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No Price cuts for broadband user in SA any time soon

Jul21

Written by:
2009/07/21 01:28 PM RssIcon

Seacom The long-anticipated Seacom cable will go live this month A live demonstration will be held in Johannesburg this week - and is widely expected to usher in an era of faster and cheaper Internet connectivity. But users are warned not to get their hopes up too soon.

I have always warned people that the new Seacom cable will not immediately bring prices down nor increase bandwidth. It might do so in the long run, but the reality for now is that we carry on as usual.  According to Arthur Goldstuck, MD at World Wide Worx, business will carry on as usual as telcos will continue to control the markets in their interest. And he expects that Neotel will initially operate the same as Telkom.

“The initial operational capacity of the new Seacom cable will only be double that of the current 40Gbps Telkom SAT3 cable; the pricing structure landscape will not show immediate disruptions and connectivity speed will initially be determined by the end-user product and not by the international bandwidth capacity," Goldstuck told a discussion at the CITI and Bandwidth Barn soapbox event on Tuesday.

Telkom still control and monopolise the market. We will still pay through our teeth for broadband. Newcomers to the market will still have to fork out huge amounts of money for infrastructure or use the current Telkom infrastructure. I don’t expect this to change for the next 5-10 years.

In fact, Telkom is to increase prices not reduce them. On 22 June, Telkom filed for an over tariff increase of 1.7% with ICASA. Although Telkom suggests that ADSL prices are to remain the same. This does not make it easier for those of us who rely so heavily on ADSL for our business. Telkom still lag far behind the rest of the World on its broadband price and bandwidth offerings. Check out this list of Broadband price comparisons.

Then there is the extra cost of your ISP. Even if you have ADSL to your house or business, you still need an ISP (Internet Service Provider) to make your connection to the internet. Here is a list of ISP Price Comparisons.

Do you think we are paying too much for bandwidth?

Related reading:

Local Bandwidth Sucks

New Fixed Line Operator Available in South Africa.

Telkom Sucks Again. I hate it.

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