MWeb boosts ADSL arsenal | ITWeb

By Leigh-Ann Francis
Johannesburg, 30 Jun 2010

Local Internet service provider (ISP) MWeb has extended its ADSL market shake-up to its business unit, unveiling a bonded ADSL offering it claims is up to 70% cheaper than the nearest comparable offering on the market.

This announcement follows the recent unveiling of the ISP's range of uncapped ADSL offerings for consumers and business.

Now, in the latest round of an aggressive market strategy, MWeb's bonded ADSL entails combining up to four ADSL lines into a single router that creates a single channel, high-speed link, effectively multiplying the speed of each line by the number of bonded lines.

The benefits of such an offering will be particularly attractive to small to medium-size business, explains BMI-Techknowledge analyst Brian Neilson, because it offers an alternative to leased lines.

“As ADSL services become more highly specified, they can perform a similar functional role to leased lines of lower 'ticket speeds', despite their asymmetrical nature,” he explains.

Neilson notes, however, that it would be necessary to compare bonded ADSL solutions to a single 10Mbps ADSL service from Telkom, which may also perform adequately.

Telkom has been trialling its 10Mbps ADSL service for some time now, but due to a network freeze during the 2010 Fifa Soccer World Cup will likely only introduce the product after the tournament.

MWeb, however, is taking a very aggressive approach to winning the ADSL war, notes Neilson.

“This campaign is the heart and soul of the market share war for business connectivity as a whole,” he opines.

“In the long term, when some proxy for local loop unbundling is finally implemented, the players leading in this space could be even better positioned, because they will already have the customers.”

Neilson explains this announcement means other players will step up their own product strategies, and that more announcements are expected to follow in this regard.

MWeb Bonded ADSL packages
Business ADSL 50GB 8Mbps (2 x 4 bonded) - R 2 299
Business ADSL 50GB 12Mbps (3 x 4 bonded) - R 2 799
Business ADSL 50GB 16Mbps (4 x 4 bonded) - R 3 299
Business ADSL Uncapped 8Mbps (2 x 4 bonded) - R 5 399
Business ADSL Uncapped 12Mbps (3 x 4 bonded) - R 7 999
Business ADSL Uncapped 16Mbps (4 x 4 bonded) - R 10 699

Telecoms Transformation – How to move forward?

A fascinating read by Paul Budde on his blog.

The discussion that is taking place about the trans-sectoral use of broadband is gaining momentum and many countries are now asking themselves serious questions about the future of their telecoms sector.

Until recently governments were convinced that they could separate themselves from the telecoms sector, and the key policies were focused on deregulation and privatisation. During the last few decades, however, this course reduced telecoms to the status of a commercial sector. Governments have accepted the priority placed by telcos on the interest of their shareholders and failed to understand the importance of telecoms as national infrastructure.

The Internet was a major ingredient in changing the direction of telecoms, particularly when broadband was added to the mix. In no time Internet and broadband penetration went through the roof, a clear indication that people were extremely interested in using these new technologies. More and more countries began to recognise the social and economic importance of this infrastructure. Political pressure started to emerge, aimed at governments in countries that were lagging behind in broadband infrastructure.

To read more click on the link above.....

Vodacom takes on Telkom | ITWeb

By Nicola Mawson, ITWeb senior journalist.

Johannesburg, 29 Jun 2010 Read in this storyBattle lines drawnBusiness solutionFail safeSmart moveSA's largest mobile company, Vodacom, is taking on its former parent, Telkom, as it launches an ADSL service into the corporate sector – with plans to eventually cut out Telkom's copper last mile.

The company could also try and usurp Telkom's dominant position in the residential market, but has yet to make an announcement as to whether it will launch fixed broadband to homeowners.

Vodacom's venture into fixed broadband could further unsettle Telkom, which has pinned some of its growth plans on launching a mobile offering sometime this year. Telkom has seen a steady decrease in the number of voice only fixed-lines, although its data penetration is growing.

