Bandwidth Bar beats price barrier

The cost of doing business is getting cheaper for ISPs, with a bandwidth price war driving down prices. Bandwidth Bar, a network company that specialises in providing ADSL to resellers who then provide ADSL accounts under their own branding, is leveraging this factor to provide low-cost, value-added services.

Says Bandwidth Bar MD Barry Botha: “Telkom Wholesale has launched ADSL Lite, a product that enables resellers such as ourselves to supply uncapped ADSL accounts. Bandwidth Bar gets a wholesale price from Telkom and sells unshaped, shaped and local bandwidth to virtual ISPs.”

But the lower cost of bandwidth is not the only advantage that Bandwidth Bar provides. Explains Botha: “We give resellers a whole lot of additional tools and functionality too. For instance, we have introduced new utility where you can lock down a telephone number for a specific user, so no-one else can connect to that account from another telephone number, which makes it more secure.”

Botha observes that many ADSL users are unhappy about the quality of service they receive. This is because uncapped solutions suffer from relatively low speeds, as this level of service relies on high contention ratios and port shaping to make it a worthwhile business proposition for ISPs.

Says Botha: “The only way that ISPs can make money on an uncapped service is to oversubscribe it. On the Telkom infrastructure, you get contention ratios of 20 to one, which is very good. However, the Lite product is not a business level service - it's for the customer who doesn't care about speed.

“We are very competitive on price, which means that our resellers can restructure the uncapped offering. But there is always a charge per gig on an ADSL service that we must pay to Telkom.”

As Botha elucidates, the uncapped market works through structuring accounts according to average use. “Most users want to know that they can use as much bandwidth as they like without getting a higher bill at the end of the month. Users typically draw a lot of bandwidth at first, but when the novelty wears off their usage generally drops. With the Telkom Lite service, ISPs can structure it according to the average amount of use across the user base.”

Botha predicts that ADSL prices will fall further in the future, but that the market will only benefit from real competition if Telkom gives up its last-mile connectivity.

“If Telkom unbundles and gives ISPs access to the local Telkom exchanges, then prices will drop,” he says.

In the meantime, Bandwidth Bar is providing an optimal service to smaller ISPs and other organisations that wish to leverage the low cost and useful functionality of its products.