News24

Broadband costs much too high

2011-09-22 22:27

Johannesburg - South African video streaming provider Antfarm believes that people are not complaining enough about the high costs associated with broadband and streaming video.

The group said that it was possible that fixed broadband services in emerging markets would stifle growth, or certainly make it more difficult.

"Broadband is certainly picking up rapidly in emerging markets like South Africa, and new technology like the Seacom undersea cable are helping to bring this technology to the fore. But costs are still on the high side," said Marek Dziembowski, a director of Antfarm.

According to research house Ovum - which studied broadband prices across 19 emerging markets, including SA, Nigeria and Colombia - growth in fixed broadband was being seriously held back by high prices. The study also found that SA was the most expensive.

In SA, which was the most expensive of the markets studied by Ovum, prices ranged from $1 443 a year for entry level DSL services to $6 000 per year for the high end options.

Cheapest


"In some [emerging markets], broadband pricing was double or triple the price of an equivalent service in a more developed market," said senior analyst Richard Hurst.

"In addition, lower GDP per capita in most emerging markets means that broadband is only available to the highest socio-economic groups."

Ovum's research revealed that HSPA services were the cheapest option for data-hungry consumers in emerging markets, although the performance limitations and lower allowances created a compromise when it came to the actual customer experience.

Commenting further, Dziembowski said that with the adoption of online video services and content on a more widespread basis by consumers and business, the seemingly high cost of emerging markets was a "painful issue".

"The problem is that people just seem to accept it on the whole. They are not complaining enough and there is a general complacency, with people kind of accepting that, hey, it is okay to live with the high costs. Icasa and the department of communication should step up to the podium and look long and hard at these costs issues.

"They seem to be dragging their feet on the more important issues. For instance, it took several years for Icasa to unbundle the local loop, which also allows for other companies to benefit, besides Telkom, and to provide the 'last mile' of communications."

He said there had been a surge in Antfarm's services recently. But this, he believed, should have happened five years ago "because incoming video content in a corporation can increase communication costs for businesses".

'Profit gluttons'

"Because of the increased cost, the general approach by business is to block most video streaming, because it is deemed too costly. This is naturally stifling growth".

"By limiting access rates unnecessarily and actively sustaining excessive bandwidth pricing, telco operators and data carriers are effectively hampering economic, social and intellectual growth in emerging markets, thereby exploiting the increasing efforts and growing needs of less advanced nations trying to catch up and stay relevant in global markets, he said.

He added that poor countries were being disadvantaged by "profit gluttons" and high broadband cost that limited growth.

"Poorer countries are being denied the many advantages and efficiencies enjoyed by wealthier nations with openly competitive and considerably less expensive internet service provision.

"Instead of presenting a positive contribution toward improving people's living conditions and potentials, these selfish profit gluttons are mindlessly draining what little financial reserves the poorest try retain in hopes of building a better future... word by word, minute by minute, byte by byte, silencing their voices as their airtime runs out, breath by breath..."

Comments
  • Caduceus - 2011-09-22 22:48

    The cost difference is alot more than 2 or 3 times higher. If you look at the Ukraine, they have a 30meg line, uncapped, for R100 a month, a 384kbps here is R360 a month. That is more than 3 times more expensive for a line that does 1% of Ukraines equivalent.

      africanwolf - 2011-09-22 23:08

      agree 100% have many friends there and the price includes the service provider fee in fact they don't need one

      MyPal_Al - 2011-09-22 23:54

      I suggest you do some proper research, before posting your drivel on this site. Research the top 20 sites used by SA internet and you find they are nearly all International sites from Europe or America. How much do you think it costs to build submarine cables to these destinations and how do you think the telecom providers are paying for it? Your stupidity is astounding.

      k1dbl4ck - 2011-09-23 00:00

      @MyPal. Nope. Sorry. Its cheaper to move data from London to Umzumbi than it is to move from Umzumbi to Johannesburg. IN FACT (stop me if im being "stupid"), but up to 70% of the cost of landing a bit on your PC is incurred WITHIN the country.

      Philip - 2011-09-23 00:06

      you should like a chop from Telkom MyPal_Al

      goldenmart - 2011-09-23 07:23

      I cant even get broadband coverage or ADSL. Telkom sucks! I struggle playing online games with 3G

      Slo0th - 2011-09-23 09:13

      I agree with this report and your view. I have 50MB fibre in the UK and pay £44 a month totally uncapped. My sister in Middelburg has the sperm coumter's (Tel kom) lowest speed (fast - what a joke!!!) connection and pays almost R600 a month.

      droplet - 2011-09-23 10:54

      south africa is at the far end of the world, far from any major network hubs. while our prices are currently too high, i doubt we will ever see prices as low as the rest of the world. we need dedicated cables to be laid for our connectivity, and that is expensive...

