MWEB shook up the local broadband market when it launched affordable uncapped ADSL services in March, forcing other service providers to follow suit with more affordable ADSL data bundles. <\/p>\n
This sudden change in the local ADSL market caught many Internet Service Providers (ISPs) unprepared, raising questions about the sustainability of the myriad of uncapped services which emerged in recent weeks.<\/p>\n
Speaking at the recent Techcentral Broadband Debate in Johannesburg, industry players from Afrihost, Neotel, Internet Solutions, Cell C and ICASA had varying views on the advent of affordable uncapped broadband in South Africa.<\/p>\n
Uncapped sustainable?<\/strong><\/p>\n Afrihost CEO Gian Visser said that he is confident that uncapped ADSL services at affordable rates are sustainable in the long term, but that it will be plagued by poor service levels and heavy shaping in the short term.<\/p>\n Questions have been raised about the need for uncapped broadband offerings when most consumers only use a few gigabytes of data per month.<\/p>\n Neotel’s Chief Sales and Customer Service Officer, Stefano Mattielo said that the reality is that 99% of their subscribers use between 1.5 GB and 2 GB per month, and that there is a place for low-usage accounts in the market.<\/p>\n Cell C CEO Lars Reichelt supported Mattielo, saying that the average monthly data usage in a country like Sweden, where 100 Mbps connections are commonplace and where file sharing service like ThePirateBay resides, is around 1.5 GB per month.<\/p>\n Reichelt said that the industry should not focus too much on a small portion of users who require high-end uncapped accounts, but rather on getting the majority of the population connected to broadband services.<\/p>\n Justin Spratt, Internet Solutions’ VoIP mobile general manager, was even less complimentary towards uncapped broadband services. Spratt, who previously described uncapped broadband as ‘a con’, said that uncapped services may well make the Internet in South Africa slower and deteriorate general service levels.<\/p>\n Great demand for bandwidth<\/strong><\/p>\n Internet Solutions MD Derek Wilcocks brought a different perspective to the debate, arguing that people always underestimate the demand for bandwidth from customers.<\/p>\n According to Wilcocks the 1.5 GB and 2 GB mentioned by Reichelt and Mattielo is likely to be a drop in the ocean of what broadband users will consume in future. <\/p>\n Wilcocks added that consumers and businesses will typically snap up available and affordable bandwidth, and that innovation typically follows in bandwidth rich environments.<\/p>\n ICASA councilor William Stucke supported Wilcock’s view, proposing a change in mindset regarding the business models surrounding broadband and bandwidth in South Africa.<\/p>\n Stucke said that a bandwidth rich environment can be created through 100 Mbps Fibre to the Home (FTTH) connections, making contention ratios less relevant and general service levels far higher.<\/p>\n Stucke argued that the current thinking around broadband from operators makes it challenging for them to build a solid business case around high bandwidth FTTH (fibre to the home) environments, but that SEACOM showed that a low margin\/high usage business model is sustainable.<\/p>\n