log=combined.bits), I have to
say that we still have a very severe lack of bandwidth if our ADSL lines
cannot provide more throughput than analog lines. ISP's of course can
easily still compete with each other and survive in the market, but
Telkom is in control. We do then have the Zimbabwe of all Internets, and
if that situation pleases you then I question which side you work for ;-)
My point is only that the demand for internet access, is being
controlled by a lack of services (or overpricing there of) so as to
return huge profits. In terms of business and shareholders that’s great.
In terms of moral and future for South Africa I'll let someone else fill
in the blanks…
--
Colin Alston <karnaugh@karnaugh.za.net>
Quantum Logic Chicken:
The chicken is distributed probabalistically on all sides of the
road until you observe it on the side of your course.
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Colin Alston wrote:
> I question the comments about "Telkom's enormous investment in
> infrastructure & people". I think a reason for Telkom's excess profits
> is the fact that they are just juicing ancient technology that’s been in
> place for ages, for all its worth. As well as Telkom's massive
> retrenchments recently.
True. And as a result, they have billions in the bank. Prices go
up, infrastructure costs are low, productivity per employee is
high. That's a nice perch from which to convince customers that
the business risk of going with a competitor whose future is
uncertain will be high.
> The “3Gb Cap” is reasoned by Telkom as a solution to the fact that they
> have piss all international bandwidth.
They have FAR more international bandwidth than they actually
sell. They control supply (much like De Beers does) to keep
prices artificially high.
A useful side-effect of doing this is that obsolete products
such as Diginet, which cost zip to maintain and generate massive
profit margins, remain viable cash cows.
> A “massive investment” would
> suggest by common logic that they would bring more bandwidth into the
> country, thus lowering the prices and increasing demand instead of cost.
Why, if you can profiteer, and keep a ton of bandwidth in your
back pocket for a rainy day?
> Instead they use silly rules, and high prices to control it. It doesn’t
> take much to see that that kind of action wouldn’t survive 1 day in a
> competitive market (which the SNO will not be any time soon obviously,
> but asuming we say took Telkom and droped them into the American market
> just as an example).
One new competitor, which has to buy international bandwidth
from Telkom, will make little difference. Limiting the number of
licences available ensures that no new competitors can challenge
what will, in effect, be a cartel. The cell market is a perfect
example.
> Even if they were to exist harmoniously with the SNO, like you say they
> wont start a price war. What’s the point then of competition if there is
> none? Its still government controlled throttling of the market at the
> end of the day, there would be no true release from monopolistic control
> unless it was "deregulated" (As in other companies could apply and be
> granted licenses to build a fixed line network at the very least.).
Bingo. Government control over the number of licences results in
nothing more than a government-regulated cartel. It is *not* a
free, competitive market.
And even if you remove the limit on new licences, and allow
companies to form voluntarily (instead of forcing half a dozen
in-fighting consortia together on the government's terms), a
prerequisite for lower prices will be to give everyone
reasonable access to the SAT3/SAFE cable, where it lands, so
Telkom can't keep most of the fibre dark to manipulate prices.
And sadly, given Telkom's ill-gotten piggy bank, even a fair
auction won't be fair.
> You're right, they have the ability to compete if they want to. The
> question is whether they do want to, and depending what tactic they use
> it could benefit, or make worse the situation.
They have had so much time to gear up for "competition", that an
SNO cannot afford to engage in a price war. If they did, Telkom
could maintain predatory pricing for years, and by the time the
Competition Tribunal gets around to slapping it down, the SNO
will be dead and gone.
That's what SAA regularly does with new "competitors", isn't it?
SAA's economy class fare to Cape Town is now almost DOUBLE what
Sun Air used to charge for a business class seat. Funny that
this wasn't the case when Sun Air was still in business...
Don't underestimate the power a monopolist behemoth has against
a new entrant to an overregulated market. The SNO certainly won't.
Colin also wrote:
> My point is only that the demand for internet access, is being
> controlled by a lack of services (or overpricing there of) so
> as to return huge profits. In terms of business and
> shareholders that’s great. In terms of moral and future for
> South Africa I'll let someone else fill in the blanks...
You touch on an important point. If I was Telkom, I'd be doing
exactly the same (and if possible profiteer even more crassly).
