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Players clash in a cyber war zone


2008-02-26

The local internet market is changing as fixed line and mobile service providers and network operators encroach on each other’s turf.
THE dynamics of the local internet services market are changing dramatically as fixed line and mobile service providers and network operators encroach on each other’s turf.

For example, wireless application service providers traditionally buy bulk mobile data capacity and SMSs from cellular operators and bundle small packages with facilities such as chat rooms and bulk SMS distribution for their customers.

“But operators are offering hosted services direct and are cutting prices, for example 20c an SMS,” says Manny Moreira, CEO of EdgeEvolve.

As a result there is little or no margin for the wireless application service providers.

On top of this, publishers and other companies are now offering content on their own websites and are buying bulk SMSs directly from the operators instead of going through a service provider, he says.

Any company that has a large customer database can deal directly with the network operators, buy SMSs in bulk and generate revenue from the premium rate charged to customers, says Moreira.

He says internet service providers (ISPs) are also under pressure because the network operators are starting to offer competing hosted application services, developing new applications so they can integrate their traditional web-based services with mobile delivery.

Moreira says in retaliation, the wireless application service providers are extending their reach into internet services.

He says EdgeEvolve has set up a centre that delivers business applications over the internet to any device, including cellphones that have web capabilities.

It includes e-mail delivery, chat rooms and allowing companies to extend their customer service help desks to the mobile phones, he says.

“Users can interact with these services by using a miniature web browser on their phone,” says Moreira.

Danie Fourie, director of XDSL, says smaller ISPs looking for growth are increasing their competitiveness by adopting a consultative approach, including an analysis of the customer’s infrastructure and equipment recommendations.

They also offer value-added services, such as proactive monitoring, network management, troubleshooting and automation, he says.

This is differentiating them from larger ISP organisations that only provide the internet connection at a per-gigabyte rate, he says.

If the service goes down or slows to a crawl, smaller solution-oriented ISPs will go out of their way to find the root of the problem and resolve it, not just check that the router is functioning and then blame Telkom, says Fourie.

They will interact with Telkom on behalf of the client, physically check the lines at the exchanges, check the client's network and pinpoint bottlenecks and other problems, like viruses, he says.

Colin Thornton, MD of Dial a Nerd, says the uptake of mobile internet options like 3G or iBurst in the local market has exceeded expectations and international norms.

He says the unreliability of Telkom is the largest contributor to this trend, but the increased mobility of South African small businesses is a close second.

Access to e-mail from cellphones is also gaining popularity, and reduced mobile data costs, larger cellphone screens and improved software are making this easier.

“But there is still a lot of space for improvement and market uptake in this segment, so watch the space.”

In the fixed-line arena, the number of service providers now offering ADSL connectivity options is good news for users. This is likely to result in decreased costs, increased value added services or both, says Thornton.

However, with no-frill ADSL services that are extremely cheap, users can end up with very little support and be left to set up their routers and e-mail accounts themselves.

At the other side of the spectrum, more expensive services come bundled with on-site or off-site support and CDs that guide the user through the set- up process, says Thornton.

Gian Visser, MD of Afrihost.com, says more individuals are creating their own websites and blogs, with their own domain names, largely due to the growing popularity of social networking.

In addition, the tools that come with website hosting services are easy to use, he says.

“If you can use Word you can design and publish your own website and have it up and running in a day.”

He says within the next few years most of today’s internet surfers will have their own websites with their own domain names registered.

Individuals who do not want to be left behind should therefore register their domain name as soon as possible, says Visser.

“There can only be one www.johnsmith.co.za,” he says.

Source: My Broadband
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