Telkom cost comparison

[kaspaas]

Hi,

There was quite a bit of talk on why Telkom should be allowed to be highway robbers in their rate structures.

Telkom ADSL has two cost components:

The copperwire from the exchange and associated hardware in the exchange

Actual Bandwidth


I believe there are regulatory issues why these two components must be seperated.

Telkom charges R680 (R800 for businesses) per month for the copper&hardware. This excludes any bandwidth charges as this is sold seperately.

Several ISP's resell ADSL bandwidth. Telkom charges R219 for this (Prolog)

This R219 covers the total bandwidth cost. All local bandwidth, and all International bandwidth. Compared with bandwidth charges in eg Germany it is reasonable considering the cost of the international link as well as the low population density in South Africa compared with the rest of the world. Statements on the amount of "spare" bandwidth elsewhere in the world as reason for the "cheap" ADSL there does not hold. Telkom ADSL is not that expensive on the bandwidth cost side.

The big problem with the cost of Telkom ADSL is not bandwidth related. It is the cost of the copperwire& exchange hardware. I know that in Germany one is also charged separately for line & bandwidth as here. But the German telco only charges E20 (around R160) per month for the "hardware" part of the ADSL service.

We are talking of the same equipment cost in both countries. Same manpower cost etc.

Telkom charges more than 3 times for the same service than their German "competitors".

So there is no reason at all for Telkom to charge what they are charging on the hardware side - except abusing their position as effectively the sole supplier of copperwire on "last mile" circuits.

I'm looking forward to real competition on internet connectivity in SA.

I firmly believe that the present internet connectivity needs of most users is not broadband or some high tech solution with expensive hardware. I believe that a reasonable charge bundle for all calls to an ISP dialup number (eg R100 per month for all the calls you make to M-Web or SAIX dialup) will satisfy the connectivity needs of most people in the country. If Telkom launched a product like this, there would be much less demand for 24/7 products like ADSL and Sentech My Wireless.

It would allow users to gradually outgrow the capabilities fo their trusted 56k modems and switch to faster products.


South Africa needs World Class Broadband at World Competitive Prices.

 

[stevedavies]

Hi,

I posted elsewhere and I might have read as on their side. But I quite agree with you - the way they've split their price between access and Internet in no way reflects their costs. It is clearly intended simply to keep out competition.

Steve

 

[Pavlov]

I returned to South Africa having been part of the brain drain for a couple of years while I attempted to internationalize my CV a little.

I spent 2 years in the UK and 2 Years in the Netherlands. I subscribed to Cable Internet Services in both countries.

I have put together information of the cost of internet access services (kilo-bits per second) as a percentage of average salaries for a person in my position, assuming of course that the average remuneration is reflective of skill set.

UK 512= 0.5% 1024=0.7% 2048=1%
Netherlands 512=0.8% 768=0.9% 1500=1.4% 3000=2.3%
ZA (Telkom) 512=4.5%
ZA (MyWireless) 128=3.8% 256=5% 512=8.5%

Now I know there are a range of arguments as to why pricing is so different in South Africa vs Europe. The point I am trying to achieve is that the cost of a mediam to compete at a skill-set level is at least (3-8) times our European counterparts.

I wonder if Telkom/Sentech has thought of introducing student type rates to assist students and enterants into the IT profession compete more affordably.

Sure there are a range of possible arguments against, however the 'stats' ask interesting questions. Are there really enough circumstances in South Africa to argue for a minimum of 3 times the cost for the same bandwidth?

Can we really wonder why IT professionals consider the airport queue marked "South African Brainpower exit here"!?

I wonder when the government will realise that the abnormal profits being returned to government as a result of Telkom shares pales when compared to what it costs the country in reduced comparative advantage in associated industries (IT, Convergence, etc), the jobs that can be created, the associated increased spend and yes the taxation levied?

 

[fusion01]

In the area that I lived in the west of London, Telewest Cable (cable, not ADSL) have launched a 2mb (19sec to dl 5mb) data transfer package for 50 GBP per month, no limits. I earned 25 GBP when working in internet production --- 2 hours work. Nice. I must get out now and soak some sun, sun, sun 'cos otherwise I begin to doubt!

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