Headaches 'uncapped'

ADSL South Africa (Broadband South Africa), 26 November 2007

It seems that the offering of uncapped local ADSL Broadband leave most if not all reseller ISPs with ‘uncapped’ headaches at this stage.

It is no secret that Telkom Internet ‘…recently started trialing their uncapped local bandwidth service for ADSL subscribers’ (Uncapped local ADSL – larger ISPs give their views, MyBroadband, 22 November 2007). This left many reseller ISPs with proverbially speaking: ‘uncapped’ headaches.

What seems to be the problem?

Uncapped ADSL service not viable for resellers.

‘Pre November 2005 all ADSL subscribers had the benefit of uncapped and free local bandwidth, but the new service from Telkom Internet will most likely mean that subscribers will have to pay for any local usage after being capped’ (Uncapped local ADSL – larger ISPs give their views, MyBroadband, 22 November 2007).

‘The general problem for all reseller ISPs is that local bandwidth is still charged for at wholesale level. The profit margin for ADSL services is also low which means that a free, uncapped ADSL service is not really a feasible option for reseller service providers’ (Uncapped local ADSL – larger ISPs give their views, MyBroadband, 22 November 2007).

‘Telkom currently charges around R 12-00 per GB for local bandwidth, and with low profit margins – especially on 1 GB ADSL services – SAIX reseller ISPs will soon run at a loss if they offer free uncapped local bandwidth’ (Uncapped local ADSL – larger ISPs give their views, MyBroadband, 22 November 2007).

In other words, it is simply not cost-effective for reseller ISPS to offer a free uncapped ADSL service at this stage.

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