      Slo0th - 2011-09-23 11:19

      @Droplet. SA supplies other countries in Southern Africa, but they have dedicated links as can be seen here: http://climateadaptation.tumblr.com/post/7344596924/african-undersea-cables-map-three-years-ago-one

  • joshreader - 2011-09-22 23:09

    We should not take note of the first paragraph of this article. We are not complaining enough (if at all). We need to complain more - more loudly, more consistently, and in an organised, smart and broadly national manner. Otherwise, like so much else in this country, we will continue to be taken advantage of. And, to a degree, we have only ourselves to blame. We are victims of monopoly, complacency, state-ownership and a peculiar South African passivity about raising our voice. It is absurd that broadband is prohibitively expensive in the developing world (which supposedly encourages education, competition and democracy), whereas in the developed world it is cheap, and becoming cheaper all the time. Let's do something about this, and quickly.

      thefeather - 2011-09-23 06:19

      Isn't the norm then to go en masse and burn Telkom down? The rip up the Seacom cable? That's the local logic isn't it?

      radarblip - 2011-09-23 06:36

      agreed 100%, we just sit back and take all of the crap we get dealt. this internet business here is serious crap. but what to do? as the feather says we cant go youth league on the ISP's....? im stumped.....

      Megan - 2011-09-23 08:21

      LoL, I'm all for buring telkom down but I think we should leave the Seacom cable alone :)

  • k1dbl4ck - 2011-09-22 23:13

    one word: TELKOM case in point: a company that forces you to hire a voice line @ R120/month if you want any kind of ADSL line.

      LinH - 2011-09-23 09:10

      and the rental of the same line for ADSL on top of that...

  • k1dbl4ck - 2011-09-22 23:14

    one word: TELKOM case in point: a company who has 4 bakkies @ 1-2 techies a pop pouring over a distribution box on the street corner, while 3 people in the neighbourhood waits 4 weeks for an ADSL line.

      proudandpink - 2011-09-23 02:24

      4 weeks? Try 5 years!

  • k1dbl4ck - 2011-09-22 23:16

    one word: TELKOM case in point: a company that hires an army of callcenter attendants that doesnt know what SNR or Line Attenuation is. Never EVER have i phoned with a problem where the operator asked me these CRUCIAL stats. "Please unplug yoor mowdem and wait 10 seconds"... idiots.

  • k1dbl4ck - 2011-09-22 23:17

    one word: TELKOM. case in point: A company that charges 10x the global average for IP connect back haul because they are government sanctioned to do that.

  • k1dbl4ck - 2011-09-22 23:21

    one word: TELKOM case in point: have taken 8 years to unbundle a local loop (to give access to competition) that they never paid for since the government (i.e. tax payers) pretty much gave it to them - yet still have not done so.

  • k1dbl4ck - 2011-09-22 23:21

    Am i complaining enough author? Antfarm? Because i know of a lot of people who have complained A LOT to everyone and the kitchen sink, yet no bananas.

  • k1dbl4ck - 2011-09-22 23:23

    one word: TELKOM case in point: a company that hires 350 squares of retail space (@1k/square/month) in Menlyn so that people can pay their overinflated bills in style. Go figure.

      Megan - 2011-09-23 08:26

      k1dbl4ck: Just brilliant! But I think maybe we should rather spam the forums of the people responsible for this mess as I'm certain News24 aren't going to pass this on. In fact, I'm willing to help give it a go. If we can get enough people to block the specific internet providers' forums with large amounts of complaints, maybe they'll start listening. Unfortunately we will need a good few hundred people on board and as the article stated, South Africans are just too complacent when it comes to complaining.

      kidblack - 2011-09-23 10:50

      Thanks Megan. The ISP's who have forums belong to ISPA, and they are making a helluva noise already. Yet, Telkom, being such a forward thinking, advanced, and well funded company, hasn't bothered putting up a forum in this year 2011. I mean, who needs forums when you can have 384kbps EMAIL!!!! WOOOOOT!!!.

  • czv - 2011-09-22 23:29

    It is seriously crazy. I live and work in Netherlands. I pay about €40 a month for my 50mb/s connection(including wireless), Digital TV (Sucks though. DSTV much better) and a telephone connection. So it's about R400 a month. Online banking is free. People should also complain about the banks charging for this.

  • RaedanWulfe - 2011-09-23 00:09

    Amen to that. Capacity, pricing and technological ineptitude is causing businesses a lot of woe. Good, cheap internet is what's needed to get entrepreneurship going, do research and stay competitive. If this isn't meaningfully rectified, and soon, it's going to get a wee bit iffy.

  • RaedanWulfe - 2011-09-23 00:11

    All I have to say to Antfarm is this... amen to that.

