MWEB spurns MTN, Vodacom,Telkom: What will happen next?

MWEB have been vociferous supporters of free and open peering in South Africa and recently surprised the market when MWEB CEO Rudi Jansen announced that their days of paying for local transit are over.

“We have made a conscious decision that as from next month [November] we will not pay anybody for transit traffic any more. So if you don’t want to peer with us, that is it! We will not pay you one single cent anymore,” said MWEB CEO Rudi Jansen.

MWEB ISP CEO Derek Hershaw explains that their ultimate plan is to route traffic in the most cost-effective and efficient manner.

“When we launched Uncapped ADSL we said that the SA internet landscape had to change. Cheaper international bandwidth via Seacom was the first enabler of that process. There are still a number of other significant issues that need to be addressed and the extremely high costs of local transit bandwidth is one of them,” said Hershaw.

“For SA to come in line with global internet standards competition has to increase. If we want to see economic growth and social upliftment we need open internet policies, not restrictive ones. We want to move the internet forward and stimulate broadband adoption,” said Hershaw.

Hershaw said that old school telcos and ISPs need to move away from unnecessary profiteering at the expense of the SA consumer – networks should be open. “Most importantly though, we want our subscribers to have the best experience on the net and that can only be achieved through proper peering.”

The expected impact

It is well known that Telkom, Internet Solutions, Vodacom and MTN Business are particularly sticky when it comes to free and open peering and this is where the biggest impact is likely to be when MWEB’s transit links are cut.

MWEB however guaranteed subscribers that they will not ‘black hole’ any local ISP’s traffic. “We will simply be rerouting traffic away from congested and very expensive local transit links to our international bandwidth, which is significantly cheaper and not congested,” said Hershaw.

All of MWEB’s traffic will therefore still be visible and accessible, but some traffic will just go a longer route (via London) to get to the other end. This will obviously result in higher latency and worse service levels.

In a proactive move, Hetzner – which hosts on the MTN Business network – warned their hosting customers that if they access the Internet via MWEB they may experience slower connectivity when accessing their website hosted on Hetzner’s South African network. Hetzner further warned that this will start to happen from tomorrow.

Will MWEB win the war?

Hershaw said that hopefully they establish a principle where all ISPs peer on an open basis using the “hot potato” principle – i.e. where you hand the traffic over at the closest point to where it is hosted.

“Currently this is in JHB and CPT. Most of our content resides in JHB today, but we plan to replicate it all in CPT over time. That will assist the smaller ISPs who may only be present in one of those locations,” said Hershaw.

MWEB is putting their money where their mouth is: “Some players have asked us to sell them transit. We do not believe in paying for transit or selling transit. Rather, we have invited all of them to peer with us.”

The worst case scenario, Hershaw said, is that the established operators do nothing.

According to Hershaw the best case scenario is that the larger players embrace the changes that have happened in almost every other market in the world.

“Ultimately that leads to improved competition and reduced costs for the end-user. We’ll probably end up somewhere in between in the short to medium term,” said Hershaw.

This strategy may have started working already and according to industry rumors, Internet Solutions (IS) has already started peering openly with MWEB in a proof-of-concept agreement.

Hershaw would however not comment on the peering with IS, saying that “all peering relationships are concluded under an NDA and we cannot make that sort of information public.”

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MWEB spurns MTN, Vodacom,Telkom: What will happen next?