TELKOM ADSL PROBLEMS

1
TELKOM ADSLPROBLEMS SOLUTIONS

• by
• Rudolph P Muller
• MyADSL

2
OVERVIEW

• Today I will present you with numerous facts,
  all well documented and
• referenced, and easily defendable. There will
  be many figures and
• graphs that will explain why we are unhappy and
  feel that ICASA
• should intervene. I will touch on many issues,
  but the basic solution to
• most of these problems is
• END ADSL connectivity rental !
• Please note that connectivity rental is also
  known as line rental and it is the R599 charged
  to supposedly pay for the DSLAM port.

3
MyADSLs Presentations

• Introduction
• Telkoms statements and the Truth
• Problems with the ADSL service
• The Solution
• Closing remarks

4
INTRODUCTION

• This introduction represents the views of our
  members. We have over 3500 members represented
  by MyADSL and these views are the ideas of a
  large chunk of the broadband community.
• We do not want to be depicted as anti-Telkom
  are would like to say at the very start that our
  intention is to help Telkom improve their ADSL
  services. The way to do this is to END
  CONNECTIVITY RENTAL. We once again at this
  hearing open our forum to Telkom with the hope
  that they will join the debate.
• We appreciate the opportunity to discuss this
  matter with both ICASA and Telkom through this
  hearing and hope to make this great resource
  available to more people.

5
INTRODUCTION

• I will start with a basic argument with which
  most people agree
• The South African Government and the general
  public would all benefit from a greater uptake of
  broadband in South Africa and bridge the digital
  divide.
• - President Mbeki http//www.mybroadband.co.za/
  nephp/?mshowid125
• - Department of Communications
  http//www.sabcnews.com/politics/government/0,2172
  ,101984,00.html
• There can not be a massive uptake with the
  current over-pricing of ADSL. The current price
  is gt 50 of the average SA salary. This makes
  ADSL a privilege of the elite.
• Prices must be reduced drastically before we see
  growth of broadband in SA.
• Telkom is not willing to drastically reduce the
  price of ADSL, even though they show billions of
  rands in profit.
• The only solution to ensure the goals of
  President Mbeki, the DoC and South Africa as a
  whole is to force Telkom to lower its prices.
  This means putting an end to the unnecessary
  connectivity rental. It is here that, you,
  honoured counsellors, can step in.

6
INTRODUCTION

• Who is MyADSL and why we want to help to achieve
  the objectives of President Mbeki, The DoC and
  other South Africans.
• MyADSL is an information and discussion website
  with more than 3500 members, mainly South African
  broadband users. We share information, assist
  other users and try to work with relevant
  organizations to improve broadband in South
  Africa. We have representatives from most other
  providers on our discussion forums, actively
  assisting users and working with them to provide
  a better service.
• Most of the people that have made/will still make
  presentations at this hearing are financially
  strong enough to afford ADSL. They are the
  privileged few. They are willing to offer their
  time and other resources to try to make ADSL
  affordable for people that are not as privileged
  and help ensure a better service that will place
  us on the international broadband map.
• Unfortunately Telkom sits in the other corner,
  with many highly paid experts, trying to ensure
  that they DO NOT have to provide customers with
  the service they want, and to NOT lower the price
  to a level where we will be able to service South
  African broadband needs. Why not work with us
  Telkom? We are, after all, your customers,
  paying for you to sit here. You might as well
  spend the time to try and accommodate our needs
  rather than trying to refute them. You have
  responsibilities other than your shareholders and
  huge profits! Who are you protecting in these
  hearings?