  • Ryan - 2011-09-23 00:51

    100mbit Here in Canada is roughly 45 to 50 $ a month , When bundled with Other services (Like tv / voip) dsl is junk. UNfortunatly Sa never was set up for cable tv, so you dont have the basic infrastructure from the 70s that has been upgraded to carry these speeds. Fibre networks here in canada are growing too... Which means the speed is going to only start increasing exponentially... and Sa will be left behind. In fact, Rogers just set up its new LTE mobile network in Ottawa and expanding soon, that gives mobile phones and data sticks a theoretical 75mbit limit, with what they say is an effective down speed of up to 25mbit... Where is SA now? When a wireless network absolutly kills your wired one, thats bad.

      k1dbl4ck - 2011-09-23 02:32

      @Ryan : prepare your spare bedroom... im coming over. :D

      Ryan - 2011-09-23 02:34

      You Can share my basement with my fish. They stink but not as much as the service in SA

      Darkwing - 2011-09-23 05:27

      Yeah, South Africa can't set up infrastructures like fibre networks because of the labour shorta... oh wait.

      radarblip - 2011-09-23 06:40

      @ Darkwing: made my day with that one!!

  • ariete - 2011-09-23 05:36

    The local loop was supposed to have been unbundled in 1998 (as was stated in the prevailing bill of the day, the Telecommunications Act). The political will is lacking wrt reduction of telecommunications pricing. As part of a DOC working group, I speak with authority

  • Jason - 2011-09-23 05:42

    2 who must we complain/?? they all scammers n money stealers.. especially V is for ...

  • dumitrudonciu - 2011-09-23 06:54

    Guys i live in Romania now and here i have 100mb fiber optic line that only costs R75 a month and its uncapped, it amazing! SA is ripping you guys to shreds coz they know once the infrostructure is layed out prices will drop. Same thing here first it was costly, now every house hold has internet, its the norm here.

      Zee - 2011-09-23 09:39

      Be there shortly! :D

      rimmoah - 2011-09-23 12:02

      guys i live on the moon and i get 1 tb/s downloads!!!who cares about what anyone gets outside this country it doesnt mean jack to telkom they are the monopoly and they call the shots and couldnt care less what we think

  • pitbull - 2011-09-23 07:09

    I agree but then our friends Telkom hold the monopoly and set the rates. Even iburst is too high. However, I can take my iburst or 3g with me while I cannot take the ADSL with me!

      Megan - 2011-09-23 08:37

      Exactly, the biggest problem is there is little or no competition for Telkom. Majority of other countries have more than 1 fixed phone line companies meaning in order to attract customers away from their competition, they will offer more attractive prices. We need to allow other companies into the fixed line telecommunications in this country. It doesn't work when people only have one option because it's guaranteed that the attitude towards the consumer is "take it or go without".

  • Propjockey - 2011-09-23 07:20

    Perhaps a golden opportunity was missed when NEOTEL ripped up many neighbourhoods and planted their infrastructure! They could have included a drop-off at each property for later sale and development as a fibre-speed, all-in-one service to their prospective customers. Light years ahead of Helkom (sic.).

      Megan - 2011-09-23 08:34

      Hmmm, I currently use Noetel and in all honesty I can't wait for my contract to end so that I can cancel it. They have this amazing ability to offer the best internet service I have ever come across for about 4 days every month... every other day is a completely different story. When we first entered into the contract we had about a month of good internet when suddenly we could hardly maintain a connection for more than 20 minutes at a time. When asking for an explanation, they told us that they had taken on more customers than their systems were able to cope with and we were more than welcome to pay a ludicrous cancellation fee and go somewhere else... So, personally, while the concept of a completely wireless system sounds good, it's proved to be a bit impractical... especially on the gaming front :)

  • JF - 2011-09-23 07:28

    South Africa as a whole is a greedy country - from banks to internet, medical insurance, air travel, cell phone services, supermarkets, car service/parts, in fact anything and everything. Everybody is out to make a buck from everybody else and that is the problem with a poverty-stricken country where the majority of the population are living below the bread line. Fun in the sun?

      Jay - 2011-09-23 08:56

      I cannot agree with you more. Especially the "everybody is out to make a buck from everyone else" bit.

      Winsome - 2011-09-23 09:37

      JF - your reply says it all! Greed takes precedence in this country of plenty for all - from the price of food to the harbour prices - this country fleeces everyone.

      kidblack - 2011-09-23 10:52

      A bit off topic... but yes... a country in which you pay 100% IMPORT tax on motor vehicles Manufactured in East-London - in which those same vehicles are being loaded up in RECORD numbers on big ships and exported to the States where they cost R190 000 less. Go figure.