Shareholders demand this, and have every right to do so. Like
any other company, Telkom makes as much money as is possible,
given the competitive environment and government regulation.
That's proper and just, and the profit motive isn't the culprit
here.
What is NOT proper and just is that the government maintains a
regulatory environment that gives Telkom this latitude. The
profit motive is good, provided that it is curbed by competitive
pressure. You charge too much for something? That's a signal for
me to compete. You make single-digit margins? Then I can't see
why I should enter that market unless I know how to lower costs
substantially.
Government should be regulating (or more properly, deregulating)
in the interest of the citizens on whose behalf it wields its
legislative powers.
That government happens to be a shareholder in Telkom (not to
mention Sentech) of course, is a criminal conflict of interest,
which goes a long way to explaining its reluctance to act in the
interest of the people.
Viva the command economy, viva!
--
| Ivo Vegter | Cerberus Editing & Consulting |
| ivo@hivemind.net | Mobile: +27-84-210-2003 |
"While democracy must have its organizations and controls,
its vital breath is individual liberty."
- Charles Evans Hughes
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- Colin Alston
colin at alston dot za dot org
"Getting traffic shaping right is easy and can be summed up in one word: Dont." -- George Barnett
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Hi everyone
I've heard some rumblings about the status of the SNO. But nothing
definite, as I said rumblings.
Does anyone know about anything that is in the works?
Should I be asking this on ioz-legal?
Liam
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> I've heard some rumblings about the status of the SNO. But nothing
> definite, as I said rumblings.
>
> Does anyone know about anything that is in the works?
>
> Should I be asking this on ioz-legal?
Why bother asking at all? One day, when you're old and gray,
we'll have an SNO. But by then, we'll all be using wildcat WiMax
and flying hovercraft.
But seriously, the judicial review process is being delayed by -
wait for it - deadlines missed by the DOC. Nexus is still
claiming that the inclusion of Communitel and Two Consortium as
majority shareholders with minority stakes is unfair, and will
lead to a non-viable SNO.
Doesn't look like we'll get a resolution before the end of the
year. (And that was said about 2002 and 2003 too...)
More details at:
http://www.itweb.co.za/sections/telecoms/2004/0408021224.asp
http://www.itweb.co.za/sections/telecoms/2004/0408031143.asp
Note the gratuitous invocation of "sub judice" by the DOC. This
is not a blanket prohibition on reporting about matters before
the court. It is not designed as a convenient dodge allowing
people to refuse to answer questions.
In fact, it is up to journalists to evaluate whether information
is sub judice, since they are the ones risking contempt of court.
The sub judice rule is designed to avoid bias in a jury or a
judge which may result from legal opinions or evidentiary
information being discussed or disclosed in the media before a
case is concluded.
It specifically does not prevent anyone from commenting on the
facts of a case or its timeline.
The rule also may not apply in cases where ministerial decisions
are in question, or important public-interest matters concerning
the economy, security or essential services are at issue -
provided such media coverage will not influence the outcome of
the case.
The DOC is once again shirking its accountability to the public.
But then, when even people contracted to the DOC for a public
relations project are told that key people "don't speak to the
press", one gets an idea how deep the paranoia and arrogance runs.
--
| Ivo Vegter | Cerberus Editing & Consulting |
| ivo@hivemind.net | Mobile: +27-84-210-2003 |
"I was gratified to be able to answer promptly. I said,
'I don't know.'" - Mark Twain
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Ivo Vegter wrote:
> smitty@absamail.co.za wrote:
>
>> I've heard some rumblings about the status of the SNO. But nothing
>> definite, as I said rumblings.
>> Does anyone know about anything that is in the works?
>>
>> Should I be asking this on ioz-legal?
>
>
> Why bother asking at all? One day, when you're old and gray,
> we'll have an SNO. But by then, we'll all be using wildcat WiMax
> and flying hovercraft.
>
The way Telkom is setup at the moment. What happens if they simply are
reduced to nothing when there is competition?
We are left with the SNO as another monopoly, and back to square one.
Will the SNO really help anything at all?
--
Colin Alston <karnaugh@karnaugh.za.net>
Quantum Logic Chicken:
The chicken is distributed probabalistically on all sides of the
road until you observe it on the side of your course.
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<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">
Colin Alston said: -
> The way Telkom is setup at the moment. What happens if they simply are
reduced to nothing when there is competition?