7
INTRODUCTION
A very important concept that I will use
throughout this presentation is the fact that the
Internet is a global arena. Here it becomes
senseless to speak of local performance. As a
simple comparison one can compare the Internet to
the Olympic games. While an athlete might be the
best in his/her own country, they can be so slow
that they simply cannot compete against the
worlds best. We therefore have standards, to
ensure that the athletes that attend the Olympic
games are not much poorer than the other athletes
that compete. In my presentation I will show
you that Telkoms ADSL would have not even come
close to making the Internet Olympic Games!
Action from ICASA the Government is needed.
Telkom are currently a monopoly looking after
their shareholders. To sell inferior services at
high costs ensures massive profits (as we have
seen). The shareholders are happy, but who looks
after the customers?
8
TELKOM STATEMENTS

• Telkom has tried very hard in their written and
  oral presentation to defend their high pricing,
  poor ADSL offerings and lack of international
  competitiveness.
• Please spare a thought for the Telkom
  representatives, it is certainly not an easy task
  defending a service 15 times more expensive than
  an international offering that is far superior to
  yours. Both use exactly the same technology.
  Can anybody think of another excuse apart from
  You cannot compare us with any country
  internationally?
• In this part of the presentation I will touch on
  a few of their claims and statements and show
  that it is not always as accurate as one would
  like them to be.

9
TELKOM STATEMENTS

• Page 2
• Telkom Telkom has not increased the prices of
  ADSL
• Truth Telkom has increased the price of the ISP
  portion of ADSL in the beginning of 2004. From
  the TelkomSA website http//www.telkomsa.net/new
  s/pricesheet.jsp
• Product name  Old price  New price 
• ADSL ProLog monthly   219.00   249.00
• ADSL - ProLog Plus monthly   239.00   269.00

10
TELKOM STATEMENTS

• Page 3
• Telkom For customers with bandwidth intensive
  communication needs (e.g. such as peer-to-peer
  applications), these access methods would not be
  sufficient and other products, for example
  Telkoms Diginet products, would be more
  appropriate.
• Truth ADSL is designed to support the typical
  home user who frequently downloads large amounts
  of data from Web sites and P2P networks
• http//compnetworking.about.com/od/dsldigitalsubs
  criberline/g/bldef_adsl.htm

11
TELKOM STATEMENTS

• Page 4
• Telkom ADSL enables upload speed of up to 256
  Kbps and download speed of up to 512 Kbps
• Truth ADSL is technically capable of up to 6
  Mbps (roughly 6000 Kbps), but ADSL customers in
  practice obtain 2 Mbps or lower for downloads and
  up to 512 Kbps for uploads.
• http//compnetworking.about.com/od/dsldigitalsubs
  criberline/g/bldef_adsl.htm

12
TELKOM STATEMENTS

• Page 4
• Telkom Customers have the option to use their
  high speed access to connect to any ISP of their
  choice.
• Truth Most ISPs are simply reselling Telkoms
  ISP accounts.
• Telkoms price of R 259-00 per month makes it
  virtually impossible for ISPs to compete
• ISP wholesale price R 190-00 ex VAT
• Telkoms retail price to customers R 218.42
• For this R28-00 of possible profit the ISP must
  provide the customer with email, web space and
  support. And let us not forget that Telkom also
  gets a nice R 600-00 extra for ADSL connectivity
  rental.

13
TELKOM STATEMENTS

• Page 4
• Telkom The capping of 3 Gbyte was always a
  condition of the product offering applying to all
  ADSL subscribers and enforced by all ISPs
  providing the service
• Truth Telkom enforces it, not the ISPs, as
  pointed out by Mr. Rehmet from IS after Telkoms
  presentation

14
TELKOM STATEMENTS

• Page 4
• Telkom Capping of the service ensures that
  customers enjoy the true ADSL experience of fast
  Internet
• Truth Many international ISPs provide uncapped,
  superfast ADSL where users can truly experience
  ADSL! An example is Earthlink in the US (up to 3
  Mbps)
• http//www.earthlink.com/dsl/
• or Force9
• http//www.f9.net.uk/info2/whatisadsl/adsl_faq3.h
  tml?f9_sessionb36771342ff7f6ae4eef0a34b616ab5d

