Safaricom doing away with its unlimited Internet bundle
QueenB Feeling the pressure...this is good for the competition.:-) Why Unlimited Internet is a Big Revenue Drain for Operators<http://tommakau.com/2012/04/19/why-unlimited-internet-is-a-big-revenue-drain-for-operators/> The announcement by Safaricom that it’s doing away with its unlimited Internet bundle did not come as a surprise to me. I had discussed the historical reason behind the billing model that is used by ISP’s and mobile operators in a *previous blog post here<http://tommakau.com/2011/02/14/free-lunch-ending-for-isp-customers/> * in Feb 2011. The billing model used in unlimited Internet offering is flawed. This is because the unit of billing is not a valid and quantifiable measure of consumption of service. An ISP or mobile operator charging a customer a flat fee for a size of Internet pipe (measured in Kbps) is equivalent to a water utility company charging you based on the radius of the pipe coming into your house and not the quantity of water you consume (download) or sewerage released (upload). What will happen if the local water company billed users by a flat rate fee based on per-centimeter radius of pipe going into their homes rather than volume of water consumed? A user with a pipe of radius that is 1% more than the neighbor enjoys 2% more water flow into their house (do the math!). The problem is that their bills will not differ by 2% but by 1% based on the difference in radius of the pipes. A 2% difference yields a 4% difference in consumption but a 2% difference in billing. The result is that a small group of about 1% users end up consuming about 70% of all the water. This figure is arrived at as follows: A marginal unit increase in resource leads to a near doubling of marginal utility. This is a logarithmic gain (Ln 2=0.693 which means that 69% of utility is enjoyed by about 1% of consumers) . This is the figure issued by Bob Collymore the CEO of Safaricom who said that 1% of unlimited users are consuming about 70% of the resources. This essentially means costs could outstrip revenues by 70:1. This does not make any business sense. Not even a hypothetical NGO engaged in giving ‘free’ Internet through donor funding can carry such a cost to revenue ratio. As to why ISP’s and mobile operators thought billing by size of pipe to the Internet could make money is beyond me. *Bandwidth Consumption Is Not Linear* One mistake that network engineers make is to assume that a 512Kbps user will consume double what a 256Kbps user does and therefore advice the billing team that billing the 512Kbps twice the price of the 256Kbps can cover all costs. This is not true. There are things or activities that a 256Kbps user will not be able to do online, like comfortably do Youtube videos. A 512Kbps user will however be able to do Youtube without a problem. The result is that a 512Kbps user will do much more Youtube videos as the 256Kbps user becomes more frustrated with all the buffering and stops all together attempting to watch online videos. The result is that the consumption of the 512Kbps user will be much higher than double that of the 256Kbps user. Other than Youtube, websites can detect your link speed and present differentiated rich content based on that. I’m sure some of us have been given an option to load a ‘basic’ version of Gmail when it detects a slow link. The big pipe guy never gets to be asked if he can load lighter web pages, rich content is downloaded to his browser by default while the smaller pipe guy gets less content downloaded to his browser in as much that they are both connected to the same website. The problem here is that the difference in content downloaded by the two people on 512K and 256K link is not linear or even double but takes a more logarithmic shape. *Nature Of Contention: Its a Transport and not Network problem* The second mistake that the network engineers make in a network is to assume that if you put a group of customers in a very fat IP pipe and let them fight it out for speeds based on an IP based QoS mechanism is that with time each customer will get a fair chance of getting some bandwidth out of the pool. The problem is that nearly all network QoS equipment characterize a TCP flow as a host-to-host (H2H) connection and not a port-to-port (P2P not to be confused with Peer2Peer) connection. There could be two users with one H2H connection each but one of them might posses about 3000 