Internet body disputes price announcements
INTERNETBy BiztechAfrica - Aug. 18, 2012, 3:32 p.m.
By John Churu, Gaborone, Botswana
The Botswana internet Services Provider’s Association (BISPA) which is the only industry body in the country that looks after the collective interests of the internet community, has rejected the recent pronouncement by the government that there has been a price benefit to Internet Service Providers.
“We feel, however, compelled to respond to recent press announcements that there has been a price benefit to ISPs of 59% as a result of WACS capacity. We find these statements are factually incorrect and unfortunate in the way they created false expectations in the market,” said a BISPA statement.
According to the BISPA: “BTC announced a reduction in the wholesale price of bandwidth by up to 59%. Unfortunately none of the announced products has been reduced in price by this much. The majority ISPs who will be purchasing on a 3 year basis will, at best, make a saving of 30-46%.”
It added: “As BTC is aware, the wholesale price of is only one component of the cost of providing internet services, they should therefore have been sensitive to this fact and clearly identified that the percentage quoted do not translate into percentage discount on the retail prices.”
The organisation said a good example of a cost calculation must be factored in is the continued devaluation of the Botswana Pula. Since BTC passes the foreign exchange losses to ISPS every quarter, and since consumers do not expect to pay higher prices to absorb theses costs, price reductions such as these help in buffering this cost. “Therefore, understanding the above explanation, BISPA anticipates that the actual retail price reduction will be the 10% to 15% range.”
BISPA added that there has been no announcement of reduction in the wholesale ADSL bandwidth prices from BTC. The wholesale ADSL price is the price that BTC charges to ISPs who resell their ADSL service and therefore one would expect, since BTC’s input costs have been lowered, there should be some percentage discount which they would pass on to ISPs, which would then allow ISPs to reduce the prices on ADSL.
“ADSL subscriber should note, and as an example, on the lowest priced product, that the internet portions or their ISP charges only contributes perhaps 46% of their overall bill. 54% is actually what they pay directly to BTC and again, this price has not been reduced,” complained the local internet body.
Accordingly, the new pricing will only be available to ISPs who sign a new contract with terms that many ISPs find irresponsible to contract under. Even though BTC’s announcement stated that the changes would be effective from 1st of August 2012, their letter made it clear that pricing would not be available until at least several weeks later.
“Further delays in receiving these prices are also anticipated as each ISP and collectively as BISPA we try to negotiate the terms of the contract to be more in line with acceptable practice,” explained BISPA.
MORE INTERNET NEWS
Virtualisation ‘frees up innovation budget’Virtualisation allows for the ICT budget to shift its focus from maintenance to innovation – a benefit that is resonating with CIOs across the continent, says Ravi Bhat, VMWare’s new Regional Director for Sub-Saharan Africa. Read More
Safaricom revamps site for the visually impairedSafaricom has launched a revamped corporate website that will be fully accessible to Visually Impaired Persons. Read More
SEACOM partners with Akamai TechnologiesSEACOM has announced a new partnership with cloud service provider Akamai Technologies, and is deploying Akamai content clusters and caching nodes on its Pan-African IP network footprint. Read More
Online nutrition calculator aims to boost kids’ healthNestlé Kenya, through its MILO brand, has unveiled a web based nutrition calculator to help foster healthy nutrition among kids. Read More
Mozambique joins Alliance for Affordable InternetMozambique has become the first SADC country to join A4AI, and the third developing country to sign an MOU with the Alliance, joining Nigeria and Ghana. Read More
Intelsat managed broadband service for VodacomIntelsat is to provide a managed broadband service to Vodacom in sub-Saharan Africa. Read More
ICANN, ZACR sign landmark dotAfrica agreementThe May 2014 commercial launch of dotAfrica is now a fait accompli with the signing of the final outstanding paperwork today. Read More
ITU: Broadband can solve global development gapBroadband must be recognised as the vital development enabler in post-2015 UN Sustainable Development framework, says a Dublin meeting of the UN Broadband Commission. Read More
UBA Kenya Bank mulls listing, launches virtual savingsUBA Kenya Bank has announced in launching its virtual savings account that it is considering listing on the Nairobi Stock Exchange. Read More
FEATURED STORYKenyan shift to Green Economy would generate USD 45bn by 2030
Kenya’s transition to a green economy could produce major economic benefits equivalent to an estimated USD 45 billion by 2030, a new study shows.
BEST READ NEWS
IN DEPTHE-waste threatens Ghana’s beaches
Many beaches in Ghana, already stressed by pollution and poor maintenance, are now facing a new threat: e-waste.