The wholesale broadband pricing conundrum

Self provisioning a solution

Considering the high wholesale access costs and potential limitations it is clear why self-provisioning is such an important step to drive down the access pricing of broadband in South Africa.

While Seacom will have a positive impact on the international bandwidth portion of providing a broadband service, this is not a very large component of the cost in the models described in this article, and will therefore not have a massive impact on the total cost of a broadband service.

Self provisioning will however enable ISPs to provide last mile access to consumers using technologies like Wi-Fi or Fibre, bypassing the need to pay high prices to current network operators to carry traffic over their network.
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Well this hopefully where VANS, Dark Fibre Africa and currents ISP's can work together to build "mini-networks" (if you will) to go head to head with the Big4 (Telscum, Neotel, MTN and VC) on a national scale.

I'd think that if companies like Vox, MWEB, Webafrica and Axxess and other players could work together to get bandwidth from Seacom across metros and then scale out to urban and rural areas via fibre and WiMax, having agreements in place to benefit all - we should, in an ideal world, see more competition.

How far-fetched this concept is I don't know, but surely they must be options to consider.
 
While Seacom will have a positive impact on the international bandwidth portion of providing a broadband service, this is not a very large component of the cost in the models described in this article, and will therefore not have a massive impact on the total cost of a broadband service.
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So here is the first excuse for not passing on savings!
 
While Seacom will have a positive impact on the international bandwidth portion of providing a broadband service, this is not a very large component of the cost in the models described in this article, and will therefore not have a massive impact on the total cost of a broadband service.
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That's interesting. All the articles on mybroadband have been claiming that there will be massive reductions with some claiming that costs would fall to 10% of what they are now. Could the journalists not know what they are talking about??
 
once again (still) telkom is to blame.
 
The jornalists are correct. The previous arcticles have been talking about how SEACOM will bring down the cost of BANDWIDTH, there are still other high costs involved, like, line rental, ADSL rental, etc.
For most people, the bandwidth costs aren't the biggest portion of their monthly internet costs.

pkid said:
That's interesting. All the articles on mybroadband have been claiming that there will be massive reductions with some claiming that costs would fall to 10% of what they are now. Could the journalists not know what they are talking about??
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“One of the reasons SA has such a strong and successful ICT industry, is because managed liberalisation has resulted in strong players such as Vodacom, MTN, Telkom and even Cell C, that have created a backbone that makes it possible for smaller players to enter the market,” said Knott-Craig.
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WTHeck?
How on earth does that governmint protected backbone make it possible for smaller players to enter the market?
I think Knott-Craig meant to say IMPOSSIBLE.

Oh right ... that's what the rest of the article says ... :D :o
 
TimTDP said:
So here is the first excuse for not passing on savings!
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It's no excuse, just the bigger picture that needs to be looked at.

pkid said:
That's interesting. All the articles on mybroadband have been claiming that there will be massive reductions with some claiming that costs would fall to 10% of what they are now. Could the journalists not know what they are talking about??
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And those articles would be correct.
Seacom's prices are set to be much lower than that of the SAT3/SAFE regime.
That is on the wholesale level of bandwidth pricing that comes into the country.
Getting that vital bandwidth across the country is still costly.
And with the current infrastructure being dominated by Telkom, it certainly can become a costly affair.
I think comments made at the Mybb conference by the discussion panel really sets in.
When Vox Telco CEO, Doug Reed said that, we should not be expecting drastic decreases in prices, but rather that prices would remain the same, but usage limits would be greater

portcullis said:
Isn't this just another seacom article in disguise?
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Perhaps you should read it again ;)
There's more to this article than Seacom.
 
Nice article ... it's title could have been "The local broadband ripoff".

SAIX :
ISP : 1 GB @ 2Mbps = ~R78 + Other fee's that can double this value.
ISP : 1 GB @ 126Mbps = ~ R21 + Other fee's that can double this value.
SAIX : 1 GB @ 4MBs = ~R12.
But ... telkom are not profiteering and are a social conscious company ... bwaaahahahah

So, are the ISP's forced to over utilise the services they buy, resulting in extremely high contention ratios and a crappy product that is basically only good for browsing?

But .. BRAVO .. Awesome article. Puts things into perspective.
 
TimTDP said:
I remember Neotel once claiming that we should be paying 20% of what we currently pay.
Is this not going to materialise?
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That should still come into effect - lets hope for more than that ;)
They've got their national fibre backbone - they just need Seacom and a proper rollout of base stations to compliment it.
 
portcullis said:
Isn't this just another seacom article in disguise?
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Nope, this highlights the anti-competitive practices in the local peering industry. Self provisioning will definitely help this cause, because local backbone link costs will be reduced or even eliminated.

This is a good article, making the public aware of the abuse of smaller players this specific market. However, it doesn't inform us of the next hurdle to be overcome, viz: "Internet interconnect rates". If they go the same way as cellphone interconnect rates (and lets face it, the same anti-competitive, abusive monopolies are involved), then we're still screwed.

If I, as a small ISP, go to IS, VC, MTN or Telkom with a fibre at their doorstep, what will they charge me to access the sites they host? No onward access, just the sites hosted in their building. If this charge is reasonable (cents per GB) then the consumer will get even more price relief from the Altech case. But if they decide to hinder competition by maintaining artificially high rates, then consumers need to demand more power to ICASA, (or a replacement) and a commitment by the regulator to ensure competition in the face of the default threats and FUD spread by the incumbents.
 
Tns said:
once again (still) telkom is to blame.
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So what you're implying, if I understand correctly is that if Telkom holds the control over local infrastructure besides the international backbone they will inevitably keep us from getting a fair deal in broadband ? even after Seacom has landed..

Perhaps wireless can solve this problem?


Here is an interesting article about copper networks.
 
All the article is confirming is that there is no way in hell that the big guns are going to slice their profits, and pass on any savings to it's customers. The excuses are allready being lined up and neatly loaded, to be fired one after the other as the need arises. When and if SEACOM hit's our shores most of these excuses would have allready been spun, and by the time that cable goes life, I'm guessing we will see maybe a 10% drop in price, as a token. It is not in the tradition of the SA businessman to give, it is only to take. Read carefully what that Knotted man has to say. He stops just short of telling everyone that they are really enjoying ripping-off the SA consumer, and appear to be really proud that they are able to fool us into paying such large amounts for access.

No different from Telkom, and NeoTel will follow suit, I have seen nothing to tell me otherwise.
 
hmmmm.... more excuses to try and convince us, why we are getting shafted. Might as well send me to a african prison... my cell mate will be easier on my ass!
 
Shake&Bake said:
That should still come into effect - lets hope for more than that ;)
They've got their national fibre backbone - they just need Seacom and a proper rollout of base stations to compliment it.
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Why wait for Seacom? If Neotel really wanted to they could open their current national network to smaller players.

O wait, they want to charge the same prices as telscum for their IP Connect service.

Like I said a while ago, they used the SAT3 pricing to justify their prices. Now that articles about Seacom pop up every other day they need to find a new reason why we should pay those prices. I really wonder what would be the next reason for the high prices? (once abundant local networks become available)

Bring on the vasaline boys, now we have four buddies to share our backsides with (telscum, neotel, vodacom, mtn) :sick:
 
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