P2P flows. The problem here is that bandwidth is consumed by the P2P flows and not the H2H flows. User with the 3000 P2P flows ends up taking up most of the bandwidth. This explains why peer to peer (which establishes thousands of P2P flows) is a real bandwidth hog. So what happens when an ISP dumps the angelic you in a pipe with other malevolent users who are doing peer to peer traffic such as bit-torrent? They will hog up all the bandwidth and the equipment and policies set will not be able to ensure fair allocation of bandwidth to all users including you. So some few users doing bit-torrent end up enjoying massive amounts of bandwidth while the rest doing normal browsing suffer. That explains why some users on the Safaricom Network could download over 35GB of data per week as per*comments*<http://www.the-star.co.ke/business/local/71869-safaricom-to-scrap-unlimited-data-bundles> by Bob Collymore. Please read more on how TCP H2H and P2P flows work *here*<http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.98.4474&rep=rep1&type=pdf>. Many ISP’s engage engineers proficient in layer3 operations (CCNP’s, CCIP’s, CCIE’s etc ) to provide expertise on a layer 4 issue of TCP H2H and P2P flows. You cannot control TCP flows by using layer 3 techniques. IP Network engineers are assigned the duties of transport engineers. Good luck with that Mr-CTO-in-an-ISP-wanting-a-fair-access-policy-for-your-customers! At the end of the day, there will be a very small fraction of ‘happy’ customers and a large group of dissatisfied and angry customers. The few happy customers flat rate revenues are not able to cover all costs as the unhappy customers churn. If on the other hand these bandwidth hogs paid by the GB, the story would be very different. This is what operators are realizing now and moving with speed to implement. Safaricom is not the only one affected by this; Verizon, AT&T, T-Mobile in the US are all in different stages of doing away with unlimited service due to their unprofitable nature. Sent from my iPhone
coool analysis On Thu, Apr 19, 2012 at 10:23 AM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
QueenB Feeling the pressure...this is good for the competition.:-)
Why Unlimited Internet is a Big Revenue Drain for Operators<http://tommakau.com/2012/04/19/why-unlimited-internet-is-a-big-revenue-drain-for-operators/>
The announcement by Safaricom that it’s doing away with its unlimited Internet bundle did not come as a surprise to me. I had discussed the historical reason behind the billing model that is used by ISP’s and mobile operators in a *previous blog post here<http://tommakau.com/2011/02/14/free-lunch-ending-for-isp-customers/> * in Feb 2011.
The billing model used in unlimited Internet offering is flawed. This is because the unit of billing is not a valid and quantifiable measure of consumption of service. An ISP or mobile operator charging a customer a flat fee for a size of Internet pipe (measured in Kbps) is equivalent to a water utility company charging you based on the radius of the pipe coming into your house and not the quantity of water you consume (download) or sewerage released (upload).
What will happen if the local water company billed users by a flat rate fee based on per-centimeter radius of pipe going into their homes rather than volume of water consumed? A user with a pipe of radius that is 1% more than the neighbor enjoys 2% more water flow into their house (do the math!). The problem is that their bills will not differ by 2% but by 1% based on the difference in radius of the pipes. A 2% difference yields a 4% difference in consumption but a 2% difference in billing. The result is that a small group of about 1% users end up consuming about 70% of all the water. This figure is arrived at as follows: A marginal unit increase in resource leads to a near doubling of marginal utility. This is a logarithmic gain (Ln 2=0.693 which means that 69% of utility is enjoyed by about 1% of consumers) . This is the figure issued by Bob Collymore the CEO of Safaricom who said that 1% of unlimited users are consuming about 70% of the resources. This essentially means costs could outstrip revenues by 70:1. This does not make any business sense. Not even a hypothetical NGO engaged in giving ‘free’ Internet through donor funding can carry such a cost to revenue ratio. As to why ISP’s and mobile operators thought billing by size of pipe to the Internet could make money is beyond me.
