Broadband Prices: what more should be done?
MWEB CEO Rudi Jansen says he is smiling ear to ear after seeing the effect the launch of affordable uncapped ADSL services had on the local broadband market.
MWEB surprised the market last week when it launched its new uncapped ADSL offerings starting at R219 a month. Numerous Internet Service Providers responded to MWEB’s pricing in the days that followed, including Internet Solutions, Vox Telecom and Afrihost.
Pricing currently ranges between R200 per month for an uncapped 384 Kbps service and R540 per month for an uncapped 4 Mbps offering.
Only the beginning
This pricing brings South Africa closer to international standards in terms of broadband prices, but Jansen makes it clear that this is merely a first step in making broadband more affordable.
Jansen said that a lot more must be achieved in both the ADSL and wireless broadband arena, including:
- Putting pressure on Telkom to bring down ADSL access (aka ADSL line rental) prices. The combination of ADSL access costs and analogue line rental for a DSL384 connection now exceeds the cost of an uncapped ADSL account.
- Allow customers to purchase ADSL lines without being forced to pay for analogue line rental (and hence a phone service) from Telkom.
- The reduction of Telkom’s wholesale IPConnect (and planned IPStream) pricing. This service is the only way in which ISPs can offer their own ADSL offerings, but the high cost means that it is currently the biggest expense to ISPs, exceeding even the cost of international bandwidth.
- Increase the amount of international bandwidth and the affordability of bandwidth in South Africa.
- Encourage open peering between all the ISPs, including large telecoms players like MTN, Vodacom, Telkom and Internet Solutions. Open peering can significantly improve the total cost of bandwidth provisioning and hence wholesale ADSL provisioning to ISPs, and peering should therefore be encouraged or even forced.
- Wireless network providers like MTN, Vodacom, Cell C and iBurst should open their networks for ISPs to deliver services over. Access to Telkom’s network through a wholesale model is one of the main reasons for the more aggressive ADSL prices, and Jansen is confident that the same will happen in the wireless market if we start to see Wireless Local Loop Unbundling (LLU) or at least a good wholesale model which will encourage competition.
Jansen said that consumers can expect MWEB to be at the forefront of making Internet and broadband access more affordable to consumers. “For us it is a big lobby group which we want to carry on with and rally the support of all South Africans that we can change the Internet [in SA] for one and for all,” said Jansen.
“This is only the beginning. We have bigger plans than this,” Jansen concluded.
Broadband Prices: what more should be done? << Discussion
Related links
What uncapped ADSL means for you
The evolution of Internet connectivity
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