Telkom may face Competition Commision investigation over uncapped ADSL

system32

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more ISPs need to die. Survival of the first fittest.
Not sure if that's a good thing.
If they all die, then we will be left with TI, and then TI can charge what they want.
Remember those ridiculous TI costs when ADSL first launched in ZA?

I think the ISP's have a legitimate complaint in that Telkom Internet and Telkom Wholesale are one company.
They can squeeze the industry to the ultimate detriment of consumers.
 

ToxicBunny

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Since when did Mweb act in the interest of the consumer?
They have done so once... and only once, with the launch of their original Uncapped products...

They were relatively benign under the reign of Rudi Jansen tbh, but this Derek Hershaw muppet is a right greedy prat it seems. He's from the old Mweb mold if you ask me.
 

MickeyD

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I think the ISP's have a legitimate complaint in that Telkom Internet and Telkom Wholesale are one company.
They can squeeze the industry to the ultimate detriment of consumers.
MWEB and DSTV/Multichoice belong to NASPERS. Do you think it is in NASPER's interest if very low broadband prices (and good network quality!!!) were to lead to more of us streaming our content via Netflix, Hulu, etc. rather than pay R700/m to DSTV?
 

techead

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MWEB and DSTV/Multichoice belong to NASPERS. Do you think it is in NASPER's interest if very low broadband prices (and good network quality!!!) were to lead to more of us streaming our content via Netflix, Hulu, etc. rather than pay R700/m to DSTV?
/close thread
 

Musicmp3

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The other ISP's also then need to come to the party. Dont cry foul is you cant if you cannot compete!!

Everyone bitches about Telkom but when they make an effort, the other ISP's cry like bablies................

Lose lose for Telkom it seems!
 

ranger

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What's the problem here? These ISPs have expressed their concern to the Competition Commission over a price cut that does not entirely make sense to them how Telkom Internet pulled it off, since all of these other companies which are in the same field and should have similar input costs are finding it nonsensical.
The problem IMHO is:
1)Axxess (Afrihost's sister company) announced lower prices for (most of) their uncapped products than Telkom Internet's, *before* Telkom Internet's pricing was announced. If it is so unfair that Telkom had lower prices than MWEB expected, why are they not investigating Axxess?
2)MWEB seems to want to have the lowest price in the market, and they expect Telkom Wholesale to subsidise it. If they think the input costs are too high, why didn't they just match Axxess, instead of under-cutting them?

As far as I can see, the one squeezing MWEB's margins is MWEB.
 

Paul Hjul

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As far as I can see, the one squeezing MWEB's margins is MWEB.
which should be no surprise both because of the nature of Naspers and the fact that if a big squeeze happens MWEB and Telkom are the two to come out alive so a course of action that sees Telkom getting bludgeoned while squeezing out smaller operators is a double win for MWEB

Under Rudi Jansen MWEB had a vision and approach that I would call "big Internet" similar to what Afrihost constantly do and what Telkom is doing at the moment. It is an approach that calls to take low profit margins or even a loss on products designed to drive the adoption of the use of broadband by as large a pool of consumers as possible without tying those customers to your company in the belief that the expanding business ecosystem is to your advantage. I suspect - and there is evidence in media articles - that the case was made on a go big approach with it being anticipated that getting uncapped internet as a norm would drive other Naspers sales operations and effectively content sales would be the big winner; I suspect that it was eventually discovered that same approach presumes Naspers sales channels to be competitive in the Internet environment which is particularly false with respect to DSTV. At the end MWEB falls under DSTV organizationally and it is clear that a triple play objective is what is sought.

My reading of competition law is that such a big Internet approach is not anti-competitive provided it does not operate on a lock-in principle or have as an underlying design the removal of competitors from the market.

However under Hershaw and Theron and with MWEB as a handmaiden to the subscription TV market (which is really quite funny) it the shafting of the consumer and big lie rather than big Internet approach is what we can expect. Hopefully a sufficient body of the public will recognize this and extend an MWEB boycott for the throttling lie to any ISP that advances Hershaw's other big lie.

_____________

BUT so long as Telkom Group fails to make it possible for network operators to build a DSL product base using facilities in the last mile it is impossible to properly discuss the input costs. The fact is that Telkom Wholesale are the only determinant of the bulk of input costs and MWEB cannot be called out on failing to reduce their own input costs because they - despite the ECA and facilities leasing regulations - are not able to build up to the last mile and rent copper.
 

Paul Hjul

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Brilliant insight !! Because in a free market we need a monopoly to fix pricing without any competition !!
A free market is destroyed by violence or fraud
the only fraud is being perpetrated by the lie that forcing Telkom Internet to keep its prices above MWEB is a good thing or that competitors to Telkom should decide what pricing Telkom should adopt.

The market's freedom is restricted in the ECA which makes it possible for MWEB and IS to build their own network. They haven't and they haven't because it is cheaper for them to piggy back off Telkom.
 

km2

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The asked for a look to be had on the 17th - that is fine and well - but when you consider that all of the data is available through the regulatory information reporting it is largely redundant. Add to that the fact that there is a dispute resolution procedure in the settlement agreement (busy trying to get my hands on it) and the threat is not so veiled. TG will shaft TI or Hershaw and the boys will make life difficult, if they go that route whichever ISPs go with it will loose my support.
To me it looks like using their thinly veiled threat they were able to ring out another 10% IPC price cut which will benefit all ISPs, and not just MWEB. Even if I don't care that much about MWEB, I'm glad that they were able to use some leverage on Telkom via the CC to get a price cut that benefits everyone.