Huh? What makes you think that Telkom would suddenly vanish off the face of
the planet when (and if) the SNO eventually starts operating? Apart from
Telkom's enormous investment in infrastructure & people, Telkom's PROFIT
alone this last year was nearly three times the total investment in the SNO
so far.
No, Telkom won't being going away anytime soon. They have the size, the
reserves and the determination to last out any "fight" that might happen -
which is why the SNO has stated "we're not starting a price war" - back,
that is, when they still thought that they might be getting a license soon.
William Stucke
ZAnet Internet Services (Pty) Ltd
+27 11 465 0700
William@zanet.co.za
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William Stucke wrote:
>Colin Alston said: -
>>The way Telkom is setup at the moment. What happens if they simply are
>>reduced to nothing when there is competition?
>
>Huh? What makes you think that Telkom would suddenly vanish off the face of
>the planet when (and if) the SNO eventually starts operating? Apart from
>Telkom's enormous investment in infrastructure & people, Telkom's PROFIT
>alone this last year was nearly three times the total investment in the SNO
>so far.
>
>No, Telkom won't being going away anytime soon. They have the size, the
>reserves and the determination to last out any "fight" that might happen -
>which is why the SNO has stated "we're not starting a price war" - back,
>that is, when they still thought that they might be getting a license soon.
>
I question the comments about "Telkom's enormous investment in
infrastructure & people". I think a reason for Telkom's excess profits
is the fact that they are just juicing ancient technology that’s been in
place for ages, for all its worth. As well as Telkom's massive
retrenchments recently.
The “3Gb Cap” is reasoned by Telkom as a solution to the fact that they
have piss all international bandwidth. A “massive investment” would
suggest by common logic that they would bring more bandwidth into the
country, thus lowering the prices and increasing demand instead of cost.
Instead they use silly rules, and high prices to control it. It doesn’t
take much to see that that kind of action wouldn’t survive 1 day in a
competitive market (which the SNO will not be any time soon obviously,
but asuming we say took Telkom and droped them into the American market
just as an example).
Even if they were to exist harmoniously with the SNO, like you say they
wont start a price war. What’s the point then of competition if there is
none? Its still government controlled throttling of the market at the
end of the day, there would be no true release from monopolistic control
unless it was "deregulated" (As in other companies could apply and be
granted licenses to build a fixed line network at the very least.).
You're right, they have the ability to compete if they want to. The
question is whether they do want to, and depending what tactic they use
it could benefit, or make worse the situation.
--
Colin Alston <karnaugh@karnaugh.za.net>
Quantum Logic Chicken:
The chicken is distributed probabalistically on all sides of the
road until you observe it on the side of your course.
<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
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Colin Alston wrote:
> Even if they were to exist harmoniously with the SNO, like you say they
> wont start a price war.
On a tangent here I'd like to address the perception that the SNO will
result in reduced prices for telecommunications services. As it is Telkom
has hiked rates beyond what can be deemed acceptable for some years now (and
have the profits to show for it). The introduction of the SNO won't
immediately reduce telecommunication costs. Instead they're more likely to
price certain services just under what Telkom charges. (Rationale: People
are already paying X rands per call and therefore it makes sense to charge
X-10% for calls in order to get customers.)
The introduction of a third cellular provider didn't result in massive cost
savings for cellular calls. Instead we saw 'price wars' occurring in terms
of new services available, with the idea being that any provider would be
recognized (and used) on the basis of their service offering and *not* cost
of their calls.
[Bear in mind cellular calls are artificially high because Telkom gets a
slice be it in termination charges or the provision of the backend network
infrastructure which even cellular providers have to use]
Since the SNO will have to try and provide new lines and services to areas
which lack them this certainly won't be their target market for some years.
Instead (imho) they'll be pursuing the power users on the Telkom network.
One of the key market segments would be dialup Internet users and parallel
to that ISPs.
If the SNO attracts ISPs to their network they still get termination charges
when people on Telkom lines phone the ISPs. If on top of that they can
convince the dialup users to move to their network they can start generating
some income relatively quickly. I reckon the SNO (once it becomes something
other than vapourware) will aggressively market/target those people who are
most dependent on Telkom for business or personal use. I doubt the savings
will be very much though. It's more likely some form of bundled service will
be offered with little real different in costs. And then there is the market
which will gladly move away from Telkom just because there is some future
choice.