Telkom reported flat revenue growth for the year to March, and outgoing CEO Rueben September emphasised the importance of mobile as a strategy to defend and grow its local market share. He said the company was aware of the risks of launching as SA's fourth mobile operator.

Battle lines drawn

Now Vodacom has taken the battle for market share onto Telkom's turf, in a move that could herald the first step towards fibre to the home.

Gary Hart, executive head of Managed Network Services at Vodacom Business, says the company will eventually be fighting Telkom for market share on Telkom's turf, but is currently reliant on the fixed-line operator for use of its last mile.

He explains that the offering will run on Telkom's copper access network for now, but will eventually move onto fibre, cutting Telkom out of the loop. Hart says, however, this will require economies of scale, which will be achieved as more fibre is rolled out to large corporations.

Vodacom has 11 metro Ethernet rings around the country, which it deployed for mobile backhaul. The company is now in the process of linking these rings to each other, and is using the infrastructure, which is already in the ground, to provide the ADSL backbone, explains Hart.

In addition, once the company moves its mobile network onto LTE, an upgrade to the current 3G offering, additional broadband offerings will become available, says Hart.

In future, Vodacom will expand its ADSL offerings to residential areas, although there are currently no specific dates or details available. “The launch of a residential ADSL service would be a logical response to Telkom's entrance into the mobile business,” says Richard Boorman, Vodacom executive head of corporate communications.

Business solution

Vodacom Business launched a premier business ADSL service, offering capped and uncapped offerings with speeds up to 10GB. Hart explains that the offering includes a voice over IP solution (VOIP), and businesses that buy the service are given a Vodacom 087 number.

Customers will also be able to port their landlines over to Vodacom once the company's application to the Independent Communications Authority of SA has been approved. In addition to voice calls and data, Vodacom will offer video services, says Hart.

The capped offering is available in monthly 1GB, 3GB, 5GB and 10GB packages, which are targeted at small and medium or home run businesses with a variety of options. Larger companies are offered uncapped broadband, with speeds of up to 4 096Kbps.

Both the capped and uncapped options come with a choice of being shaped or unshaped and come standard with an ADSL modem and a VOIP-enabled phone, which provides for landline-based IP calls to be made over ADSL, offering up to a 30% cost reduction on fixed-line calls.

Companies also have the option to bundle traditional voice, Internet access and VOIP into a single platform using Vodacom's private branch eXchange solution.

Fail safe

Vodacom Business uses a blend of SAFE, SAT3 and Seacom cables for international connectivity, which ensures built-in, automatic restore functions in the event of a break in any one of these cable systems.

In addition, should a Telkom cable break or be stolen, Vodacom's uncapped solution includes an optional 3G/HSPA failover.

If the line fails, the online business functions will automatically be rerouted on Vodacom's 3G and HSPA network, and put back onto ADSL once the service is restored.

Smart move

Chris Gilmour, Absa Investments analyst, says Vodacom is beating Telkom to the punch by launching ADSL before Telkom can offer businesses a mobile solution bundled with its current services.

“Telkom has been neglecting its own backyard, and other people like Vodacom have come in and are eating their lunch,” says Gilmour. He says Vodacom's strategy is “very clever” and is likely to make inroads into Telkom's most lucrative market, which is the corporate customer.

“At long last, we are starting to see the benefits of enhanced broadband availability. The more entrepreneurial companies like Vodacom are grasping the opportunity with both hands,” adds Gilmour.

Vodacom's ADSL offering;

Capped prices*
1GB at R59 p/m
3GB at R169 p/m
5GB at R279 p/m
10GB at R549 p/m

Uncapped pricing*
384kbps @ R1 132 p/m
512kbps @ R1 588 p/m
4096kbps @ R2 842 p/m

*Excluding ADSL line rental, see Web site for more details

Where to, Telkom?

[By Duncan McLeod]

Telkom is a fixed-line operator with ambitions to get into mobile telecommunications. Analysts aren’t sure it should be investing in a mature cellphone market. Do they have a point? Should Telkom be sticking to its knitting in fixed lines?

