Wholesale wireless broadband network for SA?

[InTheCube]

Why are you not the first person to compare data with Natural resources **snip** Please don't even use the Data = Resources analogy again.

Jannie was not referring to data, but rather radio spectrum, which IS a natural resource, and IS in limited supply.

 

[Pitbull]

Jannie was not referring to data, but rather radio spectrum, which IS a natural resource, and IS in limited supply.

I misunderstood it then. I apologize

 

[jannievanzyl]

...snip...

I'd go with the plan proposed by VodaCon.

...snip...

I'd also go with VodaCon's proposal, as it makes the most sense, and is the most cost effective.

...snip...

So, it's actually a good plan but because Vodacom suggested it, there must be a catch?

If MWEB / Cell C / someone else suggested it, it would be all good?

 

[InTheCube]

So, it's actually a good plan but because Vodacom suggested it, there must be a catch?

If MWEB / Cell C / someone else suggested it, it would be all good?

Yes sir. Spot on.

Because MWEB have been fighting for the consumer, and INTRODUCED more competition, and revolutionised the ADSL market. Cell C have been fighting for the consumer, and INTRODUCED more competition, and revolutionised the mobile broadband market. Please tell me what VodaCon has done for the consumer? Nothing. Instead, they have been a big bully, and have been fighting to SUPPRESS competition, and only reduced pricing when forced. VodaCon have only been throwing their lawyers at ICASA, the DoC, and smaller players, whenever they tried to introduce competition. Please try to deny this, and I will provide you with proof.

So forgive me for being skeptical about VodaCon's proposal to introduce competition and service the rural/poorer areas. There is definitely a catch to it, which serves VodaCon's interests very well, well enough to make VodaCon publicly make such statements, which they would have never done in the past, and would have in fact thrown their lawyers at in order to suppress such proposals.

You have plainly refused to debate/answer/address any of the other points/questions I have made. Why? Why only quote the points I agreed with you on?

Awaiting your response....

 

[jannievanzyl]

Yes sir. Spot on.

Because MWEB have been fighting for the consumer, and INTRODUCED more competition, and revolutionised the ADSL market. Cell C have been fighting for the consumer, and INTRODUCED more competition, and revolutionised the mobile broadband market. Please tell me what VodaCon has done for the consumer? Nothing. Instead, they have been a big bully, and have been fighting to SUPPRESS competition, and only reduced pricing when forced. VodaCon have only been throwing their lawyers at ICASA, the DoC, and smaller players, whenever they tried to introduce competition. Please try to deny this, and I will provide you with proof.

So forgive me for being skeptical about VodaCon's proposal to introduce competition and service the rural/poorer areas. There is definitely a catch to it, which serves VodaCon's interests very well, well enough to make VodaCon publicly make such statements, which they would have never done in the past, and would have in fact thrown their lawyers at in order to suppress such proposals.

You have plainly refused to debate/answer/address any of the other points/questions I have made. Why? Why only quote the points I agreed with you on?

Awaiting your response....

I always love it when, if I don't respond to a post within 20 milliseconds, the conspiracy theories come out.

It's a long post and I'll read it carefully first. You know I have no problem debating any point, especially if we keep emotion out of it. (that's a hint, btw. )

OK, read it, but not much to respond to. You basically just say it's a good idea but you don't trust Vodacom's intentions. I get that, but it also means nothing I can say will change your mind. I also get that a company is only as good as it last price cut but you clearly have a short memory on the history of mobile broadband in South Africa.

You're wrong on a couple of points though, for example who's got the more modern network. Oh, and that prices have gone up. Time to dig out that calculator. Or you could just look at the table myBB published.

But give us your views on how you would allocate the spectrum given the fact that there is space for maybe 4 operators but 400 who wants it. How will you ensure we don't have another Sentech (who never did anything with it) or WBS (who got too little to do anything properly) situation.

Let's hear your master plan.

PS. I'll be away from my desk for the next 3 hours or so, so please forgive me for not responding within your required nano-second response time, if and when you decide to post a reply.

 

[InTheCube]

I always love it when, if I don't respond to a post within 20 milliseconds, the conspiracy theories come out. :rolleyes

No need for sarcasm. I didn't expect you to respond instantly, and didn't ask you to, but when you did respond you failed to address my entire argument. There were no (additional) conspiracy theories thrown in because you didn't respond. Stop deflecting from the main argument.