*Bandwidth Consumption Is Not Linear*
One mistake that network engineers make is to assume that a 512Kbps user will consume double what a 256Kbps user does and therefore advice the billing team that billing the 512Kbps twice the price of the 256Kbps can cover all costs. This is not true. There are things or activities that a 256Kbps user will not be able to do online, like comfortably do Youtube videos. A 512Kbps user will however be able to do Youtube without a problem. The result is that a 512Kbps user will do much more Youtube videos as the 256Kbps user becomes more frustrated with all the buffering and stops all together attempting to watch online videos. The result is that the consumption of the 512Kbps user will be much higher than double that of the 256Kbps user. Other than Youtube, websites can detect your link speed and present differentiated rich content based on that. I’m sure some of us have been given an option to load a ‘basic’ version of Gmail when it detects a slow link. The big pipe guy never gets to be asked if he can load lighter web pages, rich content is downloaded to his browser by default while the smaller pipe guy gets less content downloaded to his browser in as much that they are both connected to the same website. The problem here is that the difference in content downloaded by the two people on 512K and 256K link is not linear or even double but takes a more logarithmic shape.
*Nature Of Contention: Its a Transport and not Network problem*
The second mistake that the network engineers make in a network is to assume that if you put a group of customers in a very fat IP pipe and let them fight it out for speeds based on an IP based QoS mechanism is that with time each customer will get a fair chance of getting some bandwidth out of the pool. The problem is that nearly all network QoS equipment characterize a TCP flow as a host-to-host (H2H) connection and not a port-to-port (P2P not to be confused with Peer2Peer) connection. There could be two users with one H2H connection each but one of them might posses about 3000 P2P flows. The problem here is that bandwidth is consumed by the P2P flows and not the H2H flows. User with the 3000 P2P flows ends up taking up most of the bandwidth. This explains why peer to peer (which establishes thousands of P2P flows) is a real bandwidth hog.
So what happens when an ISP dumps the angelic you in a pipe with other malevolent users who are doing peer to peer traffic such as bit-torrent? They will hog up all the bandwidth and the equipment and policies set will not be able to ensure fair allocation of bandwidth to all users including you. So some few users doing bit-torrent end up enjoying massive amounts of bandwidth while the rest doing normal browsing suffer. That explains why some users on the Safaricom Network could download over 35GB of data per week as per*comments*<http://www.the-star.co.ke/business/local/71869-safaricom-to-scrap-unlimited-data-bundles> by Bob Collymore. Please read more on how TCP H2H and P2P flows work *here*<http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.98.4474&rep=rep1&type=pdf>. Many ISP’s engage engineers proficient in layer3 operations (CCNP’s, CCIP’s, CCIE’s etc ) to provide expertise on a layer 4 issue of TCP H2H and P2P flows. You cannot control TCP flows by using layer 3 techniques. IP Network engineers are assigned the duties of transport engineers. Good luck with that Mr-CTO-in-an-ISP-wanting-a-fair-access-policy-for-your-customers!
At the end of the day, there will be a very small fraction of ‘happy’ customers and a large group of dissatisfied and angry customers. The few happy customers flat rate revenues are not able to cover all costs as the unhappy customers churn. If on the other hand these bandwidth hogs paid by the GB, the story would be very different. This is what operators are realizing now and moving with speed to implement. Safaricom is not the only one affected by this; Verizon, AT&T, T-Mobile in the US are all in different stages of doing away with unlimited service due to their unprofitable nature.
Sent from my iPhone _______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Best regards Esther Wambugu
Ni Kuhama... On Thu, Apr 19, 2012 at 10:31 AM, wambugu esther <essiekui@gmail.com> wrote:
coool analysis
On Thu, Apr 19, 2012 at 10:23 AM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
QueenB Feeling the pressure...this is good for the competition.:-)
Why Unlimited Internet is a Big Revenue Drain for Operators<http://tommakau.com/2012/04/19/why-unlimited-internet-is-a-big-revenue-drain-for-operators/>
The announcement by Safaricom that it’s doing away with its unlimited Internet bundle did not come as a surprise to me. I had discussed the historical reason behind the billing model that is used by ISP’s and mobile operators in a *previous blog post here<http://tommakau.com/2011/02/14/free-lunch-ending-for-isp-customers/> * in Feb 2011.
