News24

Naked ADSL critical to SA web - MWEB

2012-08-20 10:00

Cape Town - Naked ADSL (Asymmetric Digital Subscriber Line) is critical for the mass adoption of cable broadband in South Africa, an ISP has said.

"We've always campaigned that naked ADSL is a prerequisite for really driving adoption of fixed line services like ADSL and getting costs down. Most of the cost savings in the last two years have come from ISPs reducing costing around the data portion of it," Derek Hershaw, CEO of MWEB ISP told News24.

State enterprise Telkom has a virtual monopoly on infrastructure and users are required to pay for a landline telephone along with broadband access.

For ISPs, the additional consumer cost hurts their business model.

"Why are we still forcing consumers to pay for a fixed line voice service? That's simply a tax on top of your broadband connection fee," said Hershaw.

Demand

There is demand for broadband internet services in SA and MWEB has an active gaming community of around 50 000 users and most of its customers have opted for uncapped offerings.

"Our uncapped base is now bigger than our capped ADSL base - just over 60% of our customers are now uncapped.

"On a month by month basis, in terms of new customers that join MWEB, almost 90% come in on an uncapped product. That was our strategy from Day 1; that's where we focus our attention," said Hershaw.

MWEB introduced uncapped internet service to SA in 2010 and Hershaw said that there observable changes in user patterns.

"We've seen that mindset in the South African consumer change now. Uncapped is accepted as the way the internet should be provided and the way that people want to consume it," said Hershaw.

More MWEB customers are consuming rich media like video online and engaging in torrent downloads that were cost prohibitive under the old model.

"What we leant very quickly is that the South African consumer is no different to a consumer in any other part of the world. Once you take the shackles off, they behave in exactly the same way," Hershaw said.

According to MWEB, consumers in SA have become more demanding as far as internet connectivity was concerned but cost was still a barrier to entry. It is estimated that there are about 800 000 ADSL subscribers in the country.
 
"The access side still remains a barrier to wide scale adoption," Hershaw added.


News24 is part of 24.com, a subsidiary of Media24, which is in the Naspers stable. MWEB is a subsidiary of Naspers.

- Follow Duncan on Twitter
 

Comments
  • colin.dovey - 2012-08-20 10:31

    Yup - I pay MWEB just R199 and Helkom R700 (for NOTHING!)

      irengineer - 2012-08-20 10:46

      Well, the fee to Telkom is not for nothing, you pay for an unneeded voice service, and the digital DSL service to the local exchange. MWEB is campaigning to have that voice portion (around R 110 or so) removed. Furthermore, local loop unbundling (LLU) will allow MWEB access to the copper services, and allow them to place their own DSLAM kit (what your ADSL connects to at Telkom) inside Telkom's exchanges. That will reduce the cost of the DSL services (your R 700 minus the voice fee) even further. Telkom charges MWEB for something called IP Connect (IPC) to get your MWEB service from their exchange to MWEB. That portion is where the single biggest cost in ADSL lies, and this is where Telkom has us all by the proverbial "short and curlies". But, ICASA is toothless so LLU will take years, especially since Telkom has no financial incentive to provide access to their lines for competitors. That, despite the fact that we as taxpayers funded the copper! With Telkom's fixed line revenue in freefall, it will be years before LLU happens...

      nosiphom.mazibuko - 2012-08-20 11:18

      @irengineer: ICASA is toothless by design by the way. Remember government owns the bulk of Telkom shares and therefore ICASA may not draw up regulations that would harm Telkom. ICASA is "independent" by name - it is after all a government body.

      rob.gunning.1 - 2012-08-20 11:41

      @irengineer - I don't understand why you got thunmbs down here. You are 100% correct and factual.

      jason.sole.92 - 2012-08-20 12:53

      IrEngineer - Thank you so much, first time someone has adequately described the situation so that I can understand it.

      johanttblom - 2012-08-20 12:54

      Rob its the trolls.....

  • kagen101 - 2012-08-20 10:33

    Helkom will try and hang on as long as possible because voice line is one of their main cash cows!!! If they let go of that then they know they will have to compete to stay in the market...and will most probably not be around after 5 years because they suck at doing business. They also claim that the infrastructure was build with their money, but what about the whole lot that was built with our money???

  • almeleh - 2012-08-20 10:40

    It's time for government to take the internet out of the bush.

  • jack.shiels - 2012-08-20 10:57

    This man speaks the truth.

  • sonja.xaba - 2012-08-20 11:03

    TELKOM = ANC Finance house.

