Flatrate Schmatrate

[henkk78]

Note to MyADSL forum readers: I'm putting this out there because I genuinely like to hear counter-arguments (and am willing to change my viewpoint), not because I have a masochistic desire to be flamed... (but be my guest and flame in any case...)

Here you go:

(from www.yeahfi.com)

Flatrate Schmatrate
Many people want flatrate internet in South Africa where we pay about $36 US for each GB we use. Flatrate broadband is being offered by the likes of IS; at a price. (about $300 US per month, with high latencies and restrictions on P2P)

Imagine the following scenario. You and your mate go to the local shopping mall. He buys a pair of sneakers, a new DVD player, a present for his girlfriend and 3 books at the bookstore. You buy some new socks.

Both of you pay a flatrate of $500 per month for your shopping mall "subscription". I.e. you've just subsidized everything your mate bought. Do you think consumers and shopowners would buy into this concept of shopping mall subscriptions? Of course not!

So why on earth would you want flatrate internet, where the majority of users are subsidizing the excesses of a minority?

It used to be that the internet was about reading emails and surfing the web. These days it's about VoIP, IPTV, streaming audio, podcasts, YouTube and Web 2.0 applications. One person could be getting a lot more value out of an hour on the net than another!

It makes sense to me that the more you 'buy' at this new 'shopping mall', the more you should pay. Of course you should qualify for bulk discounts, but why a flat rate for unlimited usage?

I envisage a world in which everyone is online all the time. There's simply no point in charging for the time you are online. You'll be online from birth. Therefore, Skyrove charges per Megabyte. It's a natural differentiator.

There's a pretty much direct correlation between the value-add most online services you use and the amount of bandwidth it consumes. Web 2.0 apps use more bandwidth than surfing, VoIP uses more bandwidth than Web 2.0, video uses more bandwidth than VoIP etc.

One of the main reasons we are given is that consumers simply don't understand the concept of MB. The sooner internet operators realise that consumers aren't idiots and that "Megabyte Education" isn't impossible, the sooner we're going to see more affordable internet access.

 

[dabouncer]

Time to pick up those lose screws i think...

 

[henkk78]

lose != loose

/me eats, shoots and leaves

 

[AdLo]

I envisage a world in which everyone is online all the time. There's simply no point in charging for the time you are online. You'll be online from birth. Therefore, Skyrove charges per Megabyte. It's a natural differentiator.

Absolutely bloody genius!
Please someone inform Mbeki about this guy so that he can join the president's Presidential International Advisory Council ASAP so that he can solve South Africa's highest in the world internet prices.

 

[HellTel]

And they actually allow people like this to wonder our already corrupted streets? How much (in gigs) did you get free from Telkom to write that bunch of bull?

 

[bwana]

Imagine the scenario that the per gb rate was in line with international standards. This whole argument would then be irrelevant.

 

[henkk78]

And they actually allow people like this to wonder our already corrupted streets?

LOL...

anyways, go to google and type in: 'define wonder'

/me eats, shoots and leaves again...

 

[Debbie]

- Telkom is the biggest shareholder in the SAT 3 cable, therefore...
- ....Telkom is obtaining a gig for a fraction of the price they are getting it for. Serious estimates for the cost to Telkom for a GB go as low as R2/GB. In some instances, Telkom is reselling one GB of (international capacity) for R1000.
- It is widely suspected that Telkom isn't even using up the majority of their capacity on SAT 3. I've also got this gut feeling that the whole 'international bandwidth is scarce throughout the world' is something of a lie (this is just a gut feeling as opposed to a technical fact)
- We'd call for flatrate shopping if it was the international standard in the rest of the world. The flatrate shopping agument isn't a fair comparison in any case since the equivilent would be for both guys to get what they liked and when
- Dividing up who gets how much traffic on the internet and charging per each exact individual use is contrary to the general social-economic force-flow of the internet. My point is metaphysical.
- No one's about to do great damage to other users by downloading on their 1Mb down/256k up lines which come with contention ratios Telkom won't even discuss and are also shaped to heck
- South Africa's hardly the most likely market in the world to have huge numbers of big downloaders just waiting in the wings for the opportunity to pump data to the max. If not, then Slimothy can always be removed.

.....need more counter-arguments, or are you convinced yet?

 

[Gatecrasher]

I don't understand - the writer describes an ideal scenario, per MB pricing, which is the de facto status quo in SA, and then goes on to argue that once this situation (that we already have) comes about, we'll see cheaper internet access. Huh?

 

[Debbie]

Sorry I was thinking more about this so had to post again - forgive the tone, it's not a flame, it's just the best way I can argue your points.

"One person could be getting a lot more value out of an hour on the net than another!"

Indeed! We should also charge according to distance from exchange - like I mean, how fair is it that the guy 30 meters from the exchange gets a more stable connection than the guy 2km from the exchange! Also, it's not fair that the people in the city have to subsidise the installation of lines in the rural areas- it costs Telkom ten times as much to install lines in farm and bush areas than it does in the city areas! And it's also just not right that since I'm an advanced computer user, I don't have to call the ADSL helpline ten times a day - therefore I'm not costly in terms of needing support staff so I should get lower tariffs! Also, I live right opposite the Telkom deployment centre, so why do my call-out fees not reflect the petrol costs Telkom doesn't incur from my call-outs? Also, I used less of their pen ink when I signed the contract, so....

.....ok, so the pen ink thing was taking it a bit far

 

[Debbie]

I don't understand - the writer describes an ideal scenario, per MB pricing, which is the de facto status quo in SA, and then goes on to argue that once this situation (that we already have) comes about, we'll see cheaper internet access. Huh?