The billing model used in unlimited Internet offering is flawed. This is because the unit of billing is not a valid and quantifiable measure of consumption of service. An ISP or mobile operator charging a customer a flat fee for a size of Internet pipe (measured in Kbps) is equivalent to a water utility company charging you based on the radius of the pipe coming into your house and not the quantity of water you consume (download) or sewerage released (upload).
What will happen if the local water company billed users by a flat rate fee based on per-centimeter radius of pipe going into their homes rather than volume of water consumed? A user with a pipe of radius that is 1% more than the neighbor enjoys 2% more water flow into their house (do the math!). The problem is that their bills will not differ by 2% but by 1% based on the difference in radius of the pipes. A 2% difference yields a 4% difference in consumption but a 2% difference in billing. The result is that a small group of about 1% users end up consuming about 70% of all the water. This figure is arrived at as follows: A marginal unit increase in resource leads to a near doubling of marginal utility. This is a logarithmic gain (Ln 2=0.693 which means that 69% of utility is enjoyed by about 1% of consumers) . This is the figure issued by Bob Collymore the CEO of Safaricom who said that 1% of unlimited users are consuming about 70% of the resources. This essentially means costs could outstrip revenues by 70:1. This does not make any business sense. Not even a hypothetical NGO engaged in giving ‘free’ Internet through donor funding can carry such a cost to revenue ratio. As to why ISP’s and mobile operators thought billing by size of pipe to the Internet could make money is beyond me.
*Bandwidth Consumption Is Not Linear*
One mistake that network engineers make is to assume that a 512Kbps user will consume double what a 256Kbps user does and therefore advice the billing team that billing the 512Kbps twice the price of the 256Kbps can cover all costs. This is not true. There are things or activities that a 256Kbps user will not be able to do online, like comfortably do Youtube videos. A 512Kbps user will however be able to do Youtube without a problem. The result is that a 512Kbps user will do much more Youtube videos as the 256Kbps user becomes more frustrated with all the buffering and stops all together attempting to watch online videos. The result is that the consumption of the 512Kbps user will be much higher than double that of the 256Kbps user. Other than Youtube, websites can detect your link speed and present differentiated rich content based on that. I’m sure some of us have been given an option to load a ‘basic’ version of Gmail when it detects a slow link. The big pipe guy never gets to be asked if he can load lighter web pages, rich content is downloaded to his browser by default while the smaller pipe guy gets less content downloaded to his browser in as much that they are both connected to the same website. The problem here is that the difference in content downloaded by the two people on 512K and 256K link is not linear or even double but takes a more logarithmic shape.
*Nature Of Contention: Its a Transport and not Network problem*
The second mistake that the network engineers make in a network is to assume that if you put a group of customers in a very fat IP pipe and let them fight it out for speeds based on an IP based QoS mechanism is that with time each customer will get a fair chance of getting some bandwidth out of the pool. The problem is that nearly all network QoS equipment characterize a TCP flow as a host-to-host (H2H) connection and not a port-to-port (P2P not to be confused with Peer2Peer) connection. There could be two users with one H2H connection each but one of them might posses about 3000 P2P flows. The problem here is that bandwidth is consumed by the P2P flows and not the H2H flows. User with the 3000 P2P flows ends up taking up most of the bandwidth. This explains why peer to peer (which establishes thousands of P2P flows) is a real bandwidth hog.
So what happens when an ISP dumps the angelic you in a pipe with other malevolent users who are doing peer to peer traffic such as bit-torrent? They will hog up all the bandwidth and the equipment and policies set will not be able to ensure fair allocation of bandwidth to all users including you. So some few users doing bit-torrent end up enjoying massive amounts of bandwidth while the rest doing normal browsing suffer. That explains why some users on the Safaricom Network could download over 35GB of data per week as per*comments*<http://www.the-star.co.ke/business/local/71869-safaricom-to-scrap-unlimited-data-bundles> by Bob Collymore. Please read more on how TCP H2H and P2P flows work *here*<http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.98.4474&rep=rep1&type=pdf>. Many ISP’s engage engineers proficient in layer3 operations (CCNP’s, CCIP’s, CCIE’s etc ) to provide expertise on a layer 4 issue of TCP H2H and P2P flows. You cannot control TCP flows by using layer 3 techniques. IP Network engineers are assigned the duties of transport engineers. Good luck with that Mr-CTO-in-an-ISP-wanting-a-fair-access-policy-for-your-customers!