OK, read it, but not much to respond to. You basically just say it's a good idea but you don't trust Vodacom's intentions. I get that, but it also means nothing I can say will change your mind.

Agreed.

I also get that a company is only as good as it last price cut but you clearly have a short memory on the history of mobile broadband in South Africa.

That's where you are wrong. A company is only as good as the quality of customer service it renders, the stability & reliability & coverage (for broadband/telecoms companies), the pricing and the general attitude of the company and management. For us MyBB'ers, its also a bit more than that, but we can safely ignore it for this discussion. Now all of this is reflected in what consumers think of it. And if you read around these forums (which you obviously do) and speak to Joe Average in the streets, you'll know exactly what people think of VodaCrap. Cell C was disliked by many before, due to it's poor service levels. Many (like me) were indifferent, due their lack of 3G, and so didn't even bother. They've since changed, rebranded and launched new affordable services, and people love them. When Neotel launched new services, they were the cheapest around, with pricing at 8c per MB flat, yet they failed to gain traction or support, due to their terrible service and attitude. Price is not everything. Everyone was clamouring for Neotel to succeed. They had everything going for them, but they screwed it up royally. Yesterday Neotel slashed prices again, but this will not change the perception of the company, not any time soon. I still wouldn't touch their services, not even with a 10 foot pole. So no, a company is not as good as its last price cut.

Most importantly though, if you want to know how good a company is, you compare it to its competition. And this is where VodaCrap fails big time. A multi-billion dollar profit posting company with operations in several countries, the biggest operator in the country, being shown the way by:
- a loss-making operator, the smallest in the country for almost 10 years, with operations only in 1 country
- a young new entrant, launched by the much hated and loathed incumbent fixed line operator

But give us your views on how you would allocate the spectrum given the fact that there is space for maybe 4 operators but 400 who wants it. How will you ensure we don't have another Sentech (who never did anything with it) or WBS (who got too little to do anything properly) situation. Let's hear your master plan.

I never claimed to have a master plan, or even a plan for this. I just have serious doubts about Vodacom's intentions, and for good reason. And in any case, whatever plan anybody has, no matter how good it is, we have ICASA and the DoC who are sure to stuff it up royally given the slightest opportunity (of which they have countless). Nevertheless, I'll give it a go:

If we have space for 4 operators, auction (beauty contest) 2 spaces off to companies who meet the following conditions:
- must be an established telecoms operator with business and consumer services and more than 5 million customers (i.e. must be one of the big 4 - Telkom, MTN, Vodacom, Cell C)
- must demonstrate that hey have the funds, skills and resources to roll out a network and provide services
- must prepare for their last mile network to be opened up to competition within 3 years time (wireless LLU), at reasonable costs
- must pay a reasonable license fee (R600m)

Auction (beauty contest) the other 2 spaces off to new competitors, who must meet the following conditions:
- must have the valid licenses
- must be an established telecoms/broadband operator with business and consumer services, and more than 100,000 customers (i.e. companies like Altech, Nashua, MWEB, Vox, IS, iBurst)
- must prepare for their last mile network to be opened up to competition within 10 years time (wireless LLU), at reasonable costs
- R100m license fee

The under-serviced areas in the country should then be broken up into districts, and divided equally among the 4 operators, and each operator must provide services in the areas allocated to it, using the digital dividend spectrum. Pricing conditions must be set (prices must be market-related, i.e. the same pricing set in urban areas by the respective operators)

The license fees paid by the operators must be used to subsidise infrastructure deployment in the underserviced areas. This infrastructure should be owned and maintained by a (I hate to say this) SOE like Infraco. The infrastructure should be available for use by all licensed operators, on a fair and open basis, at a reasonable cost.

Now, even if the above COULD work, and was accepted by industry (fat chance of that), ICASA and the DoC would either take forever to implement it (plans upon plans, meetings upon meetings, discussions upon discussions), at which stage LTE would go the way of Wimax.

