Okay, so this last week streaming cloud company Gakai announced that they’ve now launched a streaming app for PC games on Facebook, allowing gamers who don’t have the kind of hardware required for playing their favourite games on High to access the entire experience via their desktop browser. While this isn’t a new idea, I’m going to rather look at why its not the money maker it should be, for now.
Pictured: Game streaming, clearly not working.
I’ve been writing articles and columns about the state of Internet access in South Africa for a while now. I’ve lamented the monopoly of Telkom, and the drastic changes to the landscape since major cables like Seacom and EASSY have landed in the country. ADSL is becoming cheaper to subscribe to and maintain, but too many people are still left high and dry – including me. And it’s beginning to piss me off in a big way.
Yes, I live here. Roughly. About 2km from this spot. More or less.
When someone says Netgear, the first thing that comes to mind is an ugly pearl white router with a flimsy-feeling aerial and basic functionality. I’m happy to report the WNR3500L is none of these things. But does that make it any good?
Well, the looks are a major plus, a sleek glossy black finish looks smooth and refined, while the square shape and absence of an external aerial makes sure this is a router you’d be proud of displaying.
Looks aside, all we really want from a router is performance and functionality, and this NETGEAR seems almost to define that. Wireless N support, 4 gigabit LAN ports, and a WAN port for connection to the modem are all you would expect from a mid-range router in this category. However the WNR3500L has a trick or two up its sleeve. The first is a USB 2.0 port that allows you to plug an external hard drive into the router, turning it into a NAS that any PC on the network can access as storage. 
While the USB 2.0 speeds are slightly limiting, it’s a good idea which got plenty of use during the time we had the WNR3500L for review. The other handy feature is the “Press ‘N Connect” button. Pressing this allows the router to setup and connect to wireless devices in range and despite some early trouble, it worked as stated.
The other huge benefit of the WNR3500L is that it runs on the OpenRouter open source firmware, which as routers running on DDWRT firmware have proven, adds a wealth of functionality to power users. The other plus side is, as the OpenRouter community grows, the WNR3500L router will gain new features and have a far greater support base than NETGEAR alone.
All in all then, a good investment if you already have a modem and plan on extending your networks functionality with wireless N and Gigabit capability, not to mention a NAS.
Bottom line: Small and stylish, offering ease of operation for the novice, and plenty of features for the power user. 9/10.
Last week Telkom started upgrading its 4Mb/s customers to 8 and 10Mb/s respectively. Those in areas that had ADSL2+ exchanges that had been upgraded or built on Vodacom’s metro Ethernet network woke up on Monday happily surprised at their new speedtest results.
We assume that Telkom will eventually upgrade it’s 384 and 512 subscribers. Those will receive a boost this year, but no information has come to light about how much it will improve. 384 could move up to 512, and 512 could go up to anything near 4Mb/s. Hell, I’m on a 3G connection, and I still get better speeds than either of those two*.
*If you can really call it better, that is.
My beef with Telkom these days is the long wait. We’re ranked so far down the ladder in terms of average speeds that we don’t even register a blip on the radar of the top 10 countries with the fastest connection in the world, and it’s all thanks to “South Africa’s Leading Telecommunications Provider”. Yeah, you’re forgetting that you’re the only one, jackass. We’re being fed scraps of the potential that Telkom has, and they’re perfectly satisfied sitting there and making us pay heaps for a connection that would cost the same as a good meal out. And do they still think we’re blind?
I don’t pretend to understand the nuances of running such a large enterprise the size of Telkom, but there are some numbers that I think are applicable here.
In South Africa around 5,300,000 people are connected to the Internet as of a 2009 survey, over 1.5million which use ADSL. Thanks to the line speed upgrades, it has been revealed that 19,400 users on the 4Mb/s lines are due for an upgrade at the moment, the equivalent of 2.9% of the entire 4Mb/s ADSL subscriber base. And it’s only for those who sync at near full speed.
Cheap bandwidth does kinda help, but it's not helping. Urdoinitwrong!
