ADSL prices and wholesale rates
As part of South Africa’s local loop unbundling (LLU) process, the Independent Communications Authority of South Africa (Icasa) has called on bitstream access to be introduced by 1 November 2012.
However, the benefits of a bitstream service may be minimal, unless it results in a wholesale ADSL price cut.
MWeb ISP CEO, Derek Hershaw says that, based on the feedback the company has received so far, Telkom’s initial bitstream offering will have no commercial benefits over the existing IPConnect (IPC) product which is currently used for wholesale ADSL access.
“The new bitstream service will also not enable us to [do] anything new in terms of product differentiation,” said Hershaw.
The MWeb ISP CEO said that he would like to see a reduction in costs for bitstream when compared to IPC.
“Also, we’d like to see an improvement in the service level agreement (SLA) for bitstream, compared to the ‘best effort’ SLA provided with IPC,” Hershaw said.
Hershaw continued, saying that if bitstream access does not offer any financial benefits over IPC, MWeb is unlikely to make use of it.
Cybersmart CEO, Laurie Fialkov also called for lower wholesale ADSL prices from Telkom. “There will be no real cost advantage unless the price per Mbps for bitstream comes in below IPC,” said Fialkov.
The Cybersmart CEO also called for a naked ADSL service (an ADSL service without a bundled voice line service) to drive down costs.
Douglas-Reed
Vox Telecom CEO, Douglas Reed said that bitstream access will provide the company with more quality of service (QoS) control. It also technically simplifies the ADSL solutions and increases efficiencies.
“These benefits will spill over to our customers with better pricing and quality,” said Reed.
Reed also called for appropriate, market-related pricing and service levels to ensure that bitstream access adds value to ISPs.
Web Africa CTO, Rupert Bryant said that “good pricing” is the main thing which the ISP would like to see from a bitstream service. “It will be pointless unless the price point is attractive against IPC,” Bryant said.
“It’s doubtful that bitstream will help the affordability for the majority of consumers, but it all depends on what Telkom does with their pricing,” said Bryant.
True wholesale division needed: Neology CEO
Roelf Diedericks
Neology CTO, Roelf Diedericks said that he hopes, at the very least, that Telkom is forced to create a true wholesale division with its own presence and systems to deal with providers – similar to BT Wholesale in the UK.
“I think and hope that we’re going to see a lot of replication of the BT Wholesale model – even Telkom’s name for the product ‘IPStream’ matches BT’s Wholesale product,” said Diedericks.
Diedericks said further that he expects a price reduction compared to IPC pricing, since bitstream is technologically simpler for Telkom to manage, and will reduce the load on their ESR’s and authentication infrastructure.
“I fear however, that Telkom is going to over-complicate bitstream once again, in order to try and maintain an (anti)-competitive advantage,” said Diedericks.
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