At the end of the day, there will be a very small fraction of ‘happy’ customers and a large group of dissatisfied and angry customers. The few happy customers flat rate revenues are not able to cover all costs as the unhappy customers churn. If on the other hand these bandwidth hogs paid by the GB, the story would be very different. This is what operators are realizing now and moving with speed to implement. Safaricom is not the only one affected by this; Verizon, AT&T, T-Mobile in the US are all in different stages of doing away with unlimited service due to their unprofitable nature.
Sent from my iPhone _______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
--
Best regards Esther Wambugu
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
Orange here i come.! On Thu, Apr 19, 2012 at 10:33 AM, stephen wanjau <stevewanjau@wikimedia.or.ke> wrote:
Ni Kuhama...
On Thu, Apr 19, 2012 at 10:31 AM, wambugu esther <essiekui@gmail.com> wrote:
coool analysis
On Thu, Apr 19, 2012 at 10:23 AM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
QueenB Feeling the pressure...this is good for the competition.:-)
Why Unlimited Internet is a Big Revenue Drain for Operators
The announcement by Safaricom that it’s doing away with its unlimited Internet bundle did not come as a surprise to me. I had discussed the historical reason behind the billing model that is used by ISP’s and mobile operators in a previous blog post here in Feb 2011.
The billing model used in unlimited Internet offering is flawed. This is because the unit of billing is not a valid and quantifiable measure of consumption of service. An ISP or mobile operator charging a customer a flat fee for a size of Internet pipe (measured in Kbps) is equivalent to a water utility company charging you based on the radius of the pipe coming into your house and not the quantity of water you consume (download) or sewerage released (upload).
What will happen if the local water company billed users by a flat rate fee based on per-centimeter radius of pipe going into their homes rather than volume of water consumed? A user with a pipe of radius that is 1% more than the neighbor enjoys 2% more water flow into their house (do the math!). The problem is that their bills will not differ by 2% but by 1% based on the difference in radius of the pipes. A 2% difference yields a 4% difference in consumption but a 2% difference in billing. The result is that a small group of about 1% users end up consuming about 70% of all the water. This figure is arrived at as follows: A marginal unit increase in resource leads to a near doubling of marginal utility. This is a logarithmic gain (Ln 2=0.693 which means that 69% of utility is enjoyed by about 1% of consumers) . This is the figure issued by Bob Collymore the CEO of Safaricom who said that 1% of unlimited users are consuming about 70% of the resources. This essentially means costs could outstrip revenues by 70:1. This does not make any business sense. Not even a hypothetical NGO engaged in giving ‘free’ Internet through donor funding can carry such a cost to revenue ratio. As to why ISP’s and mobile operators thought billing by size of pipe to the Internet could make money is beyond me.
Bandwidth Consumption Is Not Linear
One mistake that network engineers make is to assume that a 512Kbps user will consume double what a 256Kbps user does and therefore advice the billing team that billing the 512Kbps twice the price of the 256Kbps can cover all costs. This is not true. There are things or activities that a 256Kbps user will not be able to do online, like comfortably do Youtube videos. A 512Kbps user will however be able to do Youtube without a problem. The result is that a 512Kbps user will do much more Youtube videos as the 256Kbps user becomes more frustrated with all the buffering and stops all together attempting to watch online videos. The result is that the consumption of the 512Kbps user will be much higher than double that of the 256Kbps user. Other than Youtube, websites can detect your link speed and present differentiated rich content based on that. I’m sure some of us have been given an option to load a ‘basic’ version of Gmail when it detects a slow link. The big pipe guy never gets to be asked if he can load lighter web pages, rich content is downloaded to his browser by default while the smaller pipe guy gets less content downloaded to his browser in as much that they are both connected to the same website. The problem here is that the difference in content downloaded by the two people on 512K and 256K link is not linear or even double but takes a more logarithmic shape.
