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IP Connect cuts trickle through [ITWeb](ITWeb Via Acquire Media NewsEdge) The industry can expect more IPC cuts from Telkom. It has been two months since Telkom cut wholesale IP Connect (IPC) costs for the third time in two years and, as industry observers predicted, SA's consumers are reaping the benefits, with Internet service providers (ISPs) getting more creative in their offerings. On 1 February, Telkom announced a 10% price reduction on IPC, the wholesale product through which third-party ISPs connect to Telkom's. This followed a 30% IPC price reduction in April 2012 and another 8% cutback about a year-and-a-half later. The cost-cutting exercise is in line with last year's settlement (../index.php?option=com_content&view=article&id=64942) between Telkom and the Competition Commission – a move taken to resolve a series of complaints lodged against the fixed-line incumbent from 2005 to 2007 by ISPs. Telkom says the move to reduce the wholesale burden on ISPs is aimed at helping them grow their fixed broadband offerings in SA. Historically, ISPs have positioned Telkom's IPC rate as being an inhibitor to growing broadband in SA. The cost of IPC has been positioned by the Independent Communications Authority of SA as "the single largest cost component faced by competing ISPs in providing choice to the end-user for fixed-line ADSL services". Last year, the Internet Service Providers' Association (ISPA) said IPC could constitute up to 70% of the total costs involved in ISPs delivering Internet services to their customers. ADSL promotion (http://www.webafrica.co.za/1rand-adsl?utm_source=mybb&utm_medium=article&utm_campaign=R1ADSL) that offers 80GB of ADSL data for R1 a month. The R1 is available for two months, after which customers will pay R149 per month for the same deal, which includes 40GB anytime data and 40GB of night-time data. Last month, Afrihost cut its standard top-up rates (http://www.afrihost.com/site/newsroom/view/dsl_topup_data_pricing) for DSL data to R5 per GB, while Axxess reduced the price of its prepaid DSL (https://www.axxess.co.za/prepaid-adsl) from R29 to R9 per GB. In February, OpenWeb launched Everyday Uncapped (http://openweb.co.za/everyday_uncapped.html), which includes unlimited data usage and no throttling. Yesterday, the ISP introduced discounted rates, ranging from R159 for a 1Mbps service, to R995 for 20Mbps. Derek Hershaw, CEO of one of SA's largest ISPs, MWeb ISP, says the company has made a few changes aimed at delivering more value to its customers, as well as an improved online experience. "We have adjusted pricing, and allocated additional data at the same price on selected capped products. On our uncapped product range, we have been adjusting the usage thresholds in terms of our acceptable use policy, allowing more capacity for uncapped customers and ultimately an improved experience." He says the last IPC price reduction came at the same time as Telkom's line speed increases and as a result, most of MWeb's customers' ADSL lines are now capable of higher speeds and subsequently require additional capacity. "In line with this, we have additional capacity in our network to ensure that our users have the benefit of a faster connection." National Broadband Advisory Council (../?id=71418:Carrim-firm-on-broadband-progress), which will advise the minister on the implementation of SA Connect, government's broadband policy and strategy that aims to have a 100% connected population by 2030. He says every additional layer of cost is an inhibitor to lowering the cost of communications – a drive the DOC is intensifying as it aims to reach government's goals of pervasive broadband. "With each additional layer of cost, the effort to bring down prices is made that much greater. It's like drawing teeth from a cranky old animal." (c) 2014 ITWeb Limited. All rights reserved. Provided by Syndigate.info, an Albawaba.com company |