davemc
Executive Member
Notice how there is zero mention of this Telkom invention, called a "cap", in that entire article.
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SEACOM pricing – how much does it really cost
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Am I confused? How can it cost so much to get the data from the Seacom landing site to me when local bandwidth has histroically been so cheap? Surely it should be local bandwidth cost + seacom international cost? Why just because the data is coming from overseas does it cost so much to pass around nationally?
I might be completely missing the point though...
I might be completely missing the point though...
gregmcc
Honorary Master
I must be living in a different country to Suveer! I haven't seen ANY cost reductions let alone "significant price cuts"
guest2013-1
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I must be living in a different country to Suveer! I haven't seen ANY cost reductions let alone "significant price cuts"
Exactly what I have been saying the last month or so AND EVERYONE IGNORING ME!!!!
Telkom cut it's pricing for wholesale bandwidth to be in direct competition with Seacom (it's pricing is equal to that of Seacom) and was cut back in April if my information is correct.
This means EVERYONE should have seen some form of saving in bandwidth we pay, but we haven't!!!! ISP's have been raping us (yes, I just used that word!) for the last couple of months with a big fat one and we don't care.... or have cared to listen to Oom AcidRaZor when he mentioned this in several other threads!
So let's see:
A STM-1 (155Mbps) on a 1 year lease:
R737 446...... SEACOM Price
R12 000........ Cross connect fee
R9 000.......... Rack space
R755 000....... Local transit
R15 662........ London transit
Total R1 529 108 per month for a 155Mbps pipe to London.
Or R10 195 per Mbps per month. (With 150Mbps usable bandwidth)
1Mbps = 331 GB per month
So R10 195 / 331GB = R30.80 per GB
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If the ISP buys an STM-1 IRU instead of leasing the capacity, then the cost is roughly R969 000 per month or R6462 per Mbps per month = R19.50/GB
A STM-1 (155Mbps) on a 1 year lease:
R737 446...... SEACOM Price
R12 000........ Cross connect fee
R9 000.......... Rack space
R755 000....... Local transit
R15 662........ London transit
Total R1 529 108 per month for a 155Mbps pipe to London.
Or R10 195 per Mbps per month. (With 150Mbps usable bandwidth)
1Mbps = 331 GB per month
So R10 195 / 331GB = R30.80 per GB
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If the ISP buys an STM-1 IRU instead of leasing the capacity, then the cost is roughly R969 000 per month or R6462 per Mbps per month = R19.50/GB
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guest2013-1
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And then that is 1:1 contention ratio...
*edit*
BTW, its more like 253 GB per 1 Mbps if you consider the 80% rule when it comes to max speed
Working on your 150Mbps and the 80% rule on a 30 day period you'll get +- 37968.75 GB downloaded. Which is roughly around R40 per GB on a 1:1 contention ratio
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Thanks now it makes more sens
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With the per Mbps SEACOM pricing you should still incorporate local bandwidth (at R 5000 per Mbps per month according to some sources) and IP Connect in the case of ADSL. The per GB cost then typically exceeds R 50.
No offence to you Gaz{M}, but this sounds too good to be true, anybody else care to just confirm the numbers. Very nice to see the costs broken down to a very simple and understandable format.
If this "ABC for tiny tots" analysis is correct...ISP's are adding quite a large profit margin as we haven't seen any real price reductions.
Those were pretty accurate, real world figures.
The point is, SEACOM is less than 50% of the total cost of delivering a GB of data to your ADSL line. We need to reduce that other 50% drastically before meaningful price reductions can happen.
The point is, SEACOM is less than 50% of the total cost of delivering a GB of data to your ADSL line. We need to reduce that other 50% drastically before meaningful price reductions can happen.
guest2013-1
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They seem to be thriving quite well with current pricing my friend. And if you notice some even only have a measly 5% markup on some pricing? The norm being 10-15% markup.
Where they make their money is how they pay for bandwidth...
When an ISP sells you a 3gb account they don't pay for the entire 3gb to Telkom, only the portion you use.
So if you have 100 clients who bought a 3gb account. And 50 of those only use 2gb for the month. They pay for only 250 gig instead of the 300 gig.
Let's assume Telkom charges the ISP R59.50 per gig and the ISP has a 15% markup on that price bringing it to R70 per gig (prepaid value of course, the percentage markup goes down slightly if you pay for 3gig account. but only by a few %)
The ISP, in above scenario, would sell 300 Gigs of bandwidth:
Total Profit: R3150 per 100 accounts
If the ISP's users used their bandwidth in above scenario:
Total Profit: R6650 per 100 accounts (more than double)
That sure does pay for a few staff and premises don't you think?
And trust me, I've resold bandwidth to clients of mine before, most on 10 gig accounts doesn't even use 2gb. That's a lot of profit in the end... especially if ISP's boast of having 100 000+ ADSL accounts. You start to make money on reselling hosting/emailing services etc etc as well...So by lowering bandwidth costs and saying it's Rx per month doesn't mean they will stop being profitable...
Roman4604
Executive Member
But thats not what's being discussed here, your point around oversell applies whether your use SAT3 or Seacom.
I was merely point out that the (Seacom based) GB cost calculations are not accurate as they don't include standard business operating overheads.
Roman, you are correct, but I think the point of the calculations was to show some forumites that the raw cost is closer to R30/GB with SEACOM before any operational or business costs. This is to prove once again that SEACOM is a minor factor in the broadband cost calculation and certainly not the saviour it has been hyped up to be. Even more so now that SAT3 costs the same.
wirelessvsadsl
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Seacom Pricing
All the pricing makes me laugh if you think that its going to cost R300 - R700 per meg
In the real world it will be $ 500 - $ 900 and that is the fact i have the figures in front of me
Its easy to calculate the cable at 0 profit margin for 20 years but there is so much to be added on operating costs , termination , financial commitments to the bank @ 15 % , return on investment , equipment etc etc etc
For the real costing you need to look at the whole picture not just the pretty picture
I feel sorry for all the SA people getting false hopes of major reduction but unfortunately until the local loops come down to UK / USA pricing you are stuck with getting ripped
All the pricing makes me laugh if you think that its going to cost R300 - R700 per meg
In the real world it will be $ 500 - $ 900 and that is the fact i have the figures in front of me
Its easy to calculate the cable at 0 profit margin for 20 years but there is so much to be added on operating costs , termination , financial commitments to the bank @ 15 % , return on investment , equipment etc etc etc
For the real costing you need to look at the whole picture not just the pretty picture
I feel sorry for all the SA people getting false hopes of major reduction but unfortunately until the local loops come down to UK / USA pricing you are stuck with getting ripped
But, for example, Neotel offer an Uncapped >1Mbps for R999. Based on your calculations they would be making a loss. Am I missing something?
you contention ratio is proball somthing like 20:1
First I wanna say thanks to Mybroadband for finally publishing a full price analysis (and kudos to Laurie from Cybersmart who published most of those figures on a forum post a coupla weeks ago already).
And thanks to Seacom for being open with your pricing.
Gaz, I understand what you're saying, we have pricing bottle necks with the local loop etc, which prevent us getting really cheap internet.
However, bandwidth costs do make up a bigger portion of your total bill as your cap increases. So, for example, if you're on a 5GB or 10GB cap, then even maybe a 15% price decrease is quite significant.
And looking at the numbers (and this has been confirmed elsewhere on the forums), we should be getting between 20% and 30% off our current per GB bandwidth costs. Which would enable me to increase my cap from 5GB to 7GB, for pretty much the same price. Which is a start, at least.