And for what its worth it seems the consumer boycott on MWEB for their throttling nonsense has been far more successful than I thought. So I do believe ISPs will think carefully before adopting a course of action that could lead to voting with a wallet.
People boycott MWEB for having a rubbish AUP because it actually impacts themselves. I think you'll find far fewer people who'll boycott MWEB for being mean to Telkom.
 

zamicro

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...The market's freedom is restricted in the ECA which makes it possible for MWEB and IS to build their own network. They haven't and they haven't because it is cheaper for them to piggy back off Telkom.
Unfortunately for us the consumer, this is very true.
 

Paul Hjul

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Nope the 10% IPC reduction is already a component of the settlement

They aren't doing anything to the benefit of anybody. If they want to do something for the benefit of everybody they will put in an offer to contract for 5 years at current monthly spend on IPC in exchange for a 5% capacity increase every 6 months and for there to be a program of expanding the number of ESRs where IPC is provided (reducing the dependence on Telkom for national backhaul). With MWEB on board Telkom Wholesale can plan and provision such an upgrade path and same will be available to all players.

People are boycotting MWEB because they were lied to - hopefully people can see that they are being lied to again. If an ISPs CEO knows the consequence of deception is a consumer backlash of note they will think twice before lying. The fact that you appear to think that MWEB leveraged benefit for everybody means you have fallen for Hershaw's lie.
 

km2

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Nope the 10% IPC reduction is already a component of the settlement
... they formally engaged Telkom and requested a 50% reduction in IPC costs ... Telkom rejected their request ... Eventually the ISPs decided to meet with the Competition Commission ... Telkom has since offered all wholesale customers a further 10% reduction in IPC charges, Hershaw said, which they have decided to accept conditionally ... That condition being that the Competition Commission will still investigate the matter
There was not a hope of the 10% anywhere until they went and ran to the Competition Commission, so you can't say that getting the Competition Commission involved recently didn't do anything useful.

If they want to do something for the benefit of everybody they will put in an offer to contract for 5 years at current monthly spend on IPC in exchange for a 5% capacity increase every 6 months and for there to be a program of expanding the number of ESRs where IPC is provided
So they should support the same terrible tactic that Telkom did before Seacom came online and when they realised that a non-Telkom run cable was inevitable? Try and lock out any potential new players who'd come in via LLU and would be performing an IPConnect type service, by locking all the ISPs onto IPConnect for an extended period.
 

MickeyD

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There was not a hope of the 10% anywhere until they went and ran to the Competition Commission, so you can't say that getting the Competition Commission involved recently didn't do anything useful.
Fact or opinion? So far they have met all the conditions of the CompCom settlement without any prompting from (especially) a competitor.

Coming back to ranger's question... why no CC complaint when axxess dropped their prices to become the cheapest service provider?
 

eyc

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The problem IMHO is:
1)Axxess (Afrihost's sister company) announced lower prices for (most of) their uncapped products than Telkom Internet's, *before* Telkom Internet's pricing was announced. If it is so unfair that Telkom had lower prices than MWEB expected, why are they not investigating Axxess?
2)MWEB seems to want to have the lowest price in the market, and they expect Telkom Wholesale to subsidise it. If they think the input costs are too high, why didn't they just match Axxess, instead of under-cutting them?

As far as I can see, the one squeezing MWEB's margins is MWEB.
biased any ?? As far as I can see Telkom offered another 10% after the other ISP`s approached the Com-commission. That smacks of admitting guilt ? Why now all of a sudden offer another 10% ?
 

eyc

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Fact or opinion? So far they have met all the conditions of the CompCom settlement without any prompting from (especially) a competitor.

Coming back to ranger's question... why no CC complaint when axxess dropped their prices to become the cheapest service provider?
ermmmm - because AXXESS do not sell IPC bandwidth perhaps ??
 

Paul Hjul

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No you are putting the cart before the horse

There was a continuous run of IPC price reductions and capacity increases. Last year TW give a 5% reduction in advance and indicated that a reduction as at 1st February would be forthcoming - part of the settlement on a valid complaint - they've now lobbed those two together for a joint 15%.

You also seem to completely ignore the fact that MWEB is at full liberty to build and use their own network and network products. Their failure to do so makes them dependent on Telkom. A contractual agreement allows everybody to get costings certainty and to expand.

I think there is one implied condition in the settlement that Telkom have not met which concerns the seperation and that condition necessitates making LLU possible (even if not on the terms wanted by the competitors)

There was not a hope of the 10% anywhere until they went and ran to the Competition Commission, so you can't say that getting the Competition Commission involved recently didn't do anything useful.



So they should support the same terrible tactic that Telkom did before Seacom came online and when they realised that a non-Telkom run cable was inevitable? Try and lock out any potential new players who'd come in via LLU and would be performing an IPConnect type service, by locking all the ISPs onto IPConnect for an extended period.
 

MickeyD

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biased any ?? As far as I can see Telkom offered another 10% after the other ISP`s approached the Com-commission. That smacks of admitting guilt ? Why now all of a sudden offer another 10% ?
Ummm... 'cos it forms part of the original settlement?
 

Paul Hjul

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biased any ?? As far as I can see Telkom offered another 10% after the other ISP`s approached the Com-commission. That smacks of admitting guilt ? Why now all of a sudden offer another 10% ?
Nope the the 10% is a lot older than the Comp Comm chat - the amount being published and probably even determined only later. As I understand the undertaking they have to provide a certain amount of million rand price reduction rather than %s

In fact what is clear is that the ISPs were hoping February's cuts would be more than 10% - so if anything Telkom has said up yours to Hershaw, who has been crying about this since October last year.
 
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