So yes, we're all stuck between a rock and a hard place, because our regulator has no teeth. In part, I blame VodaCrap, eMpTyN and Telskum for this situation, by refusing to play fair, throwing lawyers at everything, refusing to let the regulator regulate, and poaching much needed telecoms skills and talent from them, and doing nothing to support the struggling regulator. For this, we will all suffer, including ironically these same operators. The biggest blame though goes to government, for not giving a crap, and worrying only about lining their own pockets.

PS. I'll be away from my desk for the next 3 hours or so, so please forgive me for not responding within your required nano-second response time, if and when you decide to post a reply.

Your sarcasm is really in poor taste. As a long time poster on MyBB, and a level-headed geek, I don't expect you to respond instantly. I know how forums work. But when you do respond, don't ignore the entire argument.

 

[Hummercellc]

Shame Jannie you getting flamed from all angel's! Well to be honest Vodacon is the big sinking red ship and you work for them so it would be natural to defend them, but Vodacon don't care about there customers! I have had so many problems with Vodacon, switched to Cell C and been happy ever since.

 

[jannievanzyl]

Most importantly though, if you want to know how good a company is, you compare it to its competition. And this is where VodaCrap fails big time. A multi-billion dollar profit posting company with operations in several countries, the biggest operator in the country, being shown the way by:
- a loss-making operator, the smallest in the country for almost 10 years, with operations only in 1 country
- a young new entrant, launched by the much hated and loathed incumbent fixed line operator

A topic for another thread but the dynamics are substantially different, especially when you're trying to break into a new market and are willing to sell below cost to do so. I get it consumers only care for the lowest price though.

If we have space for 4 operators, auction (beauty contest) 2 spaces off to companies who meet the following conditions:
- must be an established telecoms operator with business and consumer services and more than 5 million customers (i.e. must be one of the big 4 - Telkom, MTN, Vodacom, Cell C)
- must demonstrate that hey have the funds, skills and resources to roll out a network and provide services
- must prepare for their last mile network to be opened up to competition within 3 years time (wireless LLU), at reasonable costs
- must pay a reasonable license fee (R600m)

Auction (beauty contest) the other 2 spaces off to new competitors, who must meet the following conditions:
- must have the valid licenses
- must be an established telecoms/broadband operator with business and consumer services, and more than 100,000 customers (i.e. companies like Altech, Nashua, MWEB, Vox, IS, iBurst)
- must prepare for their last mile network to be opened up to competition within 10 years time (wireless LLU), at reasonable costs
- R100m license fee

The under-serviced areas in the country should then be broken up into districts, and divided equally among the 4 operators, and each operator must provide services in the areas allocated to it, using the digital dividend spectrum. Pricing conditions must be set (prices must be market-related, i.e. the same pricing set in urban areas by the respective operators)

The license fees paid by the operators must be used to subsidise infrastructure deployment in the underserviced areas. This infrastructure should be owned and maintained by a (I hate to say this) SOE like Infraco. The infrastructure should be available for use by all licensed operators, on a fair and open basis, at a reasonable cost.

You won't find me disagreeing with this.

Side note: An auction and beauty contest are two different processes.

Now, even if the above COULD work, and was accepted by industry (fat chance of that), ICASA and the DoC would either take forever to implement it (plans upon plans, meetings upon meetings, discussions upon discussions), at which stage LTE would go the way of Wimax.

But they probably will, thus the alternatives as suggested by Pieter.

Your sarcasm is really in poor taste. As a long time poster on MyBB, and a level-headed geek, I don't expect you to respond instantly. I know how forums work. But when you do respond, don't ignore the entire argument.

Maybe, and if the shoe does not fit, my apologies. But I do get it a lot, being attacked for not answering instantaneously and it is then seen as a tacit acknowledgment that the poster was correct.

 

[Reelix]

Well, Vodacom DOES seem to have the best signal....

If all towers were owned by everyone, so you got the exact same signal, irrespective of your cellar provider, then they could stop the annoying tower fight. A single tower upgrade would benefit all the companies, as well as us lowly consumers. This will make operation costs cheaper for everyone (Well, the companies at least), and us consumers could go with whoever we think is best for us, and not "Oh, I won't go with X and Y, because the signal is crappy in my area!"

 

[InTheCube]

A topic for another thread but the dynamics are substantially different, especially when you're trying to break into a new market and are willing to sell below cost to do so. I get it consumers only care for the lowest price though.

