The one thing which keeps capped ADSL prices low

[Kevin Lancaster]

The one thing which keeps capped ADSL prices low

Many Internet service providers sell their capped ADSL products at cost, and trust on breakage to make a profit.

 

[LazyLion]

lol, what does this say about Telkom?

 

[Valhallan]

With that business model the more downtime they have the better their profits are.

And so too the more they shape our connections on there "Unshaped" accounts. pffff Good old capitalism

 

[siraman]

Well,well,well...My ISP's have certainly gotten a lot of breakage from me and all thanks to Telkom's network outages in my area.

 

[whatwhat]

When you look at OpenWeb, their breakage is double every one else's due to them having users share accounts.

#1122

 

[Bryn]

This sounds like something DJ could add valuable insight into. I wonder how CW's breakage considerations line up with those in the article, and if he knows how in the world Afrihost make any money with some of their prices.

Is it just insanely high breakage? My 400GB account costs R498pm. Even without factoring in the cost of the Simfy account, 500MB mobile data, complimentary news server, one month data rollover and uncapped data from 23:30 to 7:30, that comes to R1.245 per gig.

Maybe it's just how sophisticated the ISP's systems are, and how well they can distribute limited bandwidth in such a manner that they appear less limited. Or maybe they just accept that no money can be made in certain price brackets, and the struggle is just to break even and hope that some users take out additional profit-making services.

When you look at OpenWeb, their breakage is double every one else's due to them having users share accounts.

#1122

All the capped accounts I've come across allow a bunch of simultaneous connections though. Why would Openweb suffer more than other ISPs?

 

[DJ...]

I can't speak for Afrihost.

I can say we all pay the same or similar rates for IPC and internet bandwidth, so the only way to get pricing below cost, is to contend it...

 

[MickZA]

Strange costing model, don't think I've had a clients ADSL go down for any length of time due to Telkom infrastructure since last year and we use several ISPs - OpenWeb's not one of them though.

 

[SlinkyMike]

In some ways it is analogous to the Multichoice situation where everyone pays for sports channels but not everyone watches them.