Uncapped ADSL pricing time bomb: Higher speeds, no wholesale discounts

“With this recent line-speed upgrade, we were able to absorb this without having to pass on any price increase to our customers but it does obviously eat into our margins,” said Hershaw.
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So they were coining it on the 512 acounts before they became 1meg accounts?
 
valmore said:
So they were coining it on the 512 acounts before they became 1meg accounts?
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I think this is unfair and inaccurate. There are many articles about IPC costs - calculate what that component alone costs per GB, and then see what margins the ISPs make. I am surprised that they make any money at all...
 
Why would Telkom lower their prices? That would lose them money. As a company, surely their goal is to make as much money as possible?
 
rpm said:
I think this is unfair and inaccurate. There are many articles about IPC costs - calculate what that component alone costs per GB, and then see what margins the ISPs make. I am surprised that they make any money at all...
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But... they said its sustainable in its current form. If they are hardly making money, how can they claim its sustainable?
 
inferno said:
Why would Telkom lower their prices? That would lose them money. As a company, surely their goal is to make as much money as possible?
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Telkoms prices are determined by Telkom according to the "how much can we f*** them for" this pricing model simply doesn't hold if (a) a strong regulator breaks up the monopoly/cartel imposing the pricing regieme; (b) somebody in the cartel breaks ranks and triggers a (price) war; (c) an alternative product gives the consumers the hit they need.

Telkom WILL redo the IPC overcharge if either:
(a) ICASA gives them a sufficient kick on the ass - I think we saw that this is going to happen no matter what incoherent attempts at legal arguments Telkom conjure to stall

(b) The competition authorities gives them a sufficient kick on the ass - Watch this space next week

(c) The new investors to Telkom realize that the mafia mentality the pervades Telkom needs to go if the company is going to survive.


As for the idea of why would a business cut into its own profits: The purpose of a business is to put capital to use and generate a profit there from. The most succesful businesses in the long term have always been those that build new markets and products rather than rent seeking corruption enriched parasites (or is that parastatals).
 
If they choose to not charge extra for the data on the 1meg account they only have themselves to blame. I suspect the 1meg population is small compared to the other two line speeds
 
DeadPool said:
I have 1 word F***
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Co-sign.

....****.

How can ANYONE support Telkom? Look at what they are doing to this country? 1 Company responsible for stopping our economic growth.

HOW CAN WE JUST LET TELKOM DO AS THEY PLEASE? Competition committee...where are you at? Pathetic.
 
Telkom 6x more expensive

From:
"SUBMISSION BY MWEB CONNECT (PTY) LTD IN RESPONSE TO THE ICASA FRAMEWORK FOR INTRODUCING LOCAL LOOP UNBUNDLING DATED 22 JUNE 2011" - "MWEB Submission 34382.pdf"

Telkom’s IPC offering is currently the only way ISPs can in some way connect to the last mile on the Telkom infrastructure. The cost of this offering is however prohibitive and stifles growth in the industry.
Currently the cost of national IPC bandwidth is six times more expensive than connecting to Europe with a redundant solution on two undersea cable systems. It should further be noted that in addition to the high IPC cost that the ISP pays to Telkom, the end user (consumer) also has to pay Telkom a line rental fee for the same connection in order for the end user to reach the ISP. There is therefore effectively a double charge for the same infrastructure.
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Telkom IPC is 6x more expensive than an undersea cable travelling thousands of kilometres!
Telkom is double billing for the same infrastructure IPC/ADSL.

The ISP's are being squeezed, and some of them will go under because of
Telkom's greed - Surely this needs to be addressed by the regulator.
 
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On the other hand I find it puzzling to see the price per gig so much lower in a fixed line network compared to the mobile networks. If you think Telkom makes a (double) killing, think again and this time keep the cell providers in mind :D
 
rpm said:
I think this is unfair and inaccurate. There are many articles about IPC costs - calculate what that component alone costs per GB, and then see what margins the ISPs make. I am surprised that they make any money at all...
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Telkom must be making a fortune? Is the sole purpose of Telkom to provide that money to shareholders, or is the purpose of the company to provide telecommunications to the public? If it's the latter, and IPC costs are what they are, then it seems like this bucket's got a hole and is not going to fill as it's supposed to
 
fragtion said:
Telkom must be making a fortune? Is the sole purpose of Telkom to provide that money to shareholders, or is the purpose of the company to provide telecommunications to the public? If it's the latter, and IPC costs are what they are, then it seems like this bucket's got a hole and is not going to fill as it's supposed to
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Isn't the point of business to make money xD
 
rpm said:
I think this is unfair and inaccurate. There are many articles about IPC costs - calculate what that component alone costs per GB, and then see what margins the ISPs make. I am surprised that they make any money at all...
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rpm...they are businesses and if they can't make money they should close. its cruel world mate where only the strong survive...

any margin...regardless of how small was taken into account before offering the product and to call foul afterwards is rediculous...at the same time let me say that the IPC costs are quite exorbitant
 
koeksGHT said:
Isn't the point of business to make money xD
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When looking at the current conditions, and taking into account that they're 39% state-owned, then no - that shouldn't be the number one priority. They need to go back to the drawing board and discover their function (what they're supposed to be doing) and how to achieve that efficiently. When they can do that (satisfy consumer DEMAND properly) then of course the money will flow anyway
 
MightyMuffinMan said:
rpm...they are businesses and if they can't make money they should close. its cruel world mate where only the strong survive...

any margin...regardless of how small was taken into account before offering the product and to call foul afterwards is rediculous...at the same time let me say that the IPC costs are quite exorbitant
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I think your are missing the point. ISP's are the good guys, they area doing a helluva lot consider the extremely high costs they suffer because of Telkom. Telkom is squeezing the industry in an outrageous way, and its frankly incredible they can generate any profit at the moment.
 
i will not use any isp running on the dying IS backbone.
 
So are they only complaining about the 1Mbps Uncapped products?

(which entailed a free upgrade from 512)

Nourse explains that the higher ADSL speeds (512kbps to 1Mbps) which Telkom recently introduced is great news for the industry and consumers, but these higher speeds means higher bandwidth usage which places pressure on uncapped service providers.
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