Telkom faces fixed-line flop | ITWeb

Telkom is losing fixed-line customers at a faster rate in comparison to previous years, according to Business Monitor International's (BMI) latest report on SA's telecommunications sector.

In its fourth quarter report on the local telecoms market, industrial research group BMI envisages a total decline of 3% in landline usage. The research group says SA incumbent Telkom, in its results for the financial year ending 31 March, reported a decline in demand for prepaid PSTN lines.

According to BMI, this had been an important growth area for the operator.

Cellular takeover

Telkom spokesperson Pynee Chetty says the decline is “simply because of the uptake of mobile phones”.

Pieter Kok, a senior research analyst at IDC, agrees, saying Telkom will continue to experience a decline in the number of landline users, primarily due to people becoming more used to making their voice calls from a mobile phone rather than a fixed line.

“I see the trend being irreversible because of the dramatic increase in cellphone usage over the years”, says Kok.

He adds that the perception people have about Telkom is the other reason why customers are shunning the fixed-line operator. “Generally, the public has this perception of Telkom as being expensive while offering poor service to the clients. It is going to be a mammoth task for the fixed-line provider to change the public's view of it.”

Stiff competition

From a broadband point of view, Kok says there are more attractive mobile broadband options than Telkom's ADSL. “I can't really say the fixed line will soon be obsolete, but people are becoming less and less dependent on it.”

Cell C said this week it will unveil faster broadband in the form of '4Gs', which is an improvement on 3G, although not full 4G, as the standard hasn't been clearly defined by industry. Kok says he doesn't see Telkom fixed-line competing with this.

Telkom recently upgraded its network and now offers customers ADSL speeds of up to 10Mbps.

Presenting its financial results for the year ending 31 March, Telkom said the continued competitive pressure in the voice market had resulted in the decline in traffic revenue streams. “This is as a result of our drive to offer significant value through annuity products, managed network services and virtual private networks, which shifts traffic revenue into other revenue streams”.

The fixed line operator added that market penetration, which was at 9.1% in March 2009, had dropped to 8.7% after a year.

Growth spurt

BMI says SA's broadband penetration rate had seen an increase from the close of 2009 to the fourth quarter in 2010. “Subscriber base was around 1.12 million at the end of 2009. This is equivalent to a penetration rate of 4.3%”.

The firm adds that during 2009, the SA broadband subscriber base expanded by over 185%, and attributes much of this growth to the rapid increase in the number of mobile broadband customers.

“By the end of the year, mobile broadband customers accounted for 70% of the total market,” says the report.

For 2010, BMI also anticipates SA's broadband development to experience 50% growth, enabling the penetration rate to reach 6.4% by the end of the year.

Focusing on the 3G subscriber base in SA, BMI forecasts the mobile market on the whole to remain static during the last quarter of 2010.

This trend, notes the report, will partly be a reflection of moves by the operators to deduct inactive prepaid customers from their reported totals.

A disturbance in the force | TechCentral

[By Nathaniel Borenstein]

The Internet is quietly being replumbed. That shouldn’t surprise anyone involved with it; the Internet is always being replumbed. But you might be more surprised to learn that the next few years will bring an unusual burst of changes in that plumbing, some with great potential consequences for anyone who relies on the Net.

By its plumbing, I’m refer to the protocols and software that make the core features of the Internet work. These have been evolving steadily since 1969, but I don’t think any period since the early 1980s has experienced as much change as we’ll see over the next few years.

Like anything new, these changes will bring both threats and opportunities, but in this case probably more threats than opportunities. Each critical part of your infrastructure is potentially at risk from any fundamental change in the infrastructure, and we are looking at several such changes in succession.

The next big things;

DNSSEC — For years experts have warned that the domain name system, one of the most important subsystems on the Internet, is at risk from malicious actors. All sorts of schemes are possible if you can hijack someone else’s domain name. DNSSEC makes domain hijacking much harder and, as a result, makes it more reasonable to trust the identities of Internet sites. It is the foundation for a more trusted Internet.

