Making money from uncapped ADSL
With Telkom’s high IPConnect costs and declining ADSL prices, the sustainability of uncapped ADSL services in South Africa has been questioned. Industry experts, however, argue that it is possible to create a sustainable uncapped business model – if you do it right.
Two industry players, who both manage their own ADSL networks, shared their views on the business of uncapped ADSL products.
We know uncapped ADSL is sustainable: MWEB CEO
The person who was behind South Africa’s uncapped ADSL revolution, MWEB CEO Rudi Jansen, says that they know uncapped is sustainable.
“The ISP business is all about volumes and usage ratios. We have seen a phenomenal uptake in ADSL subscribers and usage has increased. Growth in both of these drivers has ensured that uncapped is sustainable,” said Jansen.
“As we buy more capacity, the unit price decreases – which, in turn, ensures that more bandwidth can be added to the network as demand grows.”
Jansen told MyBroadband BusinessTech that all MWEB’s uncapped ADSL products are profitable.
Manage uncapped properly: Neology CTO
Neology CTO Roelf Diedericks says that, while uncapped is difficult to manage, it is sustainable.
“Running an uncapped network requires you to throw more geek skills at it than the average network operator has available,” says Diedericks.
Diedericks provides an interesting example:
“Did you know that it’s possible to download nearly every single popular torrent over peering capacity with MWEB only? This means that if you block your torrent client from all networks except MWEB’s IP space, you can download nearly everything you need with local-only bandwidth. That should tell you something about the power of uncapped, and settlement-free peering.”
Diedericks, however, highlights that uncapped products are not great profit drivers for ISPs right now. “Generally I think it allows them to create bigger networks, but not necessarily make lots of money,” said Diedericks.
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