MyBroadband has an article on the proposed Neotoel consumer pricing info, and in my opinion, it is very competitive. But, as Phathu loves to say, South Africans love to complain.
Reading the forum discussion, it seems what Neotel (or for that matter Telkom) needs to provide is fibre to the premises, uncapped, high speed broadband, and all for less than R500! Sorry - but that is not only unrealistic in the short term - but it is also clear that many people just do not know how expensive it is to roll out telecommunication infrastructure.
As I work for a ICT company in South Africa, I have first hand knowledge of how expensive it is to build infrastructure. Just some raw figures - it costs approximately 1 million rand (if you are lucky) to lay one Km of fibre. That does not even include the costs it will take to process the admin required to dig across numerous roads and pavements. Fibre to the home ... forget it anytime soon. And don't forget the switches ... a low end switch for fibre networks easily costs a few hundred thousand rands. Then, one should not forget the emergency power supplies (always important in South Africa), the security measures and the costs start multiplying very quickly.
I have done the calculations (as part of my job) ... if a company is to roll out telecommunication infrastructure, across all the major cities in South Africa, charge about R1000 per month for a 1 Mbps link, they will need 30 000 subscribers on average over 5 years to just break even. And this would be for a wireless network (like WiMax or iBurst or something similar).
As for international bandwidth - it costs a lot because there is scarcity. Until the new cables come into operation, do not expect Internet prices to drop. And even with new cables, it will take time for prices to drop - under sea cables are expensive to lay and even more expensive to run and maintain.
In one of his early books, the late Arthur C Clarke argued that once there are enough satellites in space covering the globe, global communication would become almost free. What he did not obviously take into account was the price of maintaining global connectivity, and the bandwidth required for YouTube, HD Video or even Web 2.0.
2 comments:
It's difficult to believe that it can actually cost that much. I hope it does eventually get better.
interesting points you bring out there. but surely much more established telcos can afford to take a knock of laying down fibre to the home and subsidising this for the subscribers because in all honesty, they can. and in so doing, they can re-gain popularity with the general public. it will be sad to see how these telcos will catch a wake up (read: slowly wither away) once the novices pronounce their shinny new high speed backbones...
but then again, i am not in the telecoms industry...
-S.
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