Pity whoever is appointed to replace Reuben September as the next CEO of Telkom. The new head will be inheriting a difficult business facing its biggest-ever competitive and regulatory threats.

Telkom isn’t the same company it was in the late 1990s, when, led by a foreign management team, it was able to hike prices out of all proportion, milking SA consumers for all they were worth, all the while abusing its monopoly and chasing off the slightest hint of competition.

Today, Telkom is threatened. Vodacom and MTN are demanding a piece of the action. And the industry regulator, emboldened by a department of communications that wants to see action on telecoms rates, is starting to talk tough.

With a fixed-line business that is in accelerating decline — the number of fixed lines in service declined by 4% between March 2009 and March 2010 — Telkom is turning to mobile to make up for it.

It says it will invest R6bn over five years building a second- and third-generation cellular voice and data network.

But many analysts have expressed doubt that Telkom has what it takes to take on two powerful incumbent operators — Vodacom and MTN — and a re-energised Cell C. Telkom, they say, has little or no experience in mobile, and its forays into other business areas, most notably pay-TV, have proved to be disastrous.

Now the company has lost its CEO, the very man who led the decision to offload Telkom’s 50% stake in Vodacom, a company over which it had little or no say, and to build its own mobile network.

There are real dangers ahead for Telkom. It could be the big loser if it succumbs to obvious temptation and, seeking to grow its mobile subscriber base quickly, starts a price war with the incumbent mobile players.

And there are already worrying signs that it could be distracted from its traditional core business of providing fixed lines.

Management mustn’t make the mistake of thinking Telkom can stop investing heavily in the access layer of its fixed-line network — the mainly copper-cable infrastructure that connects consumers to its core network.

If anything, it needs to be investing more heavily in the fixed-line side, replacing copper with high-speed fibre optics where it can. Fibre, not wireless, is the real future of broadband. It’s a space Telkom can own, if it has the foresight now to invest before its rivals take the market.

The company also needs to react faster to market changes. MWeb introduced uncapped broadband recently, and other Internet service providers have slashed per-gigabyte bandwidth prices. Yet Telkom hasn’t reacted. It’s like a deer trapped in the headlights.

And it’s losing broadband customers to the mobile networks — or not winning those customers in the first place. It should be up there, competing like hell to hang on to every single customer.

What the company needs now is a CEO who can shock the organisation into change. That would probably require an external candidate able to shake things up and shrug off the last vestiges of the parastatal mind-set.

Certainly, whoever is appointed needs to be visionary, empowered to take big but calculated risks.

Unfortunately, it also needs to be someone adept at managing politicians. Government has stubbornly and stupidly held on to nearly 40% of the company’s shares. This, ultimately, could prove to be Telkom’s downfall.

Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail

Stage set for battle over telecoms rates | TechCentral

The stage is set for a battle of epic proportions at public hearings in Johannesburg next week. That’s when operators will make their arguments for and against proposed cuts in wholesale call termination rates.

MTN, for one, has warned of dire consequences for its business and for the entire mobile ecosystem if industry regulator, the Independent Communications Authority of SA (Icasa), proceeds with its plans to cut mobile call termination rates to 65c/minute this year. Other operators have also lodged strong objections.

Icasa wants the rates — the fees the mobile operators charge each other and other telecommunications companies to carry calls onto their networks — reduced to 65c in July. This would follow a 36c voluntary cut by the mobile providers on 1 March.

High mobile interconnection rates have been blamed for keeping retail prices high and for keeping new competitors from emerging.

Now, MTN has gone on the offensive. In its submission to Icasa ahead of public hearings scheduled for 28 to 30 June, the company says the draft proposals “suffer from serious legal and regulatory flaws”.

Moreover, when the March rate cut is factored in, the “drastic nature of the proposal is truly revealed”, MTN says. “In fact, it represents the most aggressive mobile termination rate price control MTN has ever seen: the peak rate would fall from R1,25 to 65c in just four months, and 70% of the total 85c cut proposed by the authority would take place between March and July this year.”