  • iceman196 - 2012-08-20 11:38

    100% we have cell phones, get rid of this landline BS

  • joe.soap.1806253 - 2012-08-20 12:11

    "What we leant very quickly is that the South African" "What we leant very quickly" "What we leant" "leant" Really, News24? Really?! *grammar-Nazi* - On a serious note: The sooner something gets done about Telkom the better. To give an example: £19.99 (R260) for a 16Mbps Uncapped line (company: XILO) £11.49 (R149) for a 16Mbps 69Gb Capped line (company: PlusNet) £23.49 (R306) for a Fibre Optic (up to 76Mbps down and 19.5Mbps up) 250Gb Capped line (company: PlusNet) R899 for a 4Mbps Uncapped line and line rental from MWEB (best deal in the country IMHO). Thanks Telkom, you criminals.

      greggstirton - 2012-08-20 13:00

      Difference is that SA is over 3 times larger than Germany and over 5 times larger than the UK, which tends to have a dramatic effect on pricing as Telkom has far more area to cover, more maintenance etc etc. whereas in the UK and Germany there is a higher concentration of internet users per area.

      joe.soap.1806253 - 2012-08-20 14:38

      // Difference is that SA is over 3 times larger than Germany and over 5 times larger than the UK, // Then explain America. //which tends to have a dramatic effect on pricing[1] as Telkom has far more area to cover, more maintenance etc etc. whereas in the UK and Germany there is a higher concentration of internet users per area.// I can handle the slower lines, my primary focus was on the costs. [1]As has been pointed out, we're being charged for voice services and Telkom is charging ISP's exorbitant prices for IPC. Telkom is greedy, they have an insatiable desire to hold the monopoly on all telecommunications in SA and, where they can't, to suck the money out of everyone around them to compensate for losses in potential earnings. We have the demand, we have the ability, we have the funds. We want telecommunications on par with most of the world (obviously not the entire country at all once, but the political, financial and economic hubs to begin with certainly - then the out lying areas incorporated slowly but surely). When it comes to the telecommunications of this country, I'm strongly in the conspiracy boat. Telkom don't roll out newer tech because it means loss of income - to explain, which is better: releasing everything at once for a set price? Or releasing it gradually over time at higher prices? It's all about greed and Telkom are the greediest bunch in the country! *wild crazy eyes*

      brian.exmachina - 2012-08-20 16:46

      @greggstirton: Silly argument. How about Australia, New Zealand? Islands. Middle of nowhere. Australia is HUGE. How about other African countries that have cheaper and faster Internet? Same continent.

      leenesh.singh - 2012-08-21 09:21

      @joe.soap leant is a spelling mistake, not grammar. Axxess has a 4Mpbs uncapped line and rental for R855 (that's the best deal)....I expect this comment to be deleted because Naspers owns MWeb and News24.

      joe.soap.1806253 - 2012-08-21 14:33

      leenesh.singh : Grammar-Nazi: "A person who believes proper grammar (and spelling) should be used by everyone whenever possible." Source: http://www.urbandictionary.com/define.php?term=Grammar%20Nazi ( lol, :-D ) I disagree though, if a person intended to use a different word but through a spelling misstep used another word which happens to be spelled correctly, I see that as a grammar mistake. - I didn't know about Axxess - although I'm of course including customer service, technical service and personal experience into my statement. So I should emphasise that Mweb's 4Mbps Uncapped Line and Rental is the best deal in *my* experience. :-)

  • kseyffert - 2012-08-20 13:05

    Xavier, not quite true. You pay telkom for the copper line and it's maintenance. As to weather you get VALUE for money, that is entirely another issue.

  • quartus.vanzyl - 2012-08-20 15:48

    naked adsl will be just fine, but certainly not at mweb prices!!

  • andrew.newman.98837 - 2012-08-20 17:39

    Forget about Telkom and unbundeling the local loop. Years ago companies started building fibre optic networks for business (FTTB) and homes (FTTH). When these come online we will have proper broadband (speeds of 100Mbps - 1Gbps). ADSL will be outdated. This year a company (ATEC) rolled out a first phase test in Clifton, Cape Town, priced similar to ADSL but getting incredible speeds.

  • vernon.bazley - 2012-08-20 18:33

    Well if you do not want Telkom's line rental then cancel the landline portion and get MWEB to intall iBurst, or Neotel has a great wireless offering. Or just use a prepaid dongle from Vodacom, MTN, Cell C. You can even transfer your Telkom ADSL into MWEB's name and pay MWEB directly, for the entire bundle. No one is forcing anyone to use Telkom's services at all. Next time copper thieves or floods or fire destroy the copper hopefully Telkom will not reinstate the cables because tax payers paid for them originally, and Telkom has no right to charge a maintenance fee.

      nkriek - 2012-08-22 04:45

      Oh puhLEASE!! The wireless optins all suck unless you live in the little building under the tower. I live +- 1 km away from the nearest tower and have tried iBurst, MTN and Vodacom dongles. The speed was about on par with my old dial up modem.

      cayowin.vanderbadt.1 - 2012-08-22 08:59

      There is no way you can get an online game going on wireless at 7pm without heavy lag. As the Access Point is shared between all customers who are online, the speed to the AP is pathetic. And don't even talk about upload speed via wireless. But i get your point about, cancel the land line portion. THIS IS WHAT WE WANT! Why the heck in the era of Skype, OCS and Cell phone should I be forced to pay for a voice connection when I want a Data link, and I am paying for the data link already?

  • pages:
  • 1