8.ta have stated that 10c per MB is sustainable, and is as low as they can go before incurring losses. Now any broadband provider, especially a private company, would be foolish to reveal their true cost, so I speculate that 8.ta's true cost is even lower then this. Now Cell C's promo prepaid pricing of R149 for 2GB equates to 7.5c per MB. My guess is that this price is probably much closer to the true cost. In any case, perhaps Cell C and 8.ta have lower costs for being more efficient, and being able to leapfrog older technologies. Vodacom's lowest prepaid pricing is now 17c per MB, close to double the true cost. By prepaid I am referring to true prepaid, where you can't be eaten by the OOB shark.

Perhaps all the above is just speculation, but when you look at the billions of rands of profit that Vodacom have posted and are STILL posting (even after interconnect rates dropped, which Vodacom fought tooth and nail against), it makes one wonder. We, the South African consumers, have paid for Vodacom's expansion into 5 African countries, while still posting huge profits, but giving the us consumer very little in return. It is a well know fact that South Africa has some of the highest cellphone charges in the world, for both voice and data. Vodacom used to be world leaders with mobile data pricing, but that title has long fallen away and Vodacom are now much closer to the bottom of the list.

In any case, to wrap up, I guess we'll just agree to disagree.

 

[Bern]

@ Jannie, perhaps what could help is some insight from yourself on the digital divident - if we were to go the way of a shared infrastructure what would the likely scenarios be for:

1. likely technology(ies) to be used
2. Upgrade path(s)
3. The likely spectrum allocation
4. with likely technology what is the true total throughput for the spectrum (or unit of spectrum)
5. how would a decision on two competing technologies be handled? Frequency split?
6. If two operators have a large number of customers trying to connect causing degradation of the service how will this be handled?

 

[jannievanzyl]

8.ta have stated that 10c per MB is sustainable, and is as low as they can go before incurring losses.

Can you point to this statement? I'd like to see it. (I've personally heard them say the opposite.)

Perhaps all the above is just speculation, but when you look at the billions of rands of profit that Vodacom have posted and are STILL posting (even after interconnect rates dropped, which Vodacom fought tooth and nail against),

Just a note on this. Vodacom incurred substantial losses due to the drop in interconnect. Check the financials. Remember, Vodacom was a nett receiver of interconnect, so while the smaller guys scored, the biggest would loose out. Why do you think it was the smaller guys fighting for a drop in interconnect? For sure not to pass any savings on. (Although Neotel did, I think. Can't remember Cell C doing so, but I could be wrong.)

In theory Vodacom should have increased call rates to compensate for interconnect, but that would've gone down like a Lead Zeppelin (now you know where the band got their name from - they though their style would go down like a 'Led Zeppelin').

In any case, to wrap up, I guess we'll just agree to disagree.

That's cool, as long as we stick to the facts in our debates.

 

[jannievanzyl]

@ Jannie, perhaps what could help is some insight from yourself on the digital divident - if we were to go the way of a shared infrastructure what would the likely scenarios be for:

1. likely technology(ies) to be used
2. Upgrade path(s)
3. The likely spectrum allocation
4. with likely technology what is the true total throughput for the spectrum (or unit of spectrum)
5. how would a decision on two competing technologies be handled? Frequency split?
6. If two operators have a large number of customers trying to connect causing degradation of the service how will this be handled?

Disclaimer: Short answer due to time constraints.

It would definitely be LTE or LTE-Advanced, so that would answer most of your questions above. For the foreseeable future WiMax is dead, at least till WirelessMAN-Advanced (the 'proper 4G' version of WiMax) come along in a year or 3. Which is probably sooner than getting the politics of such a shared network sorted out.

 

[DXL]

100% on this one ToxiC

I'd go with the plan proposed by VodaCon. But as explained earlier, VodaCon's reasons are not because they wish to share this scarce resource with others. IIRC, ICASA have been talking about giving the much wanted digital dividend spectrum to new players like MWEB, IS, Altech and Naspers. VodaCon are scared of this (and rightfully so), and that's why they are pushing for open access to all. Rather share it with everyone (and come up with other strategies to muscle out the newer, smaller guys), then have nothing at all and worse still, have to compete against it.

The answer for Vodacons proposal is listed above and correctly so.

