Uncapped ADSL customers are using more and more data, and unless wholesale ADSL prices decrease and Naked ADSL is introduced the business model is under threat.<\/p>\n
ADSL remains the broadband connection of choice for many businesses and residential users, and until fibre services become widely available this is unlikely to change.<\/p>\n
One of the benefits of ADSL over mobile broadband connections – another connectivity option – is the availability and cost of uncapped data products.<\/p>\n
However, Internet service providers are starting to feel the pinch as the average data use increases without significant wholesale price reductions.<\/p>\n
The increased popularity of online video and other bandwidth-intensive services is resulting in a higher average data consumption per user.<\/p>\n
According to feedback from SA\u2019s top ISPs, average data use on uncapped accounts increases between 9% and 50% per year.<\/p>\n
While high-end uncapped subscribers still consume a disproportionate amount of bandwidth, it is less pronounced now through better fair-use policies.<\/p>\n
The main\u00a0reason for higher data use is no longer peer-to-peer services, but rather video. Most ISPs predict this will only grow.<\/p>\n
To accommodate the growth in the average data use without increasing the price or lowering service levels, wholesale price cuts are needed.<\/p>\n
Vox Telecom\u2019s head of network and operations Shane Chorley said the biggest cost to deliver broadband is the cost to connect to the Telkom network \u2013 IPC.<\/p>\n
Afrihost director Greg Payne said IPC bandwidth is charged at four times the cost of international bandwidth, which is an absurd situation.<\/p>\n
\u201cTelkom should have to justify to the regulator why these charges are so high, when other providers who have real competition are charging a fraction of their price,\u201d said Payne.<\/p>\n
Payne said that the main thing they would like to see is an immediate drop in IPC pricing from Telkom.<\/p>\n
\u201cA minimum price reduction of 30% per year for 4 years is needed to bring about competitive pricing,\u201d said Payne.<\/p>\n
MWEB ISP CEO Derek Hershaw said that broadband is a volumes game, which means the more users you have on the ADSL network the better it is in terms of efficiencies and economies of scale.<\/p>\n
\u201cThe ADSL market growth has been pedestrian for a few years now – the ADSL penetration rate versus the number of homes that have Telkom lines is way too low,\u201d said Hershaw.<\/p>\n
Hershaw said it is high time for Telkom to seriously consider naked ADSL to stimulate real growth.<\/p>\n
Cybersmart CEO Laurie Fialkov agreed, saying that users and ISPs should not be forced to purchase a phone line with their ADSL service.<\/p>\n
\u201cHaving said that, Telkom’s fibre offering – which also works over the IPC bandwidth – does not require you to take the phone line,” he said.<\/p>\n
Uncapped broadband prices \u2013 Fibre versus ADSL<\/strong><\/a><\/p>\n You must demand uncapped mobile data: ISPA<\/strong><\/a><\/p>\n