15
TELKOM STATEMENTS

• Page 11
• Telkom Telkoms ADSL service was never
  intended for bandwidth hungry applications, such
  as gaming or online trading, such applications
  use large bandwidth, hence affects the bandwidth
  that is available for usage by other customers.
• Truth Telkom calls it broadband. Broadband
  (and ADSL) was specifically designed for these
  applications http//www.microsoft.com/hardware/b
  roadbandnetworking/10_concept_broadband.mspx
• Now more than ever, the Internet offers a vast
  array of rich experiences, as you access complex
  information and share your own creations online.
  For example, you can
• Stream continuous audio and video Listen to
  Internet radio stations, watch news videos, view
  independent films, and more.
• Play online games Increase the challenge and
  excitement of your gaming experience.
• Download movies and music to your computer.
• Share digital photographs with friends and
  family.
• Collaborate with co-workers all over the world
  Transfer reports, artwork, and other files back
  and forth to colleagues anywhere.

16
TELKOM STATEMENTS

• Page 12
• Telkom The residential or business line rental
  is suppose to cover the cost of the copper line
  to the customers premises for basic telephonic
  services and Telkom believes that there is no
  duplication of line rental
• Truth A ridiculous statement.
• From Telkoms feedback to ICASA on 12 March
  2004
• On the aspect of the cost of line rental (this
  time ADSL!) we advise that the additional rent
  over and above the Internet costs
• Therefore two line rentals Phone services and
  for ADSL This is therefore duplication.

17
TELKOM STATEMENTS

• Page 12
• Telkom Telkom is already incurring losses on
  the access portion
• Truth Telkom stated in its feedback to ICASA
  that we advise that the additional rent over
  and above the Internet costs, covers the ADSL
  port cards.
• A port card costs between R 300-00 and R 600-00
  ONCE OFF.
• R 600-00 per month connectivity rental, means
  that they make a profit immediately after the
  first month.
• prices in the 70's per port for a fully
  qualified and well supported DSLAM
• http//www.dslprime.com/News_Articles/news_articl
  esojr.htm

18
TELKOM STATEMENTS

• Whole document and presentation
• In the whole document and presentation Telkom
  refers to its ADSL service as broadband, but then
  it says that it was not designed for high
  bandwidth applications. Let us see what
  broadband is
• A term for high-speed, high-capacity Internet
  and data connections.
• http//www.google.co.za/url?saXstart10oidefi
  neqhttp//www02.sbc.com/DSL_new/content/1,,45,00
  .html
• Broadband refers to communications medium that
  uses wide-bandwidth channels for sending and
  receiving large amounts of data, video or voice
  information.
• http//www.google.co.za/url?saXstart12oidefi
  neqhttp//www.glossary-of-terms.net/glossary-cel
  l-phone-terms-definitions.html
• So what is Telkoms ADSLbroadband or not?

19
TELKOM STATEMENTS

• Page 18
• Telkom 88 of Telkoms ADSL customer base has
  expressed an overall satisfaction with the
  service
• Truth On many occasions, we have asked Telkom
  to release the original questionnaire and
  results, but in over a year we have had no
  success. Lets therefore look at other public
  polls. Many independent website polls were
  conducted, and the results were as follows
• Ananzi http//www.ananzi.co.za/
• As an ADSL user in South Africa, are you
  satisfied with the service?
• Total 721 votesYes 10No 83Undecided 7

20
TELKOM STATEMENTS

• Page 18
• Telkom 88 of Telkoms ADSL customer base has
  expressed an overall satisfaction with the
  service
• Truth Other public polls tell a different
  story. The results on our website were as
  follows
• MyBroadband http//www.mybroadband.co.za/
• Do you think the price for ADSL in South Africa
  is fair?
• Total 876 votes
• Yes 1
• No 98
• Uncertain 1

