Tuesday, November 22, 2005

High-speed Internet: SA users now paying 1000% more

Culled from: Balancing Act's News Update 282 (20th November 2005) See http://www.balancingact-africa.com/news/backindex.html

(JAD: I recommend signing up for the weekly e-mail newsletter btw.)

High-speed internet users in SA will pay 1000% more for their bandwidth than users in other countries after Telkom restructured its wholesale fees for internet service providers (ISPs).
Telkom's new ADSL price structure, introduced on November 1, means subscribers will face fees even more punitive than in the past, says online forum MyADSL. Its wholesale rate is now R3940 a month to transfer 30GB of data at a speed of 1MB a second. Once ISPs add their mark-up, consumers will pay at least R 4000, says MyADSL.

A superior service from BT Yahoo gives British users a 40GB package at 2MB a second for the equivalent of R350. Tiscali, which once ran an internet service in SA, offers British users unlimited downloads at 1MB a second for R188. That makes Telkom's ADSL service more than 2000% dearer than superior UK offerings.

MyADSL founder Rudolph Muller says that in Japan users can get unlimited downloads at 50MB a second for less than R250 -- 50 times faster at 6% of the price.
Telkom's new fees are still being assessed by some ISPs, Muller says, and most will simply decide not to offer 30GB packages. "The only way to ensure this situation is remedied is for Telkom to implement dramatic price reductions coupled with improvements in the service levels of its ADSL offerings," he says.

What may force a change is a court case instigated by a small ISP, Dotco. MD Johan Ferreira claims Telkom's new structure contravenes the Telecommunications Act. The Cape High Court has issued an order preventing Telkom from charging Dotco the new fees, pending a hearing on December 5.
If Dotco proves the fees are anticompetitive, other ISPs will use the verdict to overturn the new regime.

Telkom argues the change was necessary as some ISPs bought 3GB accounts from Telkom and resold them as 30GB accounts, duping users. ISPs also needed to buy a 3GB account for each customer, even if only 1GB was used.
Now they can buy bandwidth packages from 2GB to 30GB and must cap each user individually. ISPs should be able to cut the cost of ADSL by up to 50% if they calculate how many people use more than 1GB a month and charge them for that, says Telkom corporate communications executive Lulu Letlape.

One company not objecting the new fees is DataPro, which has reworked its ADSL packages. "We've introduced flexible solutions with the right balance between performance and cost. In most cases this will ensure savings and better performance," says MD Douglas Reed.
DataPro is asking users to decide how much bandwidth they want and what they are willing to spend. Its basic package offers 3GB a month for R200, plus the line rental. Anyone who exceeds 3GB will be charged R75 for every 1GB of extra data, until they reach their budget.
M-Web's largest consumer package offers 6GB at a speed of 192KB a second for R809 a month, including R270 to pay Telkom for the line.

Sentech joined the pay-per-usage model this week with MyWireless flexi. Its packages start with 200MB of data for R199 a month, up to 10GB
The cost of international bandwidth accounts for more than 60% of the fees, and Telkom's control over those prices makes it too expensive to offer a fuller capacity right now, says Winston Smith, its manager of broadband wireless. The average person needs 200MB-300MB a month, Smith says. (original SOURCE: Business Day)


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