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International Bandwidth Costs from a Consumer’s Perspective

International Bandwidth Costs from a Consumer’s Perspective. Rudolph Muller University of Johannesburg MyADSL. Presentation Outline. About MyADSL The impact of high international bandwidth costs on the consumer Total cost of internationally comparable broadband connection

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International Bandwidth Costs from a Consumer’s Perspective

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  1. International Bandwidth Costs from a Consumer’s Perspective Rudolph Muller University of Johannesburg MyADSL

  2. Presentation Outline • About MyADSL • The impact of high international bandwidth costs on the consumer • Total cost of internationally comparable broadband connection • Possible International Costs • Total cost for broadband service • The way forward

  3. MyADSL • Keep users informed • Forum • News Section: Variety of news sources • Broadband conference • Negotiate & Act • Negotiations and dealings with all broadband providers on behalf of consumers • ICASA complaint: In final stages • ASASA Complaints: various successful • Act as a watchdog: advertising, wrong information • Non-profit • Run by volunteers • No drive for profit = objectivity, nobility • Everything free & accessible, including conference • Act as community • Strength in numbers • Much tougher to lie to customers • Sharing of knowledge • Broadband Providers directly interact with their customers

  4. MyADSL’s Popularity & Growth Current Traffic • 166 000 Unique Monthly visitors • Over 2 million page views • 17 million hits • Most active IT website in South Africa (Africa??) Forum • 10 000+ registered members • Nearly half million posts

  5. SAT3 & International Bandwidth Costs

  6. SAT3 Costs: Why are consumers concerned? • International Bandwidth costs directly influence the cost and quality of services to end users • Sentech’s MyWireless: 64% of total cost of service to end user is related to international bandwidth charges • The massive cost of international bandwidth means low usage broadband offerings, typically between 1 GB and 3 GB per service • Hosting: Local hosting bandwidth costs exorbitant in comparison with international standards - local websites designed for locals hosted in US, UK, Europe • High cost makes it very difficult for competitors like IS or Verizon to develop competitively prices residential broadband services • Slow broadband services, low usage allowances, high costs.

  7. Far Reaching Effects • High Priced Broadband services • Only small portion of society can afford it • Low penetration rates (0.6% in comparison with OECD 13%) • Creates digital divide • Low usage allowances • Only use it for essential or low bandwidth services • Country falling behind rest of the world regarding podcasts, video services, online radio etc. • Not much local content, local developers stuck in 90’s, IT industry as a whole suffers • Internationally uncompetitive • Slow speeds • Can’t make use of bandwidth intensive services like high-definition video etc. • Developers and IT industry still stuck in 56k mode

  8. ADSL Costs in South Africa

  9. ADSL PRICING: Cost & Speed

  10. ADSL International Average + ‘100%’ Benchmark R 882-00

  11. Suggested SAT3 Costs • Debatable Figure, but $ 1000-00 per Mbps looks reasonable, as suggested by the EASSy discussions in the press • 1984 kbit/s at R 66,424 (Latest figures we received from Telkom) • Significant reduction needed to reach acceptable levels • Reduction is needed to ensure affordable, internationally comparable services

  12. Cost of Broadband Service: Aims • Sarah Truen, an Associate at Genesis, said that R 193-00 for a 512 Kbps ADSL connection is a reasonable price in the local telecoms environment. This equates to a 71% reduction • MyADSL suggests a cost of under R 882-00, aiming for R 441-00, for a 1 Mbps+ service with at least 30 GB unshaped bandwidth. This again equates to a reduction of 72%. • Encourage the use of broadband for VOIP service (VoBB) to reduce full telecoms bundle to consumers. • To make this a reality, a significant decrease in the price of SAT3 bandwidth is needed.

  13. The way forward • The Minister suggested at the Department of Communication’s recent speech in Parliament: • “Declaring it an essential resource would remove Telkom's monopoly on SA's access to the SAT3 connection to the rest of the world, and would give every telecoms operator equal access to it. Operators currently have some access to SAT3, based on prices determined by Telkom.” • ICASA has indicated that they are looking at addressing the high cost of international bandwidth, specifically related to affordable SAT3 access. • Telecoms Colloquiums on reducing telecoms pricing: Lots of talking and promises about international bandwidth costs • South Africa’s leaders in the telecoms arena are however known for making promises, talk shops etc. Not for doing anything! • All we ask for: Do what you have been talking about for years!

  14. Q & A Rudolph Muller (+27) 11 406 3551 rpm@myadsl.co.za (+27) 84 683 5360 http://www.myadsl.co.za

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