The operator says the impact of too steep and unbudgeted-for cuts in one year would force it to take “dramatic cost-cutting actions in the second half of 2010, affecting not just MTN’s business, jobs and investment plans, but also its customers and the whole mobile ecosystem” of least-cost routing companies, independent service providers and distributors.

“The ‘business shock’ is further heightened by the removal, overnight, of the peak and off-peak price structure that has characterised the market for the past 15 years, with great wholesale, retail and network disruption,” MTN says in its submission.

Vodacom, though disagreeing with large sections of the proposed cut in termination rates, has taken a more conciliatory approach to the regulator. In its submission, it says it agrees with Icasa that the wholesale cost-based rate is about 40c/minute — the level the authority has proposed the rates be cut to in July 2012.

However, Vodacom has objected to what it thinks is a too-steep “glide path” — the two-year period over which the rates will come down. It says the proposed timeframe is “far too aggressive and will significantly impact on the wholesale and price structures of the SA communications industry”.

Vodacom wants to delay the first step in the proposed guide path until March 2011. “This will assist businesses to factor the new rates into their business models and decisions for the next financial year,” it says.

Like MTN, Vodacom has also questioned the process Icasa has followed in creating the draft regulations, and has warned that, if issued in their current form, would be “unlawful and open to judicial review”.

Cell C, meanwhile, has — not surprisingly — argued for asymmetric termination rates that favour it over its bigger mobile rivals. In other words, it wants Vodacom and MTN to pay it more than it pays them to carry calls between their networks.

The country’s newest and smallest mobile operator argues that higher termination rates have undermined its full potential. It has objected to being defined as an established operator with significant market power for the purposes of regulation, alongside the likes of Vodacom, MTN and Telkom.

“The use of asymmetric mobile termination rates for an interim period will promote competition in the long run in the SA mobile market as this will enable Cell C to grow its market share and become a more effective competitor,” Cell C says.

— Duncan McLeod, TechCentral

South African cellphone facts revealed

Staff Writer MyBroadband | 14 June, 2010

If you feel like you spend half your day on your cellphone, you have this in common with as many as one in six South Africans.
Dial Direct recently ran an online, independent survey to gain greater insight into South Africa’s cellphone habits, and the findings showed an interesting swing towards the use of cellphones for social media.

Respondents were asked questions including:

1. How much time (on average) do you spend on your cellphone per day?
2. Which function is most important to you above and beyond phoning?
3. Do you use your cellphone more for social purposes or business?
4. Do you prefer talking or SMSing?
5. Do you frequently use your cellphone to access social networking sites, and, how important is your cellphone to you?

Time spent on the cellphone

18% of the respondents said they spent more than five hours a day on their cellphones, while just over a quarter put that figure at four hours. 56% of respondents indicated that they used their cellphones for two hours every day.

Functionality

Apart from making and receiving cellphone calls, sending and receiving SMSes ranked as the most important functionality offered, with 58% respondents indicating that this was the case.
Just over 30% of respondents indicated that email was the most important function after making calls. Far fewer indicated that they used their cellphones predominantly for its camera (after making and receiving calls).

Business and pleasure

A high proportion of respondents (63%) indicated that they used their cellphones for social purposes only, while 37% said they used their cellphones for both social and business purposes.

Talking vs SMSes

Of those surveyed, 72% reported that they preferred talking on their cellphones to sending SMSes.

Social networking

When asked about whether or not they used their cellphones for social networking, 121 respondents said they did, while 90 said they did not.
The vast majority of respondents indicated that they subscribed to Facebook, with 12.5% of respondents using their cellphones for Twitter, and far fewer for MXIT and banking.

The importance of connectivity

135 of the respondents told Dial Direct Insurance that their cellphones were very important to them, while 69 people remarked that they were ‘necessary’. Just 2.3% of respondents said their cellphones were not important to them.

“This survey provided very interesting and useful results about cellphone usage in South Africa,” said Dial Direct Insurance’s spokesperson, Bradley Du Chenne. “It is evident that South Africans make full use of the technology their cellphones offer, and that the cellphone is a vital form of communication in terms of both business and leisure.”