I had a huge argument planned about how easily Telkom could afford to upgrade everyone, what with all the riches they’ve been accumulating over the years (apparently they’re going broke now, eh?) but I realize I’m just farting against thunder; I mean, what could I achieve here, one solitary technical writer on the NAG Online block? It begs the question as to what the other 4Mb/s users who don’t even sync at 3Mb/s will be getting in the long term. Stability? Full Sync speed? Lower prices? Or will they suffer as they always have, paying for double the service that they’re actually getting?
I’ve never been one to defend Telkom, and I’m absolutely not going to become one who does either. They need to catch a wake-up and see that the rest of the world has progressed far beyond what they’ve achieved here. Perhaps the impending leadership change might do some good, but I’m not holding my breath. Telkom only jumps when it wants to impress other countries, it seems, so what does that say about its loyalty to the userbase?
Oh, right. Food for thought.
The answer to the above depends entirely on your idea of what uncapped is, but for the sake of transparency let’s all agree that uncapped (read: unlimited) means that a user has unlimited bandwidth, and can download as much as he/she wants. Are we on the same page here? Good.
However, the current uncapped accounts are not uncapped, at least not in the sense that we have just settled on. Somewhat justifiably so, people are complaining about this, but I don’t think this is the underlying issue. Personally, I think people are missing the point here.
When MWEB first announced their uncapped offers they specified that according to their Acceptable Usage Policy, the new accounts are not for heavy downloaders. These are for the users that previously found themselves topping up their cap every month, and wanted a flat rate that would accommodate their usage — not the guys who sit on torrents all weekend. Those users are already accommodated for by current uncapped packages provided by ISPs such as Axxess, MWEB, and Webafrica, and they continually download large amounts of data each month. It’s completely acceptable, therefore, that they pay ± R1,000 for downloading the equivalent of my entire hard drive in a week.
Downloading the internet? Stay on your expensive accounts.
Let’s take a step back and think about this: those same people are the ones who have now recently subscribed to the new uncapped accounts, and still expect the same level of service. Oh, gee, you wonder why you are now throttled because you downloaded 40GB over the weekend? Let’s do some maths then…
The average Axxess Uncapped Express+ user on a 4Mb/s line downloads 400GB a month. Those people pay R2,699 for that privilege. So…
R2,699/400GB = R6.75/GB
At close on R7 per gigabyte, that’s a pretty good deal, as currently the cheapest per-GB deal is sitting at R29. But try download that amount of data on the new Axxess uncapped account for R496.
R496/400GB = R1.24/GB
Has anyone been laughing at Webafrica’s “unsustainable” comments? Well, they’re right. There’s almost zero money being made here on this account with that kind of usage. There’s no way any business will survive running on less than R1.50 per GB. Naturally, all of the ISPs have forseen this, and have adjusted their AUPs accordingy.
The internet landscape is now a melting pot of wordplay, bad ideas and greedy users - yup, its still the same!
Previously Afrihost specified 200GB as a threshold, after which your account will be subject to scrutiny and throttling.
R497/200GB = R2.49/GB
They immediately saw how people used their lines for heavy downloading. They charged pro-rata for users who signed up before April, and some got up to 120GB in two weeks.
R147/120GB = R1.23/GB
After a few changes to their AUP, they’ve come clean and decided on 60GB as the new threshold, after which you will be heavily throttled.
R497/60GB = R8.28/GB
You may want to complain about it, chuck your toys out the cot and move elsewhere, but you’re complaining about absolutely nothing… because nothing has changed.
In fact, very little at all could have changed.
All that these companies are doing is selling you the same package from their premium uncapped accounts, but they’re charging you more for it. MWEB was the first to realize this, and others quickly followed suit. None of you heavies will realize this until it’s too late, but for those of us who download less than 60GB a month, this is perfect.
If you want to complain, it will get you <-this-> far, I can guarantee you. Now will you people please rejoice for internet that costs less than R10 a GB?
