Uncapped ADSL: good or bad for SA broadband?

Telkom recently joined Mweb in announcing that it would strictly enforce its fair usage policy (FUP) to prevent the heavy usage of a small fraction (1%) of its user base from negatively affecting its whole network.

Reports of poor ADSL performance during certain times of the day in certain areas also continue to come in, suggesting that the DSL equipment in certain Telkom exchanges can’t cope with the load.

One can’t help but wonder whether uncapped ADSL has done more harm than good for South Africa’s broadband.

Did it open the sluice gates too widely, too quickly?

We asked some of South Africa’s more prominent Internet service providers to weigh in on the topic.

Web Africa: Tim Wyatt-Gunning

Tim Wyatt-Gunning
Tim Wyatt-Gunning

When it comes to uncapped ADSL, Web Africa is often remembered for saying that Mweb’s launch of affordable uncapped ADSL in 2010 would be unsustainable.

Their concerns at the time centred around maintaining quality of service, which is exactly what ISPs are saying the enforcement of their FUPs are for.

Although Web Africa’s concerns appear to be justified in hindsight, their COO’s prediction that Mweb’s offering would collapse did not come true.

Asked whether they believe uncapped has been good for broadband in South Africa, CEO Tim Wyatt-Gunning said the following:

I think overall it’s been a good thing because it has given hundreds of thousands of South Africans the confidence to explore the boundaries of the Internet in the safe knowledge that whatever they choose to do, they will pay the same budgeted fee month in, month out.

However, increasingly it’s not just about having access to an infinite Internet, it’s about the quality of that access.

Mweb: Derek Hershaw

Derek Hershaw Mweb
Derek Hershaw

Mweb launched its affordable uncapped ADSL accounts in 2010 and it still heavily advocates for uncapped services over capped ones.

The CEO of Mweb ISP, Derek Hershaw, had the following to say about the impact of affordable uncapped ADSL in South Africa:

It’s been good, no question about it.

Think back four years ago to what we were paying for a Gigabyte of data and how constrained our online behaviour was.

Uncapped ADSL broke the shackles, and it forced the mobile operators to look at the pricing for 3G data as well.

Cybersmart: Laurie Fialkov

Laurie Fialkov
Laurie Fialkov

Cybersmart CEO Laurie Fialkov argued that the effect of uncapped on broadband in South Africa has been a mixed bag, but on balance more good than bad.

It has been bad because it has created a price war which has resulted in higher contentions and poorer quality bandwidth.

It has been good because it has allowed the consumer to use products that they would not previously consider in a capped environment such as video streaming, online television, video conferencing, and cloud backup.

I think it has also given a huge leg up to IT entrepreneurs where their internet bill became a significant part of their startup cost and that stifled innovation.

Vox Telecom: Shane Chorley

Shane Chorley
Shane Chorley

Shane Chorley, executive head of network and operations at Vox Telecom, also said the impact has been mostly good, though they’ve noticed most people don’t understand what they’re getting when they buy an uncapped ADSL account.

It has grown the average usage in South Africa.

The challenge is that most people do not understand what they are getting when they purchase uncapped.

They think it means unshaped which it isn’t.

Afrihost: Gian Visser

Gian Visser Afrihost
Gian Visser

We think Uncapped has done a lot to drive pricing and competition in the market and it’s still a benchmark product in every ISP’s arsenal.

However, clients are becoming more savvy in their needs and how they spend their money.

Business and Capped DSL products are becoming more popular and especially with mobile data gaining so much ground, we’re probably going to see clients wanting to diversify their spend to get the best return for their specific needs (and budget).

We still believe there will always be a space in the market for a good value Uncapped product though.

Telkom

Though late to the party, Telkom not only eventually admitted that uncapped ADSL had become sustainable, but also launched an interesting uncapped product range in 2011.

Telkom believes that uncapped profiles have been, and still will be, generally good for the market.

It creates an environment where customers can use the Internet and all the associated benefits (Information, VoIP, Video, Gaming, Cloud, etc.) without fear of getting surprises on the bill from their ISP at the end of the month.

The only downside to this is the potential of a few abusers that spoil the experience of the majority.

Telkom encourages protocols like gaming and video streaming, as entertainment is one of the new dimensions of the Internet that becomes possible with the higher access speeds that you get from NGN [20/40Mbps VDSL], ADSL, and FTTH, and these are consumed in real time.

Telkom discourages the use of torrents, and the like, as these create concurrent sessions that can create a bad experience for all customers on the network during busy periods. Most torrent use is actually illegal in the sense that content is downloaded from sites without paying the requisite license fees.

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Uncapped ADSL: good or bad for SA broadband?