  • Alpha - 2011-09-23 07:34

    Bandwidth prices are the least of our problems, people. It is just a symptom of a decease called the ANC. High cost of fuel, excessive taxes, road tolls, unemployment, BEE, insufficient competition are all causes leading to these high prices.

  • gg - 2011-09-23 07:40

    "...these selfish profit gluttons are mindlessly draining what little financial reserves the poorest try retain in hopes of building a better future... word by word, minute by minute, byte by byte, silencing their voices as their airtime runs out, breath by breath". Well said, sir! MTN/Vodacom/Telkom/Cellc et al are the robber barons of the 20th and 21st centuries

  • Dirk - 2011-09-23 07:43

    Bloody agents!

  • Man can do - 2011-09-23 07:46

    How and where can the consumer complain? Telkom doesn't even answer back on an email query? The other ISPs are driving costs down, whereas Telkom doesn't even offer uncapped yet as a basic package.

  • BoerSeun - 2011-09-23 07:49

    it so old, dont they have something new to talk about. gosh it has been know for more than 10 years, and nobody is doing anything about it.

  • CyberDog - 2011-09-23 08:15

    Actually 2 words. ANC, Telkom. it is the laws and the tenderpreneurship of the anc that has ended up in this situation. According to the law, there are not allowed another operator unless it is first authorized by the ANC and their tender buddies. And what happened about this, other than a massive spending of money, and pockets of the ANC filled through the government owned Telkom? The place to start with this fight, as is a common pattern with most of the other problems in South Africa is once again, the ANC... And Yes, the Antfarm is right, this is Bullsh1t.

      howard staunton - 2011-09-23 09:27

      nonsense man. Before Telkom we had the Post Office that managed telecoms. The industry has always been tightly regulated. The ANC has actually set about opening it up. Dont like the ANC, but if one more IT twit drones on about the anc being responsible for everything i am going to puke.

      kidblack - 2011-09-23 10:53

      Not that the ANC (government) is complaining from their share in Telkom profits.

  • Enigma07 - 2011-09-23 08:45

    And as for 3G this is very expensive compared to ADSL. The question that arises is how can 8ta offer 10G for R199 and everyone else can only offer 2G for R149 (vodacom,cell c etc.). This is one big ripp off.

      Greegs - 2011-09-23 09:34

      Depends on how the bandwidth is over-sold......actually quite simple!

  • Greegs - 2011-09-23 08:55

    Do u guys think the cable gets laid for free? Of course we are more expensive than the US and Europe as its us connecting to them rather than the other way around. There are more people there and volumes apply to pricing. People will always complain at the prices, if you were getting it for R100 it would still be too much! Look no further than PC pricing if you want to see expensive. Be thankful......

  • Brent Engelbrecht - 2011-09-23 09:57

    NOt just bandwidth... I priced the Samsung Galaxy Tab from Vodacom last weekend... It sells for the equivalent of $1077 at current exchange rates. In the US, its suggested retail is $650... And some carriers will no doubt have promotions at even lower prices. We are already in a global market competing against the rest of the world, but hamstrung by the high cost of access. Check sites like elance.com, vworker.com, scriptlance.com that are filled with people and companies from other emerging / first world countries with skills that are streaks ahead of ours.

  • buckballs - 2011-09-23 10:20

    Thank goodness for Cell C and 8ta, all of a sudden prices are dropping to 1.9c a MB. Howcome all of a sudden prices can reach so low? The Local ISP's have been gluttons.

  • Badballie - 2011-09-23 10:54

    As long as government owned Telkom has a death grip on the national grid we will be milked for every cent. by rights an emerging market like ours should supply free 3g access and have minimal network charges related to data usage. Suppliers are however painfully aware that cell phone markets have become saturated and the only real area for profit going forward it data offerings. out of rate data still sits at around R1500.00 per 5 gigs as apposed to the US which offers the same for under half the cost

  • lenyora - 2011-09-23 11:07

    ...DONT KNOW WHAT YOU ARE COMPLAINING ABOUT, I HAVE 10GB PER MONTH WHICH I ONLY PAY R200 FOR HERE IN SOUTH AFRICA!! STOP WHINING!! JEEZ!!

      Enigma07 - 2011-09-23 11:46

      Lenyora you are lucky you have 8ta coverage I don't get the signal in my area so I have to pay these high costs.

      Pickle - 2011-09-23 13:53

      Lenyora its not just about private users... what do you think is gonna happen if you gotta connect say 20 people in an office environment with your 10gb 8ta stick?... It's not going to happen. and how much did you say you pay should you need to top up on that 10gb's?

  • Simon Baines - 2011-09-23 21:48

    In comparison to the rest of the world our price are seriously high. I was in Indonesia last year and you can get a 20 mb line unshaped for less than R250 a month . So to all the people that say there happy with what they have. Don't be ignorant and settle complain until we catch up

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