Seacom is going to be one of the best things to happen to South Africa. We’ve now been stuck with Telkom’s ridiculous broadband prices for more than a decade, and it finally looks like things are shaping up. Lets have a look at a few companies that are now offering low-cost bandwidth direct from Seacom:
DIGICHILLI
A new company, Digichilli seems to be on the warpath by offering a rather unusual package. Starting from R499 for their 384Kb/s uncapped package, they allow two concurrent connections on one account. In short, two ADSL lines and modems in separate areas can use the same account. These lines can be at home, you can have one at work and home, and you can even have one at your friend’s.
That’s right, Digichilli lets you share the account with a friend if you so wish, definitely a huge feature that’s sure to bother a few competitors. Connections start from 256Kb/s line speed and use burst mode to boost your speed to 384Kb/s. This is different because Telkom drops their 384 DSL users to that speed when trying to sync to their interchanges. This could mean that users possibly won’t suffer from sync problems as their speeds are throttled.
SCREAMER TELECOMS
An established company with its finger in the WiMAX and WiFi markets (with a good degree of success), Screamer offers uncapped ADSL from R399 per month. That may seem like a bargain, but I’m pretty sure there’s a trade-off involved. Users on the Mybroadband forums have been experiencing some problems and slowdowns with double NAT translation, but other than that, there doesn’t seem to be a catch… yet. They also carry the lowest per-gig prices, beating out Afrihost by R6. As time passes, Screamer’s WiMAX offering may even beat out conventional ADSL as more people sign up.
AFRIHOST
Afrihost is credited with starting the current price war by advertising its no-contract, no-catch R29 per gig ADSL package just over a month ago. The special is still on at the moment, but when compared to Screamer’s offering, it looks like they’ve been beaten already. Being Afrihost, they probably have a trick or two up their sleeve, though, so watch this space.
TELKOM
One might not think it, but Telkom have also slashed prices to fall in line with their competitors. While their “Do One” package remains unchanged, the “Do Two” and “Three” have now changed to the “Do Three” and “Winston Special”. So, the company actually remains a very good option, as the Winston Special is good value for money.
Inevitably, people will ask which is the best option. While Screamer and Digichilli share the prize for uncapped ADSL, the best option looks set to be Telkom’s Fastest DSL 4Mb/s line coupled with Screamer’s 5GB of data. This works out cheaper than uncapped 384Kb/s, and if you run out of cap, its only an extra R23 per gig. For the online or casual gamer, this is definitely a very attractive online gaming option. We won’t have to worry about Steam download sizes for much longer.
We all hate the fact that cellular phone calls are so expensive, but have you ever given any serious thought as to why? We have some of the most expensive call costs in the world mostly due to high interconnect rates. The interconnect rate is what telecommunication companies charge each other when a call from an external network is terminated on their own network.
In the early 1990s, before Cell C entered the market, Vodacom and MTN had an interconnect rate of around 20c per minute. This was judged to be fair, and was based on a cellular market a lot smaller than the one we have now. Yet when Cell C entered the market, the peak interconnect rate was raised to R1.25 a minute. That’s an increase of over 500%. Why would the interconnect rate need to be increased? With growing economies of scale, it really should not have.
The answer is simple. A high interconnect rate severely disadvantages smaller players in the market. When you are a smaller player, the majority of calls placed will be off-net calls and with a high interconnect rate, there is very little in the way of wiggle room with regards to prices; dropping the call rates below the interconnect rate just isn’t feasible. Dropping on-net rates will have a negligible effect on attracting clients, as a small user base does not make cheap on-net rates attractive.
Research ICT Africa Director Alison Gillwald suggested an interconnect rate of R 0.25, instead of the current peak-time cellular interconnect rate of R 1.25 per minute. He said this was a conservative figure which leaves a fair margin for profit.
Vodacom generated R8.63 billion through interconnection in South Africa for the financial year ending 31 March 2009, up from R7.94 billion a year ago. This is the company’s second largest revenue stream after “airtime and access”, and is far higher than the R5.97 billion generated through data services, or the R 5.19 billion from equipment sales. For the financial year which ended December 2008, MTN generated R6.95 billion in interconnect revenue, up from R6.34 billion for the previous twelve months. Similarly to Vodacom, it is also the second largest revenue generator for MTN, after airtime and subscription revenue. MTN’s interconnect revenue is more than its data and SMS revenue (R3.59 billion) and cellular telephone and accessories sales (R3.12 billion) added together.*
ICASA and the Parliamentary Portfolio Committee on Communications have been making a lot of noise lately regarding the interconnect rate. Whether anything actually gets done is another matter, as ICASA is generally seen as a toothless regulator. One also has to question why the government is now so interested in dropping the interconnect rate after government’s cash cow, Telkom, no longer has shares in its cash cow – Vodacom.