Succinct! Dammit, took me two long posts and not nearly as good your one line!

 

[henkk78]

I don't understand - the writer describes an ideal scenario, per MB pricing, which is the de facto status quo in SA, and then goes on to argue that once this situation (that we already have) comes about, we'll see cheaper internet access. Huh?

Very good point Gatecrasher.

My argument was a rebuttal partly motivated by loads of people asking for flatrate billing & time-billing on our Wi-Fi billing & roaming network. Should have made that clearer...

 

[killadoob]

32$ per gig
check your facts man

aussies dollars maybe hahaha

there is a big difference between broadband and stuff in shops
they actually had to manufacture those items

who manufacters bandwidth?

of course their should be a flat rate

600 rand should include a 4 meg line and atleast 50 gig traffic and uncapped local

then we moving forward

not 4 meg line for 600 plus 90 for your line plus 250 for 3 gig hard cap

or you could use IS
always slow not to good for gaming
and peer to peer

uncapped with no peer to peer hahahaah how stupid

 

[Mux]

Nice replies Debbie2.
The point one normally miss is not to make everthing based on a single user, single unit. Also at the same time not be based on mass users with mass units but broaden the reach by affordability and delivery of rich content.

The shopping example is out of context and extreme. It makes me think of the bloke (will not attach surnames to it anymore) that wanted to buy a featherbed. So he decided to try 1 feather 1st. After his experience, he decided not to buy it. His argument: if 1 feather is so hard, imagibe how hard a million feathers must be!

Cheaper, better, wider usage of broadband will increase jobs and renevue for South Africa.

 

[Myrrdin]

So according to your analogy. If me and my friend walk into Edgars and both want to buy a chino. I walk in grab the first Chino I see, pay and leave so my Chino cost R56.00. He wanders around looking at shoes and some shirts, runs into a friend and has a chat, tries on a couple of chinos and finally decides on the blue one with the pink bells and goes to the counter to pay. His Chino cost R235.00 based on the time spent in the shop which he has to pay to the security guard and the R56.00 to the shop.

This is the premise Telkom wants you to believe in. That the time you spend in the shop/online has a cost involved which is so astronomical as to make spending money online inpractical. Why do you think e-commerce in this country sucks. Because Telkom makes you pay before you have bought anything. When you buy music online there is the cost of the music plus the cost of downloading. When lets say you want to buy an album online from musica and download it so you pay only the royalty fees which amounts to R60.00 (not sure about that exact value) but the data size to download is 700 MB which is a simple calc (rounding Telkom charges to R600.00) 3000 MB / R600.00 gets you to 20c a MB. So now your online purchase costs you R60.00 plus R140.00 in MB costs. I'd rather drive to CNA and buy it for R99.00.

That's why flatrate access with unlimited bandwidth increases business.

 

[henkk78]

32$ per gig
check your facts man

aussies dollars maybe hahaha

thanks killadoob, but I said $36, not $32.

36*7.2 = R259.20 per GB * 3GB = R777.60

Roughly equivalent to 512Kbps line & first 3GB of bandwidth.

 

[henkk78]

Nice replies Debbie2.

ditto! Love to see some good thinking going into this!

The shopping example is out of context and extreme.

Yeah, probably not the best example. A better example might be flatrate petrol. When you get a car, you buy a petrol subscription and you can use all the petrol you want. You have to "sign up" with Shell or BP or Engen.

The petrol stations calculate how much petrol people use on average, price the contract slightly higher, but throw in a free car. You also get locked into a 2 year contract, but the benefit is that the price won't go up in that period.

Now imagine the petrol companies also controlled the roads (Like Telkom controls the lines).

• Very soon you'll see the cars they provide for free become worse and worse.
• The roads will become worse and worse, seeing as they don't really want you to travel.
• They start 'shaping' traffic... putting in deliberate bottlenecks and low speedlimits

Now, imagine you go and propose flatrate petrol to government and oil companies... Hey, perhaps they'll like it. But I really don't think it's the best thing for consumers.

Cheaper, better, wider usage of broadband will increase jobs and renevue for South Africa.

agreed

 

[pip]

To be honest I don't quite get your posts - they seem a bit bizarre. But the last thing we should have is a pay-per-gig type system. In sensible countries ( clearly excluding SA ) backbone bandwidth is purchased by the size of the pipe, not what you put through the pipe. And you have been eating too many froot-loops if you think we are paying $36/Gb - closer to R19/Gb for me, which is still waaaay too much thanks Telkom you bastards.

 

[henkk78]

Pip, I'm pretty sure most people don't pay R19/GB.

From telkomsa.net, I see that a 3GB shaped account now costs R249.00 and a 1mbps line rental is R516. That adds up to R765.

Roughly $36 per GB.

Froot Loops will be welcome though

*update* I previously said 512kbps line & 3GB. I based this on R477 line rental (on my last bill) and R300 for 3GB, both of which have come down slightly.

 

[derekc]

I have nothing against usage based billing but firstly, ISP/Telkom need to offer packages that offer a minimum monthly allowance of say 10-30Gb. Secondly, the usage after the cap must be fairly priced. I would think under R10/Gig is reasonable.

Many argue that countries overseas have uncapped solutions but actually more and more telecoms companies are offering an a monthly allowed usage. This makes sense because it allows ISPs to offer some quality of service. I've heard of many areas in overseas countries where some ppl just download p2p and whilst others using broadband for browsing gets affected.

The biggest point here is pricing. We havent even gotten passed the pricing issue, we shouldn't be discussing whether or not uncapped or usage based broadband billing is better or worse. We should not pay more than R200 for a 384 broadband connection with a 20Gb cap. If telkom offers that and good service then I would be happy.