Telkom’s bitstream and ADSL prices

As part of South Africa’s local loop unbundling (LLU) process, the Independent Communications Authority of South Africa (ICASA) has called on bitstream access to be introduced by 1 November 2012. However, the benefits of a bitstream service may be minimal unless ISPs get what they are asking for.

MWEB ISP CEO Derek Hershaw said that based on the feedback they have received so far, Telkom’s initial bitstream offering will have no commercial benefits over the existing IPConnect (IPC) product which is currently used for wholesale ADSL access.

“The new bitstream service will also not enable us to anything new in terms of product differentiation,” said Hershaw.

The MWEB ISP CEO said that he would like to see a reduction in costs for bitstream when compared to IPC. “Also, we’d like to see an improvement in the service level agreement (SLA) for Bitstream, compared to the ‘best effort’ SLA provided with IPC,” said Hershaw.

“We hope to have more control over the delivery of traffic all the way to the consumer (through an SLA), so we can manage the quality of service for the subscriber.”

Hershaw explained that they are currently at the mercy of Telkom’s policies once they hand the traffic over at the IPC node. “Also, we are taking load off Telkom’s network so [bitstream access] should be more affordably priced than IPC,” said Hershaw.

Hershaw said that if bitstream access does not offer any financial benefits over IPC, MWEB is unlikely to make use of it.

Derek Hershaw
Derek Hershaw – MWEB ISP MD

More freedom, but prices must come down

Cybersmart CEO Laurie Fialkov said that bitstream will give them greater control over their customers.

“You can do things like give fixed IP addresses natively which currently requires a work-a-round with L2TP (Layer 2 Tunnelling Protocol) and requires fancy client side equipment,” explained Fialkov.

Fialkov called for lower wholesale ADSL prices from Telkom. “There will be no real cost advantage unless the price per Mbps for bitstream comes in below IPC,” said Fialkov.

Fialkov urged Telkom to provide publicised contention ratios on the new bitstream product which will allow ISPs to guarantee their own contention ratios.

The Cybersmart CEO also asked for a naked ADSL service (therefore an ADSL service without a bundled voice line service) to drive down costs.

Douglas Reed
Douglas Reed

Vox Telecom CEO Douglas Reed reiterated Fialkov’s views, saying that bitstream access will provide them with more quality of service (QoS) control. It also technically simplifies the ADSL solutions and increases efficiencies.

“These benefits will spill over to our customers with better pricing and quality,” said Reed.

Reed also called for appropriate, market-related pricing and service levels to ensure that bitstream access adds value to ISPs.

True wholesale division needed: Neology CEO

Neology CTO Roelf Diedericks said that he hopes that, at the very least, Telkom is forced to create a true wholesale division with its own presence and systems to deal with providers – similar to BT Wholesale in the UK.

“I think and hope that we’re going to see a lot of replication of the BT Wholesale model – even Telkom’s name for the product “IPStream” matches BT’s Wholesale product,” said Diedericks.

Diedericks said that he expects a price reduction compared to IPC pricing, since bitstream is technologically simpler for Telkom to manage, and will reduce the load on their ESR’s and authentication infrastructure.

“I fear however, that Telkom is going to over-complicate bitstream once again, in order to try and maintain an (anti)-competitive advantage,” said Diedericks.

“Whether ICASA actually understands bitstream access enough to be able to make intelligent decisions is also a concern.”

Roelf Diedericks
Roelf Diedericks

The Neology CTO said that bitstream will help them to offer better wholesale services to customers, with less configuration and involvement from Telkom.

“We will also save on IP resources, since we don’t have to deploy entire netblocks across the country-wide Telkom network. We will also be able to offer differentiated services, such as static IP addresses, static network blocks, IPv6 access, and guaranteed user-centric QoS reservations for VOIP, gaming, or video services,” said Diedericks.

“We can also introduce customisable ‘cloud’ or ‘personal’ firewalls that users can manage from a central location. The entire VPN business will also be turned on its head quite a bit with the introduction of bitstream.”

“Finally, bitstream will allow us to easily load-balance multiple geographical uplinks to the Telkom wholesale network, thus increasing reliability and network quality,” said Diedericks.

He added that from a RADIUS/AAA perspective they will be in full control of the mechanisms and interim periods that they receive usage data for, rather than having to depend on Telkom’s hourly updates.

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Telkom’s bitstream and ADSL prices