More bandwidth for SA

BMI-Tech analyst Brian Nielson told Moneyweb recently he didn’t believe the impact [of VOIP] would be as considerable for South Africa because there first needed to be significant broadband penetration.
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Hmm - me wonders why Telkom is so reluctant to provide affordable internet.
 
Telkom are failing to realize that they can make more money as a broadband provider than they will in the future as a pure PSTN provider. This has been proven in other countries that have liberalised their Telco! British Telecom is a good example, but there are so many others too.
 
yah but they believe teh average joe on the street will not go for broadband.. now consider this, what would you a supplier prefer

1.
selling 2 products one(adsl and voip) of which cuts into the price of the 2nd(pstn) one however the people who can REALLY afford it(and probably use it more) will be using the cost cutting one(adsl) and thus you killing off your own product cause you now have to drop the price of the pstn to make people use it..

2.
cost it such that adsl is more expensive than pstn such that pstn is a more viable option and since it pre-exists no need to spend on it and its just about cheap enough for everyone to use.

i think they'd go for option 2. mass sales and profit is better, sure you have to sell alot more but hey what else are people gonna use esp when cellphone go thru your network too.
 
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The problem with your argument is that markets and technology , specifically DATA and Internet technologies have a way of changing overnight. If Telkom remain the lumbering elephant they are they will only wake up once the technology has come and then gone.

Vodafone (largest Mobile operator in Europe & large shareholder in Telkom SA) have today announced that they do not see a business case in preventing VOIP from being used on their data network (3G). This is a seismic shift and I think will have major ramifications throughout the Mobile world. Users will now be able to use Skype or others freely without worrying about degradation of call quality, on their 3G networks. DATA will now become a commodity and people will be free to use their data as they please.

Vodafone will most likely release their own VOIP product to compete, but their statement today is HUGE!
 
1. Expect VOIP to rule the northern hemisphere soon.

2. Expect all (yes all) Telcos in the 1st world to be IP based data providers allowing the customer to choose what he wants to do with it.

3. Expect the price comparison difference between South Africa and the rest of the world to become even wider! Lower up north and perhaps even higher in SA.

4. Expect Telkom and the SNO (to a lesser degree) to insist on maintaining older and per minute (rather than fixed monthly rate) income generating products. The SNO will even install such (soon to be Internationally declining) services instead of installing modern but lower income generating services.

5. DO NOT expect prices to come down in the medium term unless legislation is adopted to make this possible through proper competition.

6. Expect some sort of coop deal between SNO and Telkom. Most likely through deliberate market segmentation. Yes, this is a common marketing strategy, but remember that competition happens only in ONE segment at a time... Split the segments and there is no competition.
 
Telkom are currently trying to migrate to an IP-based network since they stuffed it up in the 90's... they went for older technologies and now they have to invest in 'modern technology' which was par for the course back then.

The SNO has a comfortable head start in that regard, as they don't have to spend billions on infrastructure - and pay off an old, delapidated legacy POTS system, which Telkom is trying to squeeze the last remnants of revenue out of, i.e. 56k, isdn etc
 
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