21
TELKOM STATEMENTS
Oral Presentation Telkom defends its position
by saying it should be compared to the wireless
broadband providers like Vodacom3G, Sentech and
WBS. This is as ridiculous as comparing cell
phones with fixed line (standard) telephones.
The technologies are completely different! We
should actually commend the wireless providers
for being brave enough to compete with a very
cheap, mature technology like ADSL.
22
ADSL PROBLEMS

• Cost
• Lagging behind Internationally
• Capping
• Speeds
• Port Prioritization

23
COST
Many speakers have already pointed out that the
cost of Telkoms ADSL is exorbitant and seriously
hampers the uptake of broadband in South Africa,
I will simply show you why these statements are
true and relevant. It is also noteworthy that
over 80 of web users have indicated, in an
online poll, that the cost of ADSL is the main
facet they feel ICASA should address. Let us
consider some interesting facts and figures
regarding Telkoms ADSL service.
24
COST ADSL Connectivity Rental
International Comparison Random first and third
world countries from North America, Europe, South
America, Asia, Australasia and Africa were
selected. Here are the findings United States
No ADSL Connectivity Rental United Kingdom
No ADSL Connectivity Rental Australia No
ADSL Connectivity Rental Brazil No ADSL
Connectivity Rental Egypt No ADSL
Connectivity Rental Japan No ADSL Connectivity
Rental South Africa 71 of Total Cost is ADSL
Connectivity rental! NB Please note that ADSL
Connectivity Rental and ADSL Line Rental refers
to the same thing. Do not be confused when
Telkom plays with the term line rental and
ADSL connectivity!
25
COST Basic Monthly Cost

• International Comparison
• To calculate these figures the basic monthly
  cost was used. Since Telkoms DSL512 Unshaped is
  the only true broadband service, we have used
  this service as an internationally comparative
  service. You will see many different figures, but
  we are confident that this is the most accurate
  comparison. Please feel free to ask for a
  comprehensive explanation.
• United States R 189-00
• United Kingdom R 118-00
• Brazil R 226-00
• Australia R 339-00
• Egypt R 263-00
• Japan R 228-00
• South Africa R 1495-00

26
COST Basic Monthly Cost

• International Comparison

27
COST Total High Usage Cost

• International Comparison (High BW Usage)
• To calculate these figures the basic monthly
  cost was used, and a bandwidth usage of 30 Gigs.
  Since Telkoms DSL512 Unshaped is the only true
  broadband service, we have used this service as
  an internationally comparative service.
• United States R 189-00
• United Kingdom R 118-00
• Brazil R 226-00
• Australia R 339-00
• Egypt R 263-00
• Japan R 228-00
• South Africa R 7208-00

28
COST Total High Usage Cost
International Comparison
29
COST Percentage of Average Income

• International Comparison
• These figures give an indication of what
  percentage of his/her income an average citizen
  of the particular country will have to spend to
  get ADSL. In this comparison we compared
  unshaped ADSL services, and were lenient enough
  to not take Telkoms very small cap into account.
• United States 1
• United Kingdom 2 (with the new offerings it is
  only 1)
• Brazil 16
• Australia 6
• Egypt 36
• Japan 1
• South Africa 105

30
Line Rental Comparison
512 Shaped Comparison Basic Monthly
Cost Connectivity (Line) rental versus No
Connectivity (Line) Rental
It is clear Stop ADSL Connectivity Rental to
make South Africa more competitive internationally
31
Lagging Behind Internationally

• Since the Internet is an global environment, we
  have to stay in touch with other countries
  regarding connectivity.
• The services must stay within a certain range
  regarding price, speed and general service
  delivery.
• South Africa, for example, saw no reduction in
  price during 2003 and 2004. Globally ADSL prices
  plummeted. While Telkom therefore boasts that
  their prices stayed the same, they are actually
  admitting to keeping costs artificially high.
• http//news.zdnet.co.uk/communications/broadband/0
  ,39020342,39117243,00.htm
• In Europe, for example, DSL prices fell by over
  23 annually!
• http//www.theregister.co.uk/2004/11/23/broadband_
  report/
• By using an advanced broadband rating system,
  MyADSL rated the ADSL services from various
  countries. This system compares price,
  reliability, speed and numerous other factors.
  It was developed using prior research from
  respectable organizations like the Australian
  Government and MIT.
• The results were disastrous for Telkoms ADSL
  services.
• Best in SA, but far behind globally
• http//www.itweb.co.za/sections/internet/2005/0501
  181113.asp?STelecomsATELOFRGN

