Technology that allows low-cost, high-speed data transfer over regular telephone lines is unlikely to get the nod in SA anytime soon. Could Digital Subscriber Line (DSL) services, which are able to carry voice, data and video simultaneously, be seen as the key to jumpstarting e-commerce growth in the region?
"The cost of running an e-commerce infrastructure using digital telecommunications technologies like Diginet or ISDN are much higher than DSL for a potential 2 Meg transfer rate, which runs on existing analogue network infrastructure," says Stuart Hardy, GM access solutions at Internet Solutions (IS).
Telkom has indicated that DSL will not be made available to subscribers until the middle of next year, but industry observers are not confident that there will be any rush to introduce it even then.
Says Hardy: "The introduction of DSL could affect Telkom and a second fixed-line network operator`s bottom line in that it would erode the revenue streams provided by more expensive Diginet and ISDN services, but it may not be significant."
DSL is capable of providing the high capacity data transfer speeds that are becoming critical in business - particularly e-business, but the bottleneck will then become the service provider where the costs of backbone bandwidth will not change even with the introduction of DSL. Hardy says a lack of bandwidth, or aggressive costing, is putting the brakes on e-commerce for smaller businesses in SA.
DSL is a local loop technology aimed at consumers and small businesses. It employs asymmetric bandwidth and efficient use of the available frequency spectrum on a pair of copper wires, connecting a home or small office to a local telephone exchange, to allow high speed downloads and lower speed uploads.
But DSL has as many shortcomings as it does successes.
The real problem with DSL is that it does not address backbone bandwidth pricing or restrictions. For South African Internet users, the bulk of the cost is in the national and international lines making up the Internet. This cost is unaffected by DSL. This relates in the same way to international bandwidth where the low cost of DSL will have no effect on pricing. The infrastructure that connects consumers or corporate to their respective providers, is usually the least expensive component of their Internet access cost.
While DSL will undoubtedly be offered at a price point lower than diginet, it also offers a lower quality of service and the potential for greater technical problems. This is because DSL service deteriorates with distance and a number of other factors such as crosstalk.
Crosstalk is a phenomenon that occurs when multiple physical carriers such as copper wire run a close proximity to each other in a cable bundle or wiring closet, creating mutual interference. Because of crosstalk problems, the first few users on a DSL service will experience no problems, but problems may start to occur as the number of users increases.
Clients with mission-critical electronic business who cannot afford significant downtime need to consider their options carefully before moving to DSL. In addition, as with analogue modems, many of the high bandwidth figures quoted for DSL are only possible under optimal conditions and users may find themselves rarely achieving the claimed connection speeds.
For this reason it seems unlikely that DSL will significantly erode Diginet revenues. It is more likely that the vast majority of DSL users will be upgrades from analogue telephone lines rather than downgrades from diginet.
"The introduction of DSL will have an effect on the cost of access circuits in SA, but not substantial enough to make a real dent in bandwidth costs in SA due to the cost of long haul local and international backbone infrastructure. This cost reduction will have a greater benefit to small businesses and therefore could have a positive effect on the e-commerce arena in SA as a whole."
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