Toxic your Posts are very interesting !

You are more than Welcome to join the ICT-Freedom Fighters

I must say their is alot of facts and truth in your posts on this Topic.

DXL - Team

ICT- Freedom Fighters Since 1998

 

[DXL]

Att Jannie :

Why does Vodacom charge such high Tariffs on Voice Calls when in India voice calls are charged at less than 10c per minute against R2.50 per minute.
SMS charges in SA are at almost 80c per SMS. Why is this so yet again in India SMS is charged at 5c per SMS.
People in India have no use for SMS when Voice calls are so cheap.
Every single recharge gives you FREE sms's in India.
Vodacom has 12.5mhz in the 900mhz Band yet we have such high tariffs.
Vodacom could have taken a position to lower on-net calls to 50c per minute and make handsome profit.
Hopefully all goes well for Vodacom.
Maybe Vodacom should consider increasing their Tariffs.
How is it possible that Vodacom has the highest data tariffs ?
Why was push to talk kept away from prepaid Subscribers.

DXL - Team

 

[InTheCube]

Can you point to this statement? I'd like to see it. (I've personally heard them say the opposite.)

Here it comes:

Zoltan Miklos, executive for converged data networks at Telkom Mobile (8ta), said that 3c to 5c per megabyte (MB) is simply not sustainable for 8ta, adding that the floor for sustainable mobile broadband pricing is about 10c per MB.

Gooi tamatie-sous: http://mybroadband.co.za/news/telec...s-subsidise-data-losses-alan-knott-craig.html

Just a note on this. Vodacom incurred substantial losses due to the drop in interconnect. Check the financials

Yet they still managed to post a huge profit. Check the financials. Agh nevermind, I know you are time-constrained, so I'll point it out to you:

Vodacom today (16 May 2011) released their latest financial results, showing a 28% increase in year-on-year profits

Vodacom today (16 May 2011) announced their financial results for the year ending March 2011, increasing revenue by 6.4% to R54.052 billion, and growing their customer base to 43.5 million.

Vodacom South Africa also delivered a robust performance with service revenue growing 4.7% to R46.392 billion. This was achieved despite a 16.3% decline in interconnect revenue following the cuts in mobile termination rates (‘MTRs’).

According to Vodacom, its service revenue growth was supported by a higher contribution from data revenue and increased voice usage stemming from value offerings.

Data revenue increased 33.9% to R6.180 billion due to increased penetration of mobile PC connectivity and mobile internet usage, with active data bundle users increasing 76.2% to 2.6 million and overall active data customers increasing 34.6% to 9.0 million.

Gooi mustard-sous: http://mybroadband.co.za/news/business/20294-vodacom-increases-profits-in-financial-year-2011.html

Now I'll admit that I'm no financial guru, in fact I hated high-school accounting and swore never to touch it at university level, but the figures are plain to see, released by Vodacom themselves:

28% increase in profits, stemming from only a 6.4% increase in revenue, less (the interconnect odd billion lost + other expenses + billions more in capex)

Do you see my point? Or should I have paid more attention in accounting (seriously, I'm not sure I got this right. Profit = Income (revenue) - Expenses)?

 

[IMWise]

In this case, I'll have to agree that your view is a bit tinfoil.

If an operator really wanted to control the environment they would build their own network and lock everyone out. To suggest giving the control away to a third party is going the other way and if you think about it that is exactly how LLU would work best. A body independent of the network operators, running the common network and leasing services to them, i.e. anyone can access the LL.

Just because a network operator proposed a new idea does not automatically make it evil?

Let me flip it around; How would you take scarce resource and ensure everyone of the 500 license holders can get access to it? How would you implement LLU on both copper and wireless?

And answer this; How would you ensure under-serviced areas get access to broadband? Would you be willing to pay a premium to fund it? Because that's how it works, the money's got to come from somewhere. What do you think it'll cost to cover the country with LTE? You can round it off to the nearest R10B.

So, you clearly know better. How would you do it?

BTW, which prices have gone up?

Sit hom op sy plek Jannie...

 

[IMWise]

You know, this is exactly what Gogga Connect tried to do. Where did that get them?