32
INTERNATIONAL COMPARISON
We feel strongly that Telkom should be forced to
stay within an acceptable limit of the other
international offerings. If ICASA is interested
in this research or would like to develop a
system of their own we will be glad to help.

TELKOM
33
CAPPING

• The 2G, 3G and 4G caps are extremely restrictive
  and prevent growth of various online industries
  in South Africa, including online gaming and
  video streaming.
• Mr. Nothling went to great lengths to explain the
  capping comparisons, and I can simply confirm
  that the cap should be drastically increased.
• Let us have a look at the internationally capping
  comparisons

34
SPEEDS

• South Africa needs to stay in touch with other
  countries regarding speed if we would like to
  ensure that we can use all the Internets
  offerings and compete in this environment.
• We are falling behind because of the lack of
  speed!
• Current maximum speeds for the countries used in
  this report are
• United States 3 Mbps
• United Kingdom 8 Mbps
• Brazil 2 Mbps (Uncertain)
• Australia 8 Mbps
• Egypt 2 Mpbs
• Japan 50 Mbps
• South Africa 0.5 Mbps

35
PORT PRIORITIZATION SERVICE

• An unshaped service should certainly not cost
  around 3 times the price of a shaped service (see
  Mr. Nothlings submission for more detail).
• These high prices make it very difficult for
  South Africans to experience true broadband.
• A transparent contention ratio policy should be
  one of the minimum requirements.
• Contention ratios of 201 to 501 are standard
  in international offerings.
• A SLA forms a basis when selling a service and
  should state the contention ratio.
• SLA Service Level Agreement

36
SOLUTIONS

• Stop connectivity rental on ADSL!
• This practice is unheard of internationally
• It creates an environment where it is very
  difficult for other ISPs to compete
• It lifts the ADSL price in South Africa to
  unaffordable levels
• It seriously hampers the growth of broadband in
  South Africa
• This will stop possible anti-competitive behavior
  like cross subsidization between the line rental
  and ISP portions of the ADSL service.
• While there are many other issues like a higher
  cap, transparency regarding contention ratios,
  higher speeds, we must start with the biggest
  evil Eliminate connectivity/line rental on ADSL

37
CLOSING REMARKS

• Thanks again to ICASA for these hearings and for
  giving MyADSL an opportunity to state their case.
  I think you will find that practically all the
  individuals and companies spoke with one voice.
  In this great democracy it is certainly too
  powerful a voice to ignore.
• We, once again, offer Telkom a hand of friendship
  and an opportunity to work with their customers
  to improve their ADSL service. We are your
  customers, and although you might think you need
  to protect yourself against us, we are truly
  committed to improving ADSL in South Africa and
  bringing broadband to the masses. We can
  certainly be your greatest marketing toolmake
  use of it!

38
APPENDIX

• Countries and ISPs selected for this
  presentation
• United States Earthlink http//www.earthlink.
  com
• United Kingdom UK Online http//www.ukonline.
  net/broadband/
• Australia BigPond http//www.bigpond.com
• http//www.amnet.com.au/
• Egypt Menanet http//portal.menanet.net/
• Japan YahooBB http//bbpromo.yahoo.co.jp/
• Brazil Brasil Telecom http//www.brasiltelecom.
  com.br/
• http//www.dslreports.com/forum/
• South Africa Telkom http//www.telkom.co.za

39
END
? And please do not forget END ADSL
connectivity rental!