I've been online since 1996, initially at an early adopter iCafe, then via
dialup with my employer (who predicted the fall of the net by 1998) and then
for about a year at a large corporate (yet dialup from home was faster).
Then a 64k connection for a while and then back to two instances of basic
leased lines (analogue and digilog) and in the last year have reverted to
dialup again. For most of these years Internet communication costs have
taken between 25% and 50% of my income (as income varied). With the various
new services available from Sentech's offering to Telkom ADSL and even
illegal WISPs I still haven't seen any real progress towards a reduction in
communication costs. Being online still costs a fortune!
I have implemented solutions where small businesses have gone from
R3500-R4000 a month in Telkom dialup charges to half that with digilog
connectivity. Yet they still complain about speed.
I hear stories from UK/Europe where people order broadband connectivity for
a pittance and get it within a few days. I'm waiting for the day when I can
get 24x7 connectivity for less than my cellphone bill. I doubt that happen
for some years.
And no matter how liberal the market may get over the next couple of years,
unless some manner is found in which international bandwidth can be
increased and cost considerably less than it does I see no real change in
how things are structured.
--
Bretton Vine :: gsm://+27.82.494.6902 :: http://bretton.hivemind.net
When asked by an anthropologist what the Indians called America before the
white man came, an Indian said simply, "Ours". - Vine Deloria, Jr
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Hi
> I question the comments about "Telkom's enormous investment in infrastructure
> & people". I think a reason for Telkom's excess profits is the fact that they
> are just juicing ancient technology that's been in place for ages
this is a fallacy that I think people just regurgetate.
telkom's ATM networks (allbeit built over an older SDH technology, but by no means
outdated) will more than likely start increasing in customer base as demand for
more than simple megaline without SLA increases.
> The "3Gb Cap" is reasoned by Telkom as a solution to the fact that they
> have piss all international bandwidth.
I don't think this is the case. It's a means by which they can make sure that
broadband customers don't flood their expensive international links.
Keep in mind that ADSL bandwidth equivelant would still cost a fair amount more on
megaline, even with their cap. I'm still surprised they sell it at the price they
do. I don't for a second think they have a lack of bandwidth, they're just protecting
their other products and networks, which to me seems a logical step.
Regards
--Rob
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fingers wrote:
>
> I don't think this is the case. It's a means by which they can make sure
> that broadband customers don't flood their expensive international links.
> Keep in mind that ADSL bandwidth equivelant would still cost a fair
> amount
> more on megaline, even with their cap. I'm still surprised they sell
> it at
> the price they do. I don't for a second think they have a lack of
> bandwidth, they're just protecting their other products and networks,
> which to me seems a logical step.
Maybe I should change my comment to rather say that Telkom has not given
access to their "new technology" at a realistic price (and when I say
unrealistic I mean just plain bloody insane)
512K with a 3Gb limit boils down to less throughput over all per month
than a 33600 modem and digilog line.
Compared to peering points such as LINX where their throughput floats
somewhere between 20 and 30GBps (Ref:
https://stats.linx.net/cgi-pub/combined?log=combined.bits), I have to
say that we still have a very severe lack of bandwidth if our ADSL lines
cannot provide more throughput than analog lines. ISP's of course can
easily still compete with each other and survive in the market, but
Telkom is in control. We do then have the Zimbabwe of all Internets, and
if that situation pleases you then I question which side you work for ;-)
My point is only that the demand for internet access, is being
controlled by a lack of services (or overpricing there of) so as to
return huge profits. In terms of business and shareholders that’s great.
In terms of moral and future for South Africa I'll let someone else fill
in the blanks…
--
Colin Alston <karnaugh@karnaugh.za.net>
Quantum Logic Chicken:
The chicken is distributed probabalistically on all sides of the
road until you observe it on the side of your course.
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Colin Alston wrote:
> I question the comments about "Telkom's enormous investment in
> infrastructure & people". I think a reason for Telkom's excess profits
> is the fact that they are just juicing ancient technology that’s been in
> place for ages, for all its worth. As well as Telkom's massive
> retrenchments recently.
True. And as a result, they have billions in the bank. Prices go
up, infrastructure costs are low, productivity per employee is
high. That's a nice perch from which to convince customers that
the business risk of going with a competitor whose future is
uncertain will be high.
