IPC pricing cut benefits IS customers

Internet Solutions (IS) today announced changes to the company's wholesale and business DSL offerings, following the 30% reduction in Telkom's IP Connect (IPC) charge recently announced by the Independent Communications Authority of South Africa.

“The IPC charge is the single largest cost incurred by ISPs when provisioning fixed broadband services, as it accounts for 60% to 70% of the total cost,” explains Sean Nourse, executive for connectivity at IS.

“While this means that a 30% reduction in the IPC charge does not equate to a 30% reduction in the overall cost of DSL, IS is offering its business customers and reseller channel significantly more in terms of value and savings.”

Following this announcement, IS will now offer direct business DSL customers, value channel partners and wholesalers on the IS Extreme per GB capped service additional bandwidth at the same price.

“For example, customers who have the 5GB offering will be bumped up to 10GB, as we are passing the direct benefit of the IPC cut on to them in the form of additional bandwidth,” he says. “This will be done on a sliding scale, as we aim to pass on more than 30% in savings or value wherever we can.”

IS customers on the Cruiser uncapped offering will enjoy significant discounts of up to 49% on the 1024Kbps service.

“In terms of our commercial offerings to partners and wholesalers aimed at the consumer market, we have passed reduced wholesale rates on to our reseller channel so consumers and end-users should expect to see this filter through in the coming weeks,” continues Nourse.

“Our customers on uncapped offerings of 1Mbps or lower will enjoy a decrease in rates of up to 53%, while uncapped DSL clients on higher speed packages, which are generally prone to higher usage, will enjoy significant improvements when using bigger volumes of data instead of reduced rates,” he says.

The IS 4Mbps uncapped service, for example, has been upgraded to allow up to 10Mbps, offering customers value in excess of the discount received from Telkom.

Nourse explains that IS is not offering cost reductions across the board as bandwidth-hungry users get greater value by receiving more bandwidth and an improved service.

“In the products where there is fair use, we can pass on both service and cost benefits,” he says. “In the wholesale market, we are also offering some aggressive price discounts so that our partners can go out there and hopefully gain increased market share.”

IS is also using the 30% saving to reinvest in its network and make changes to improve network efficiency and performance.

“We have just deployed a PoP IPC node in Cape Town, which means that all Cape Town DSL traffic no longer has to be routed up to Johannesburg. This means that a Cape Town customer communicating with another customer in the same region will enjoy a faster service and better quality,” continues Nourse.

IS will also be launching a Durban PoP IPC node in the next few months to improve network quality and performance in that region.

“The adoption and use of DSL broadband is still growing rapidly in South Africa as businesses and consumers are using the Internet for a growing number of services. The move to cloud computing, and the increased adoption of IP-based communications and collaboration services require more bandwidth, improved network performance and reliability. With the reduction in the IPC charge, we are now able to provide DSL customers with cheaper access to the local loop, which is having a material impact on the market, as it enables customers to use more of these services. As such, we urge IS clients to contact their IS account managers for final pricing and to find out how these changes will impact them,” concludes Nourse.