After years of work, a milestone was reached this year when the root domain was signed with DNSSEC. Over the next few years, more and more sites will try to protect their identities and reputations with DNSSEC. The potential for breaking older or unusual DNS implementations can’t be ignored, but any organisation that has a lot invested in its domain name should consider using DNSSEC to protect it from hijacking, and to reassure end users.

IPv6 — The Internets protocols were designed to facilitate what almost everyone thought was an absurdly big network — over 4bn computers. Less than 30 years later, we all know (as I said in 1983, mostly to dismissive laughter) that the 4bn addresses enabled by IP version 4 (IPv4) are not enough. To keep the net from fragmenting, to facilitate universal communication, and to avoid having the Internet’s growth stop dead in its tracks, it is essential that the world convert to IPv6.

Adoption of IPv6 has been slow, but there’s a good reason to expect that to change: halfway through 2011, the supply of IPv4 addresses will simply run out. There are all sorts of half-measures and hacks that can postpone things a bit further, but by now it’s clear that the future of the Internet requires IPv6. Despite the many person-centuries of work that have gone into IPv6, the transition is highly unlikely to be smooth and painless for everyone.

International e-mail addresses — For as long as there has been Internet e-mail, addresses have been limited to the ASCII character set. Spanish speakers can’t use the letter “ñ” even if it’s part of their name, and Germans similarly have to do without their “ö”. They’ve been remarkably patient with what is, from their perspective, a gross inadequacy in e-mail standards. But the people who have it worst, of course, are the Asians, all of whose characters are forbidden in traditional e-mail addresses.

After many years of wishing, arguing and working, the Internet Engineering Task Force (IETF) is closing in on a solution. Internationalised domain names (the right-hand side of the e-mail address) have been a reality for a little while now, and the IETF has been tackling the final bit, the left-hand side. This turns out to be much harder than it sounds because of the problem of backward compatibility with the old standards and all the old mailers in the world.

The solution is going to be ugly, but functional. New encodings map ugly strings like “xn--bcher-kva.ch” onto desired internationalised forms such as “Bücher.ch”. Ideally users will never see the ugly forms, which are designed to be backwards compatible, but inevitably they sometimes will. Worse still, sometimes it may be impossible for a user of older software to reply to e-mail from someone with an internationalised address.

The bottom line: we’ll be going through a period during which e-mail will probably not be quite as universal, or as stable, as we’re accustomed to it being. Anyone with responsibility for software that processes e-mail addresses will need to make sure that their software doesn’t do horrible things when these new forms of addresses are encountered.

DKIM — The fight against spam is unlikely ever to end because the miracle of Moore’s Law — the same miracle that gives us ever smaller and more powerful computing devices operates in favor of the spammers. Every time we get twice as good at detecting spam, they are able to generate twice as much spam for the same price, which means that the good guys are running on a treadmill, needing to work continuously just to avoid falling behind.

One manifestation of that hard work is the DKIM standard (for “Domain Keys Identified Mail”), which specifies a procedure by which organisations can publish cryptographic keys, and sign all their outgoing mail, thus making it somewhat easier to be sure where some messages really originate.
It’s far from a cure-all, but it has the potential — particularly when paired with as-yet-undefined reputation systems — to make it easier to detect spam with forged sender information, the issue at the heart of the “phishing” problem.

DKIM has been in development for several years now, and is now progressing well through the standards process.

It should be mostly invisible to end users, but it will keep mail system administrators busy for a while. As they learn to configure their outgoing mail for signatures, and to check their incoming mail for signatures, there is a strong potential for destabilising the e-mail environment in general. The most likely symptom will be mail that just doesn’t reach its intended recipient.

Reputation services — High on nearly everyone’s list in the wake of technologies like DKIM are reputation services — trusted parties that can tell you if a message is signed as being from Joe.com and whether Joe.com is known for sending spam or other bad things over the Internet.