The next few months in the telecommunications industry will definitely be interesting to watch.
*Interconnection figures via MyBroadband
The next undersea cable planning to steal our hearts is the East African Submarine Cable System. The project is expected to be completed by the end of June 2010. EASSy is well under way with 40% of the cable construction already been completed.
EASSy is a consortium of 27 operators building an open access international fibre-optic submarine cable, comprising Botswana Telecommunications Corporation, Bharti, BT, Comoros Telecom, Etisalat, Neotel South Africa, France Telecom, Mauritius Telecom, MTN International, Saudi Telecom, and Sudan Telecom.
Similar to Seacom, EASSy will travel along the East cost of Africa with 9 cable landing stations, namely, Port Sudan, Djibouti, Mogadishu, Mombasa, Dar es Salaam, Moroni (in Comoros), Toliary (in Madagascar), Maputo, and Mtunzini (where Seacom will also be landing).
At first glance, EASSy will only be connecting African countries together. What many of you may not know is that EASSy will also connect to the Europe India Gateway Submarine Cable System. The EIG will stretch from the UK to France, Spain, Portugal, Gibraltar, Monaco, Libya, Egypt, Djibouti, the United Arab Emirates and, of course, India.
The cable’s purpose is to provide a central linking point for other cable systems already in the pipeline, such as Eassy and the West African Cable System (WACS). EIG will be the first direct, high bandwidth, fibre optic cable connecting United Kingdom to India. EIG will have a capacity of 3.84 terabits per second and has upgradeable transmission facilities to provide for future bandwidth growth.
All this bandwidth would be useless without a terrestrial network connecting the cables to actual end users and businesses. Last month Cameroon’s incumbent Camtel announced that it would build a 5,600km national fibre backbone, with links to Gabon, Congo-Brazzaville, and Equatorial Guinea. The World Bank will be providing financial assistance for these links as well, also funding links to Chad, Central African Republic, and DRC.
Orange Madagascar announced that it had completed the Lion cable project. The 1,800km cable offers 1.3 Tbps, connecting Madagascar, Reunion, and Maritius. The cable should cut existing tariffs by five times.
Here in the good ol’ RSA, we also have progress. Dark Fibre Africa has recently launched its 800km fibre network in collaboration with Cisco Systems. Dark Fibre Africa is not a service provider, though. It owns, builds, maintains, secures, and monitors the dark fibre network, leasing out the infrastructure. Any businesses wanting to make use of the DFA network will need to light the fibre themselves, meaning they will need to purchase the necessary equipment to be able to connect to DFA’s network.
In January, Neotel announced it would partner with MTN to build a 5,000km national network linking major urban centres with Seacom, with the first leg of the network connecting Johannesburg to Durban scheduled to be completed before the end of the year.
Neotel already has 2000- 3000km of fibre in the metro areas of Johannesburg, Pretoria, Durban and Cape Town. The financial burden of the long-haul network is expected to be R2-billion on cabling alone(transmission equipment will bring the cost to R2.5-billion), a cost that Neotel will share with MTN and Vodacom.
Ladies and gentleman, welcome to the second half of 2009! I know many of you out there have been waiting patiently for this period, because this is when it all happens. What exactly happens, I hear you ask? Launches!
The previous three months have been what we call the “Dry Season”. Just as heavy rain is seasonal, so are games, computer parts, and leaps in technology. I don’t know why exactly it is like this, what with every single company deciding to release their products at the same time. It’s like rush hour in Joburg every single day; you’d think these people would have learned by now that leaving at the same time every morning means you won’t go anywhere fast; and it’s the same with these companies. Surely releasing products in the Dry Season means you’ll sell more, don’t you think? But I’m getting carried away here. So, what can we look forward to?
