The shake-up in the ADSL arena, with Telkom?s new pricing structures, and the introduction of more effective usage control measures from next month, is putting some SAIX-selling Internet Service Providers (ISPs) in a difficult spot.
A number of these ISPs have been selling 30GB products to their customers at a similar price to the 3GB capped service that the ISPs receive from Telkom, because no effective capping measures were in place.
This means that, from November, ISPs will have to find a way to tell these customers that the price for the 30GB service will increase dramatically.
According to Steven White, new product development executive at Telkom: ?In the current situation, our 3GB service in effect allows for international and local bandwidth for up to 3GB. When the cap is reached, customers? international bandwidth is suspended, but they still receive unlimited access to local bandwidth. This was how Telkom bills ISPs, according to the 3GB service. Some ISPs saw a loophole and sold their customers a 30GB service at very low prices, around R500.?
White says that Telkom?s new usage-based bandwidth offerings, and the introduction of hard caps on services, will put a stop to these practices by some second-tier ISPs. ?A benefit of the new pricing structures will mean that ISPs will have to start managing their customer usage better,? White says.
This, he notes, will allow for better flexibility, and could even result in cost savings for second-tier ISPs, if managed correctly.
A number of ISPs are not happy. In e-mails on the Internet Service Provider Association (ISPA) mailing list, there have been considerable discussions regarding the issue.
According to InterExcel CEO, Marius Venter, some ISPs believe that this has been a ploy from Telkom, and say that Telkom knew that it would happen, and that there was no "future" in its product.
He notes that they are asking questions, such as whether Telkom did this to get more ISP clients on a project basis, or maybe to score short-sighted points over other first-tier ISPs, such as UUNet and Internet Solutions (IS).
According to Rupert Bryant, a manager at WebAfrica -- an ISP that is advertising 30GB services for R500 (US$77) on its Web site: ?We are busy changing this, and we are in discussions with stakeholders and various entities to address the issues. It is, however, difficult to do, and there is not much we can do now.?
He adds that the company will do everything in its power to give its customers the best deals possible when sorting out this issue.