End predicted for ‘telecoms rip-off’
As users questioned why they paid so much for internet access, Antony McKechnie, head of product development for wireless access provider iBurst, blamed Telkom’s monopoly of the undersea Sat-3 cable.
Leasing a line that can transmit 1Mb of data a second and download 3GB of data cost R100000 a month, he said. If iBurst did not control the amount of data its users downloaded each month, “we wouldn’t be in business”, McKechnie said.
DataPro CEO Doug Reed said it was unrealistic for users to expect to pay R200 a month for high-speed access when service providers paid R100000 for the line. Despite being a wholesale reseller of internet access, Telkom gave DataPro a discount of only 7% on its lines, he said.
But Reed did not blame Telkom for capitalising on its cushy monopoly. “It’s nothing to do with Telkom,” he said. “Sat-3 is government regulated, and this whole thing has come about through bad telecoms policies and very weak foresight in those policies.”
European and US players also had the advantage of buying much of their infrastructure at fire-sale prices, Reed said. Many first-world operators overinvested in infrastructure, then went bankrupt in the dotcom crash, allowing their successors to buy the assets at 10c in the dollar.
The debut of new operator Neotel had triggered a 40% drop in Telkom’s fees for international bandwidth, said Neotel’s head of strategy, Angus Hay. But the prices remained extortionate, delegates agreed. What may finally thwart Telkom’s monopoly are municipalities offering the public high-speed internet access and cheap phone calls by setting up new networks. Some are built over existing electricity power lines, and some use Wi-Fi and WiMax technologies to build new wireless networks.
In September, technology company Neology began operating a metropolitan Wi-Fi network in Tshwane with the aim of slashing the cost of broadband access.
Technical director Roelf Diedericks said that was essential when anybody trying to innovate in SA was hampered by the high cost of telecommunications. “We have ended up with the great South African telecoms rip-off, paying thousands of times more than anybody else in the world for basic internet access,” he said.
The communications department’s policy of managed liberalisation was an oxymoron that had failed miserably, Diedericks said. Tshwane’s network gave Hatfield residents internet access for R180 a month for 1GB of data, or R350 a month for 3GB. There were no monthly fees for renting a line as the system had no lines.
Internet giant Google had launched a similar, far larger, network in Mountain View, while Cisco, Microsoft and dozens of other vendors all agreed there was money to be made from municipal networks, Diedericks said.
“Municipal networks will take off like wildfire,” he said. There would be a lot of failures and bungles, but the systems would proliferate and the incumbent operators should be quaking.
“Telkom has to be scared — it’s time is up,” Diedericks said.
Loading ...