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Internet service providers buy bandwidth on Telkom’s last-mile copper network for DSL services through a product called IP Connect (IPC), which is set to see a reduction of between 1.4% and 63%.
The size of the reduction is determined by the volume of bandwidth a service provider buys from Telkom, with smaller ISPs set to benefit more than larger competitors from the next round of price cuts.
Telkom said the promotion will allow ISPs to double the amount of IPC bandwidth they have “for an incremental cost.” Asked what the effect of this promotion might be for larger players in the market, Telkom said companies with large volumes of IPC could effectively lower their cost per Megabit per second by 80%, after all reductions were taken into account.
Trying to work out where the savings are happening here. Initially it looked like they're adjusting the bulk discount to make buying smaller chunks of IPC have a price per Mbps more in line with the larger players.
I'm not sure what the curve is there, but it sure sounds like major ISPs with large connections are going to see a smaller reduction.
But then it says
Now how do you get to an effective cost per Megabit reduction of 80% after applying an incremental cost. That would need it to be very very small cost, and then give the big boys that 63% reduction and then a further 50% reduction. Or are they saying that just the "doubled IPC" will work out to be effectively 80% less than buying more at current rates.
I think that is the promotion that they have from May to July. After that it will benefit the smaller ISP's as stated.
That sounds decidedly anti-competitive to me...Asked what the effect of this promotion might be for larger players in the market, Telkom said companies with large volumes of IPC could effectively lower their cost per Megabit per second by 80%, after all reductions were taken into account.
is this not a direct consequence of their settlement with the competition commission
rather than a damascene commitment to the democritisation of data
That sounds decidedly anti-competitive to me...
Favours the bigger players (like *cough* TelkomInternet) and puts the borderline small player at a disadvantage.
Or am I missing something here?