Uncapped ADSL: True pricing and service levels

Rpm, does your article suggest that WebAfrica's "it's unsustainable" claim was right all along?
 
Voicy said:
Rpm, does your article suggest that WebAfrica's "it's unsustainable" claim was right all along?
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No. It really aims to explain why many uncapped ADSL users will start to see poor service levels and give a better understanding of the underlying costs of providing an uncapped ADSL solution. One can sell an uncapped service for R50 per month, but then the service levels will just be extremely poor ;)
 
Voicy said:
Rpm, does your article suggest that WebAfrica's "it's unsustainable" claim was right all along?
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I think they were unfairly attacked for this statement, and I guess everyone was being a little overoptimistic about the other offerings out there.
 
WebAfrica were and are wrong about the whole R29/gig model being unsustainable. I don't know if anyone asked for their opinion afterwards when the real unsustainable uncapped model came out.
 
I'm on a 384k line and to be honest, I haven't noticed any slowdown whatsoever. Skype performance to my folks' in KZN has actually got better.

Read into that what you may, but I also don't go crazy downloading crap all the time. What has amazed me is how easy it is to go over 3-5gb without even trying. It's almost halfway through April and I've already steamed past 3gb, without even really doing anything special, no torrents or anything. So nice to just be able to look at a podcast & subscribe without thinking, or clicking half a dozen youtube videos & going to supper.
 
nexxus said:
I'm on a 384k line and to be honest, I haven't noticed any slowdown whatsoever. Skype performance to my folks' in KZN has actually got better.
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An uncapped 384 Kbps service at R200 is actually more sustainable than an uncapped 4 Mbps service at R500. It is also easier to maintain good service levels at 384 Kbps at the current pricing than 4 Mbps. The mathematics is simple: 4 Mbps is over 10 times faster than 384 Kbps, but the price of an uncapped service is only 2.5 times more. Something has got to give.

This is why the article mentioned that 384 users may actually cross subsidize 4 Mbps users.
 
Simple, it is unsustainable for a small niche ISP. The service needs to balance out the heavy users with the light users. If ypu have 1 heavy user for every 5-8 light users you will be fine. Anything more and the service will fall apart.

The problem with the per gig mindset drilled into us is that we consider Internet access as a commodity. You pay for the amount you use. It should be regarded as a service, you can use it s little or as much as you wish. Much like a gym contract/
 
Thanks for the input and feedback rpm. :) Very interesting article.
 
Shayd said:
Simple, it is unsustainable for a small niche ISP. The service needs to balance out the heavy users with the light users. If ypu have 1 heavy user for every 5-8 light users you will be fine. Anything more and the service will fall apart.

The problem with the per gig mindset drilled into us is that we consider Internet access as a commodity. You pay for the amount you use. It should be regarded as a service, you can use it s little or as much as you wish. Much like a gym contract/
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Indeed it's very much like a gym contract. The gym banks on the fact that not all of us will use it at the same time, all the time.

Whenever you go to gym it's pretty full but not packed to the brim. 2hrs later it's the same story, but with completely different customers. Imagine if everyone who had a contract showed up at a gym at the same time.
 
How much does local bandwidth cost the ISP? I'm one of those "pent-up demand" users now gorging and subsequently throttled to horrible speeds (on Afrihost), but to be honest, I wouldn't mind the throttling so much if only *local* bandwidth remained unthrottled ... I can (and do) get most of what I need from other local users, and this surely doesn't cost the ISP nearly as much? (Especially if you transfer from e.g. a user on one ISP to the same ISP, then it's even the same bandwidth 'billed' twice.)

Frankly if e.g. Afrihost could at least leave local bandwidth (relatively) unthrottled I'd be 'happy enough', though I'm curious to know what I'd be costing the ISP. Currently even my local 'stuff' has slowed to a crawl and so I'll probably cancel this and try MWeb next.
 
this article has has some WA spices in it.It was Gian from Afrihost who said in another post that at R29 per gig there were making a fair profit.
 
Sustainable business model: The basic business model for uncapped accounts is simple: high end users who use tens or even hundreds of Gigabytes of data per month are subsidized by low end users who use less than 15 GB per month.
When things don’t work out as expected
In South Africa there is a pent-up demand for broadband bandwidth, and early adopters of uncapped ADSL services are often high end users. This can put strain on the business model of an ISP offering uncapped services, and this is when service levels start to slip.
Unless ISPs continue to allocate adequate bandwidth in line with the demands of their growing user base, subscribers will start to compete for highly contented bandwidth and slow speeds will become commonplace.
At this point ISPs may employ practices like traffic shaping, rolling thresholds and throttling high end users to try to provide an acceptable user experience to the largest portion of their user base.
In some cases an ISP will continue to sign up new subscribers without upgrading their network because of financial constraints, leading to very high contention ratios and hence poor average throughput.
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100%. I pointed that out here as well... actively marketing the account as uncapped in typical SA fashion is not really the way to do it as far as I'm concerned and if anything, could be the very underlying cause for its unsustainability, if it turns out that way in the long run (hopefuly that wont be the case after the web's been "freed" by mweb's fat international pipes ;P) however insignificant it may seem to be...
But if this is true, which I'm sure it is, then the solution is simple: stop offering capped packages altogether - offer a line-speed standard account (not even worth calling it uncapped) and allow the excess from all low-end users to better the overall contention ratio so that GOOD service can be expected by ALL customers regardless of whether they use tens/hundreds of gigs per month, or 1 gig per month. This is probably what Telkom is going to do, and if they go with it, it's going to revolutionize the way ISP's in SA do business.
 
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As long as they efficiently manage the high end users who are abusing the line to download pirated content they should be okay...
 
Why does an ISP pay Telkom for the IPConnect service. I mean that is what the ADSL line rental is for - to provide you the service and path to connect you to your ISP. Clearly Telkom is making money by double charging the consumer and ISP (and telephone line too) - your ADSL line charge is not just to connect you to Telkom.
 
rpm said:
An uncapped 384 Kbps service at R200 is actually more sustainable than an uncapped 4 Mbps service at R500. It is also easier to maintain good service levels at 384 Kbps at the current pricing than 4 Mbps. The mathematics is simple: 4 Mbps is over 10 times faster than 384 Kbps, but the price of an uncapped service is only 2.5 times more. Something has got to give.

This is why the article mentioned that 384 users may actually cross subsidize 4 Mbps users.
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That is a very accurate observation !
 
It's disgusting to think that no matter how revolutionary an ISP can be with their offering, Telkom just sit back and reap the rewards.

Hurry up with LLU already!
 
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MWEB Uncapped 4mb

I have been very happy with MWEB's 4mb uncapped service.

Downloads hardly ever drop under 250KB/s using giganews and 360KB/s using HTTP

So I really cannot complain.

Thumbs up to MWEB for a great product
 
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