> The “3Gb Cap” is reasoned by Telkom as a solution to the fact that they
> have piss all international bandwidth.
They have FAR more international bandwidth than they actually
sell. They control supply (much like De Beers does) to keep
prices artificially high.
A useful side-effect of doing this is that obsolete products
such as Diginet, which cost zip to maintain and generate massive
profit margins, remain viable cash cows.
> A “massive investment” would
> suggest by common logic that they would bring more bandwidth into the
> country, thus lowering the prices and increasing demand instead of cost.
Why, if you can profiteer, and keep a ton of bandwidth in your
back pocket for a rainy day?
> Instead they use silly rules, and high prices to control it. It doesn’t
> take much to see that that kind of action wouldn’t survive 1 day in a
> competitive market (which the SNO will not be any time soon obviously,
> but asuming we say took Telkom and droped them into the American market
> just as an example).
One new competitor, which has to buy international bandwidth
from Telkom, will make little difference. Limiting the number of
licences available ensures that no new competitors can challenge
what will, in effect, be a cartel. The cell market is a perfect
example.
> Even if they were to exist harmoniously with the SNO, like you say they
> wont start a price war. What’s the point then of competition if there is
> none? Its still government controlled throttling of the market at the
> end of the day, there would be no true release from monopolistic control
> unless it was "deregulated" (As in other companies could apply and be
> granted licenses to build a fixed line network at the very least.).
Bingo. Government control over the number of licences results in
nothing more than a government-regulated cartel. It is *not* a
free, competitive market.
And even if you remove the limit on new licences, and allow
companies to form voluntarily (instead of forcing half a dozen
in-fighting consortia together on the government's terms), a
prerequisite for lower prices will be to give everyone
reasonable access to the SAT3/SAFE cable, where it lands, so
Telkom can't keep most of the fibre dark to manipulate prices.
And sadly, given Telkom's ill-gotten piggy bank, even a fair
auction won't be fair.
> You're right, they have the ability to compete if they want to. The
> question is whether they do want to, and depending what tactic they use
> it could benefit, or make worse the situation.
They have had so much time to gear up for "competition", that an
SNO cannot afford to engage in a price war. If they did, Telkom
could maintain predatory pricing for years, and by the time the
Competition Tribunal gets around to slapping it down, the SNO
will be dead and gone.
That's what SAA regularly does with new "competitors", isn't it?
SAA's economy class fare to Cape Town is now almost DOUBLE what
Sun Air used to charge for a business class seat. Funny that
this wasn't the case when Sun Air was still in business...
Don't underestimate the power a monopolist behemoth has against
a new entrant to an overregulated market. The SNO certainly won't.
Colin also wrote:
> My point is only that the demand for internet access, is being
> controlled by a lack of services (or overpricing there of) so
> as to return huge profits. In terms of business and
> shareholders that’s great. In terms of moral and future for
> South Africa I'll let someone else fill in the blanks...
You touch on an important point. If I was Telkom, I'd be doing
exactly the same (and if possible profiteer even more crassly).
Shareholders demand this, and have every right to do so. Like
any other company, Telkom makes as much money as is possible,
given the competitive environment and government regulation.
That's proper and just, and the profit motive isn't the culprit
here.
What is NOT proper and just is that the government maintains a
regulatory environment that gives Telkom this latitude. The
profit motive is good, provided that it is curbed by competitive
pressure. You charge too much for something? That's a signal for
me to compete. You make single-digit margins? Then I can't see
why I should enter that market unless I know how to lower costs
substantially.
Government should be regulating (or more properly, deregulating)
in the interest of the citizens on whose behalf it wields its
legislative powers.
That government happens to be a shareholder in Telkom (not to
mention Sentech) of course, is a criminal conflict of interest,
which goes a long way to explaining its reluctance to act in the
interest of the people.
Viva the command economy, viva!
--
| Ivo Vegter | Cerberus Editing & Consulting |
| ivo@hivemind.net | Mobile: +27-84-210-2003 |
"While democracy must have its organizations and controls,
its vital breath is individual liberty."
- Charles Evans Hughes
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- Colin Alston
colin at alston dot za dot org
"Getting traffic shaping right is easy and can be summed up in one word: Dont." -- George Barnett
]