Nature Of Contention: Its a Transport and not Network problem
The second mistake that the network engineers make in a network is to assume that if you put a group of customers in a very fat IP pipe and let them fight it out for speeds based on an IP based QoS mechanism is that with time each customer will get a fair chance of getting some bandwidth out of the pool. The problem is that nearly all network QoS equipment characterize a TCP flow as a host-to-host (H2H) connection and not a port-to-port (P2P not to be confused with Peer2Peer) connection. There could be two users with one H2H connection each but one of them might posses about 3000 P2P flows. The problem here is that bandwidth is consumed by the P2P flows and not the H2H flows. User with the 3000 P2P flows ends up taking up most of the bandwidth. This explains why peer to peer (which establishes thousands of P2P flows) is a real bandwidth hog.
So what happens when an ISP dumps the angelic you in a pipe with other malevolent users who are doing peer to peer traffic such as bit-torrent? They will hog up all the bandwidth and the equipment and policies set will not be able to ensure fair allocation of bandwidth to all users including you. So some few users doing bit-torrent end up enjoying massive amounts of bandwidth while the rest doing normal browsing suffer. That explains why some users on the Safaricom Network could download over 35GB of data per week as percomments by Bob Collymore. Please read more on how TCP H2H and P2P flows work here. Many ISP’s engage engineers proficient in layer3 operations (CCNP’s, CCIP’s, CCIE’s etc ) to provide expertise on a layer 4 issue of TCP H2H and P2P flows. You cannot control TCP flows by using layer 3 techniques. IP Network engineers are assigned the duties of transport engineers. Good luck with that Mr-CTO-in-an-ISP-wanting-a-fair-access-policy-for-your-customers!
At the end of the day, there will be a very small fraction of ‘happy’ customers and a large group of dissatisfied and angry customers. The few happy customers flat rate revenues are not able to cover all costs as the unhappy customers churn. If on the other hand these bandwidth hogs paid by the GB, the story would be very different. This is what operators are realizing now and moving with speed to implement. Safaricom is not the only one affected by this; Verizon, AT&T, T-Mobile in the US are all in different stages of doing away with unlimited service due to their unprofitable nature.
Sent from my iPhone _______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
--
Best regards Esther Wambugu
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- David Maina. P. O. Box 8310-00200, NAIROBI, KENYA.. Cell:+254-721-950073. Registered Linux User #407239. ---------------------------------------------------------------------- "By golly, I'm beginning to think Linux really *is* the best thing since sliced bread."
same hea, Airtel On Thu, Apr 19, 2012 at 10:36 AM, maina <dmaishe@gmail.com> wrote:
Orange here i come.! * On Thu, Apr 19, 2012 at 10:33 AM, stephen wanjau <stevewanjau@wikimedia.or.ke> wrote:
Ni Kuhama...
On Thu, Apr 19, 2012 at 10:31 AM, wambugu esther <essiekui@gmail.com> wrote:
coool analysis
On Thu, Apr 19, 2012 at 10:23 AM, Kevin Mutuma <kkmtumah@gmail.com>
wrote:
QueenB Feeling the pressure...this is good for the competition.:-)
Why Unlimited Internet is a Big Revenue Drain for Operators
The announcement by Safaricom that it’s doing away with its unlimited Internet bundle did not come as a surprise to me. I had discussed the historical reason behind the billing model that is used by ISP’s and
mobile
operators in a previous blog post here in Feb 2011.