If you are running Build 7000 of Windows 7, chances are that it is shutting down as you read this. If not, you can all rejoice in the release of Windows 7 in retail stores around the world on October 22. Mark your calendar for this month, it’s going to get really hectic! Around this time we can expect Nvidia and ATI to release their DX11 graphics cards, and it’s expected they will also have transferred successfully to the 40nm process. Intel will also, by this time, have a working sample (and press releases galore) of a processor on the 32nm fabrication process. If it’s anything like the 45nm generation, we’ll have a lot of fun with these babies.
This is MSI's P55 motherboard, which made its debut at CES 2009. Pricing is expected to be in the R1800 - R2200 range, firmly planting it in the reach of most mainstream buyers.
In October as well, Intel will be releasing the Core i5 range and the P55 chipset designed for the new range. Sporting dual-channel DDR3 memory and an integrated memory controller, i5 is the successor to the Core 2 Duo range and will likely be priced at the same levels. What’s confusing about this though, is the new strategy Intel has in store to differentiate their chips for consumers. Is it better? I don’t really think so. It’s supposed to be easier for consumers to understand, but honestly it even took me a while to catch on – I’ll cover it in my next column. We’ll still see some new LGA775 processors from Intel, although these are probably going to be revisions of current chips more than anything else.
I might as well mention AMD: they’re also releasing a bunch of new processors as well as some revisions to their mobile chip offerings. Seacom is also landing and being tested this month! Neotel, the company that was in charge of the Seacom landing in South Africa, will be one of the first to release its new pricing structures in the coming weeks, as well as services in cities where there previously was no coverage.
So, there’s something for everyone to look forward to. I can’t wait for my copy of Windows 7, along with my new laptop and… God of War III!
The big news this week is that Seacom has been delayed by a month due to pirate activity in April and May 2009.
According to the Seacom blog, an increase in pirate activity in April and May 2009 has necessitated a change in their installation plans, which will result in a delay of around a month.
The launch date has been moved from 27 June 2009 to 23 July 2009.
Seacom is still making progress, though: that section of the cable has since been completed, and the section connecting Mumbai to Africa is expected to be spliced shortly. All the South and East African landing stations have already undergone successful testing.
90% drop in bandwidth prices? EASSyer said than done.
When Seacom was first announced, a 90% drop in bandwidth pricing was claimed to become a reality. We’ve already seen about half of that drop, though. Keep in mind that bandwidth costs aren’t the only costs that ISPs have to deal with: there are quite a few overheads. It costs the same to administer a 1 gig account as a 100 gig one, so pricing on the lower end won’t drop. One must also keep in mind the costs of the network provider’s infrastructure, the cost of the customer’s modem, as well as marketing, distribution, and support.
The large ISPs can’t switch all their bandwidth to Seacom the minute it goes live, as they have contracts in place which need to lapse, meaning that price drops are even further away than we might like.
Telkom’s pitiful announcement gives a painful taste of what the telecommunication companies intend to satisfy us with. They claim that there is too much pent-up demand and that EASSy and MAINONE are needed before we expect a real drop in pricing.
In February, general data manager at MTN Brian Seligman said “we are going to see changes in pricing [as opposed to real decreases], we are going to see changes in structure, and one of the biggest misnomers out there is that these international cables landing are going to drop the price of data by 90%”.
Head of Commercial at iBurst, Steve Briggs, has also been quoted as saying “consumers should not expect to see the sharp falls in broadband pricing that some of the more optimistic commentators have predicted”.
MTN’s Seligman says, “You are going to see different ways of packaging; you are going to see some incredibly innovative ideas from MTN over the course of this year in terms of making data significantly more affordable, significantly less expensive for customers, and that basic R2/MB – that’s not going to change significantly in the foreseeable future.”
Unfortunately there’s no real reason for ISPs to drop bandwidth costs. The vast majority of subscribers do not even deplete their current 2GB limits, so instead of dropping prices extra data will be bundled keeping revenues high, similar to Vodacom’s current data deal.
