Collective Cuts The Cost Of Bandwidth For Isps
The Age
Tuesday February 8, 2000
SMALL ISPs are being offered cheaper Internet bandwidth and ``contra" deals by a new South Australian collective.
Set up as a private company in Western Australia, Satix (www.satix.net) claims to be about to cut bandwidth prices for its members from 14-15 cents per megabyte to three to four cents.
Satix's managing director, Garret Krampe, said the company now had 66 service providers in the collective.
He said he had managed to aggregate their bandwidth requirements to a total of 8Mb/ second; 5Mb of that had been tendered out, at the much lower price, to various providers, including satellite providers and large telcos.
Satix charges an administration fee for the work. It does not plan to apply for a carrier licence but will set up its affairs so that member companies that do have licences help fulfil the regulatory requirements. It is also helping its members arrange network peering to cut costs and find ways to combine their business to get economies of scale.
For instance, one member in Melbourne is providing IP address advertising of a large block of internet (IP) addresses managed by Satix, so members can channel traffic through a range of carriers, leading to lower prices and greater carrier indepedence.
Krampe said he came up with the idea of Satix after working in the wholesale bandwidth business for Paradox Digital
He said there was still not enough competition in Australia to make the large carriers drive down prices and there was little incentive for companies like Telstra to drop prices to smaller ISPs, which were essentially their competition.
If smaller companies did not band together, there would only be a dozen or so ISPs that could survive, he said.
Satix is set up so that member companies take a stake for a $500 joining fee, then pay an annual charge. About a third of members are metropolitan ISPs.
© 2000 The Age