The billing model used in unlimited Internet offering is flawed. This is because the unit of billing is not a valid and quantifiable measure of consumption of service. An ISP or mobile operator charging a customer a flat fee for a size of Internet pipe (measured in Kbps) is equivalent to a water utility company charging you based on the radius of the pipe coming into your house and not the quantity of water you consume (download) or sewerage released (upload).
What will happen if the local water company billed users by a flat rate fee based on per-centimeter radius of pipe going into their homes rather than volume of water consumed? A user with a pipe of radius that is 1% more than the neighbor enjoys 2% more water flow into their house (do the math!). The problem is that their bills will not differ by 2% but by 1% based on the difference in radius of the pipes. A 2% difference yields a 4% difference in consumption but a 2% difference in billing. The result is that a small group of about 1% users end up consuming about 70% of all the water. This figure is arrived at as follows: A marginal unit increase in resource leads to a near doubling of marginal utility. This is a logarithmic gain (Ln 2=0.693 which means that 69% of utility is enjoyed by about 1% of consumers) . This is the figure issued by Bob Collymore the CEO of Safaricom who said that 1% of unlimited users are consuming about 70% of the resources. This essentially means costs could outstrip revenues by 70:1. This does not make any business sense. Not even a hypothetical NGO engaged in giving ‘free’ Internet through donor funding can carry such a cost to revenue ratio. As to why ISP’s and mobile operators thought billing by size of pipe to the Internet could make money is beyond me.
Bandwidth Consumption Is Not Linear
One mistake that network engineers make is to assume that a 512Kbps user will consume double what a 256Kbps user does and therefore advice the billing team that billing the 512Kbps twice the price of the 256Kbps can cover all costs. This is not true. There are things or activities that a 256Kbps user will not be able to do online, like comfortably do Youtube videos. A 512Kbps user will however be able to do Youtube without a problem. The result is that a 512Kbps user will do much more Youtube videos as the 256Kbps user becomes more frustrated with all the buffering and stops all together attempting to watch online videos. The result is that the consumption of the 512Kbps user will be much higher than double that of the 256Kbps user. Other than Youtube, websites can detect your link speed and present differentiated rich content based on that. I’m sure some of us have been given an option to load a ‘basic’ version of Gmail when it detects a slow link. The big pipe guy never gets to be asked if he can load lighter web pages, rich content is downloaded to his browser by default while the smaller pipe guy gets less content downloaded to his browser in as much that they are both connected to the same website. The problem here is that the difference in content downloaded by the two people on 512K and 256K link is not linear or even double but takes a more logarithmic shape.
Nature Of Contention: Its a Transport and not Network problem
The second mistake that the network engineers make in a network is to assume that if you put a group of customers in a very fat IP pipe and let them fight it out for speeds based on an IP based QoS mechanism is that with time each customer will get a fair chance of getting some bandwidth out of the pool. The problem is that nearly all network QoS equipment characterize a TCP flow as a host-to-host (H2H) connection and not a port-to-port (P2P not to be confused with Peer2Peer) connection. There could be two users with one H2H connection each but one of them might posses about 3000 P2P flows. The problem here is that bandwidth is consumed by the P2P flows and not the H2H flows. User with the 3000 P2P flows ends up taking up most of the bandwidth. This explains why peer to peer (which establishes thousands of P2P flows) is a real bandwidth hog.
So what happens when an ISP dumps the angelic you in a pipe with other malevolent users who are doing peer to peer traffic such as bit-torrent? They will hog up all the bandwidth and the equipment and policies set will not be able to ensure fair allocation of bandwidth to all users including you. So some few users doing bit-torrent end up enjoying massive amounts of bandwidth while the rest doing normal browsing suffer. That explains why some users on the Safaricom Network could download over 35GB of data per week as percomments by Bob Collymore. Please read more on how TCP H2H and P2P flows work here. Many ISP’s engage engineers proficient in layer3 operations (CCNP’s, CCIP’s, CCIE’s etc ) to provide expertise on a layer 4 issue of TCP H2H and P2P flows. You cannot control TCP flows by using layer 3 techniques. IP Network engineers are assigned the duties of transport engineers. Good luck with that Mr-CTO-in-an-ISP-wanting-a-**fair-access-policy-for-your-**customers!