The true fact of the matter is, Operators are not keen to offer a wholesale model because the big profits lie in the Subscriptions where they can make money of the Effective rate concept. IF a guy with a 500MB package only uses 250MB of that package they technically make approx 0.60c per MB. With wholesale this wont be the case!

On the other hand, it can be noted that they would save lots of money to just pass the support responsibility over to the wholesale company, thus the end-user gets better; more personalized service and the operator just has to worry keeping the network up.

My thoughts...

 

[jdkh]

If an operator really wanted to control the environment they would build their own network and lock everyone out. To suggest giving the control away to a third party is going the other way and if you think about it that is exactly how LLU would work best. A body independent of the network operators, running the common network and leasing services to them, i.e. anyone can access the LL.

I have to agree with ToxicWazte. If it was any operator other than Vodacom and MTN I would say yes, but there is a track record here of these 2 only being in it for themselves. This idea only came along after talks of the digital divident being allocated to new operators and the auction of the higher bands being used to fund it. This spectrum is highly sought after and I know Vodacom has been vying for it and putting in suggestions. If it was going to be used for the consumers benefit I would be all for it but have to agree that Vodacom is looking out first and foremost for itself. I also haven't seen your CEO saying anything about this wholesale provider being a third party and not Vodacom.

And answer this; How would you ensure under-serviced areas get access to broadband? Would you be willing to pay a premium to fund it? Because that's how it works, the money's got to come from somewhere. What do you think it'll cost to cover the country with LTE? You can round it off to the nearest R10B.

Funny one this. There are a lot of underserviced areas where people are willing to pay a fair price. These areas are underserviced only because everyone so far has only started rolling out services in metropolitan areas where the services are overcrowded and never got to these. The little guy that seems to be forcing your hands seems to have taken a different approach here, it's the first time I can get a service within 1 year of its launch. Sentech never expanded beyond it's few base stations, iBurst still doesn't have coverage here but they have "erections" where people don't want any more, Vodacom still doesn't have a signal that's not disappearing all the time, the list goes on.

BTW, which prices have gone up?

2.3GB (previously) = R169.13/GB
2.5GB (now) R171.60/GB

Besides for the other anomalies that were pointed out to you where people will have to buy more than they need. Do you really have to ask a question you already know the answer to?

So, it's actually a good plan but because Vodacom suggested it, there must be a catch?

If MWEB / Cell C / someone else suggested it, it would be all good?

Nice only quoting the few things you agree with and ignoring the others. Have never seen a more perfect example of quoting out of context. Good examples there though. Take a look at what MWeb has done. 2 years ago you couldn't dream of getting basic "uncapped" for less than R1,000 and you still can't get a decent one from anybody else. Yes it's not really uncapped or even comparable to what they have elsewhere but nothing else in this country can compare with it. A year ago we were still dreaming of mobile internet at R33/GB but then Cell C made that the norm to which everything else is compared to and even Telkom reacted to it. It took Vodacom what? Almost a year to make it even more expensive?

You're wrong on a couple of points though, for example who's got the more modern network. Oh, and that prices have gone up. Time to dig out that calculator. Or you could just look at the table myBB published.

See my previous point. The little guy's providing me with a better service than Vodacon. Sure looks like a more modern network than the one YOU are rooting for. Yes please dig out your own calculator. Also since you are referring to the mybb table as an authority I'll assume you regard it as correct and indeed showing a PRICE INCREASE.

But give us your views on how you would allocate the spectrum given the fact that there is space for maybe 4 operators but 400 who wants it. How will you ensure we don't have another Sentech (who never did anything with it) or WBS (who got too little to do anything properly) situation.

Yes indeed, Sentech is sitting on spectrum they are too inept to use, so they are renting it out. WBS got WiMax spectrum that they are sharing with Vodacom and what have they done with it? Oh wait, expensive "business solutions" that are artificially restricted so almost nobody wants them and would rather go with Telkom leased lines. All 3 are not using it to its full potential and should not be given more imo. Apparently Naspers is looking at starting a mobile network. MWeb has made good use of it for their WiMax trial so should be the first consideration for any new allocation.

 

[jdkh]

You know, this is exactly what Gogga Connect tried to do. Where did that get them?

Gogga Connect was screwed over by Vodacom. They were also first to offer a OOB == IB rate and not Vodacom with their "Advanced Bundles" which they falsely advertised as being first.