Though there are no standards for reputation services yet — and though they are undeniably needed — we can already see the risks and benefits by looking at the non-standardised reputation services in use today, notably blacklists of e-mail senders. These are incredibly useful, but there is a never-ending stream of problems with organisations that get added to such lists inappropriately and the administrative difficulties of getting them removed promptly.

Similar considerations will surely apply to the standardised reputation services of the future — no such service can be any better than the support organisation that deals with exceptions and problems. Any progress with reputation standards should be expected to be accompanied by transitional pains as the reputation service bureaus mature and develop good or bad reputations themselves.

What can customers do?

Make no mistake: the coming improvements to the Internet’s plumbing are a very good thing. But the implementation of each of them brings with it the potential for destabilising various aspects of the Internet infrastructure, despite the heroic efforts of the IETF to minimise that risk. Vendors can increase or reduce the risk through their quality of implementation. What can customers do?

Paradoxically, the answer is to do more by doing less. The biggest risks are inevitably found in the least professionally administered software and servers. The big cloud providers with the staff of crack programmers and administrators are at the least risk because they understand the risks well enough to take steps far in advance.

But that specialised application that your predecessor commissioned 10 years ago, and is now running more or less autonomously on an ancient server in your headquarters, could represent a huge risk.

Basically, the risk is highest where the least attention is being paid. So the best thing that most organisations can do in preparation for the coming instabilities is to use them as an excuse to clean house a bit: decommission old applications that aren’t being maintained, outsource anything you can plausibly outsource to a bigger IT shop, and allocate a few programming resources to pay attention to the ones you can’t decommission or outsource.
Of course, it can’t hurt to ask your cloud provider or outsourcer what they’re doing to prepare for the coming changes, but if they act surprised by any of them, it may be time to consider a new provider.

Ideally, the coming Internet disturbances should be viewed as an opportunity to streamline some of your oldest, least maintained, most idiosyncratic infrastructure. In a world where there are professionals who can run most of your applications for you, locally or in the cloud, it’s probably time for your organisation to move beyond worrying about these kinds of changes.

Decommission the old stuff, outsource whatever you can, and the coming problems will largely be problems for someone else, not you. And that’s about the best you can hope for as the Internet endures these growing pains.

Nathaniel Borenstein is the chief scientist for Mimecast. Previously, he was a distinguished engineer for IBM Lotus Division

Business Continuity for Telecoms Expense Management

Today the importance of business continuity for TEM [Telecoms Expense Management] really hit home for me.

What prompted my thinking was a conversation with a colleague around a national hotel chain in South Africa; to whom we provide our TEM Solution. He had just finished his first meeting with the new IT Manager. I asked him how it went?

Now picture yourself as a new IT Manager for a large hotel chain trying to get to grips with Strategy, Management, Measurement and Implementation of Telecoms Expenditure over a large geographical area.

Where do you start? Especially considering that the entire management team had recently left.

Well in the first meeting my colleague had sat the IT Manager down and walked him through a high level view of everything he needed to know about the group’s telecoms requirements; from -

• Documented strategy and procurement policy for telecoms
• Suppliers and their SLA’s
• Business need
• A summary of the last 12 months worth of reporting
• Current implementation plan and future requirements for new hotels

All of this backed up with 12 months reporting and an intimate knowledge of the group’s business need.

The IT Manager had walked into a job where the encumbent had left him a structured and well managed Telecoms infrastructure with a solutions partner who catered for this exact eventuality and ensured that no matter who the role player was, they would be able to pick up where they left off.

The lesson for me is that without a TEM solutions partner this would have been difficult to accomplish and documentation would have been open to intrepretation. Businesses cannot afford to take the risk alone anymore. Skills in South Africa are hard to come by and with a mobile workforce your risk in the area of continuity is high. Most importantly, it takes time to build up these partnerships and get the knowledge in place. Sometimes years as opposed to months!

We advocate that you cover your business risk by partnering with a TEM solutions provider who knows how to ensure you get that continuity. And much like our other customers, your ROI will be higher than if you attempt to do this yourself.

Peter Walsh
Cape Town - July 2010

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