At the end of the day, there will be a very small fraction of ‘happy’ customers and a large group of dissatisfied and angry customers. The few happy customers flat rate revenues are not able to cover all costs as the unhappy customers churn. If on the other hand these bandwidth hogs paid by the GB, the story would be very different. This is what operators are realizing now and moving with speed to implement. Safaricom is not the only one affected by this; Verizon, AT&T, T-Mobile in the US are all in different stages of doing away with unlimited service due to their unprofitable nature.
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Best regards Esther Wambugu
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--* * * David Maina. P. O. Box 8310-00200, NAIROBI, KENYA.. Cell:+254-721-950073. Registered Linux User #407239. ---------------------------------------------------------------------- "By golly, I'm beginning to think Linux really *is* the best thing since sliced bread." _______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
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-- Best regards Esther Wambugu
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services. And yu? What are they up to these days?
As a result of my frustrations with Limited "Unlimited" by the said company...I am testing Airtel today for possible migration. My jaw is on the floor man! I had these documents that were sent to me, I clicked 'Save' n waited...little did I know they had downloaded immediately n I was there waiting! Oh,did I mention I am also streaming my favourite gospel hip-hop tunes as I download some open source software that I need? Where else have you seen download speeds of 235 KiloBytes/Sec (1.88Megabits/Sec)? :) If this goes on, I'm going to retain my Saf line for sending money to my grandmother in the countryside! :) On 19 April 2012 10:41, Philip Musyoki <pmusyoki@gmail.com> wrote:
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services.
And yu? What are they up to these days?
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Kind Regards, Moses Muya.
@Moses Eh Homie, You must have been caged in a GREEN cell wearing a loyalty shirt. Orange 3G does that day in day out. I just looked at my history speed analysis and The least I have gotten at peak times this year is 1.6Mbs. On Thu, Apr 19, 2012 at 11:58 AM, Moses Muya <mouzmuyer@gmail.com> wrote:
As a result of my frustrations with Limited "Unlimited" by the said company...I am testing Airtel today for possible migration. My jaw is on the floor man! I had these documents that were sent to me, I clicked 'Save' n waited...little did I know they had downloaded immediately n I was there waiting! Oh,did I mention I am also streaming my favourite gospel hip-hop tunes as I download some open source software that I need? Where else have you seen download speeds of 235 KiloBytes/Sec (1.88Megabits/Sec)? :) If this goes on, I'm going to retain my Saf line for sending money to my grandmother in the countryside! :)
On 19 April 2012 10:41, Philip Musyoki <pmusyoki@gmail.com> wrote:
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services.
And yu? What are they up to these days?
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Kind Regards,
Moses Muya.
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That was Airtel 3G ....my Saf line is my 'alternative bank account' from now going forward - to be used ONLY for sending and receiving money! :) On 19 April 2012 12:19, Kevin Mutuma <kkmtumah@gmail.com> wrote:
@Moses
Eh Homie, You must have been caged in a GREEN cell wearing a loyalty shirt. Orange 3G does that day in day out. I just looked at my history speed analysis and The least I have gotten at peak times this year is 1.6Mbs.
On Thu, Apr 19, 2012 at 11:58 AM, Moses Muya <mouzmuyer@gmail.com> wrote:
As a result of my frustrations with Limited "Unlimited" by the said company...I am testing Airtel today for possible migration. My jaw is on the floor man! I had these documents that were sent to me, I clicked 'Save' n waited...little did I know they had downloaded immediately n I was there waiting! Oh,did I mention I am also streaming my favourite gospel hip-hop tunes as I download some open source software that I need? Where else have you seen download speeds of 235 KiloBytes/Sec (1.88Megabits/Sec)? :) If this goes on, I'm going to retain my Saf line for sending money to my grandmother in the countryside! :)
On 19 April 2012 10:41, Philip Musyoki <pmusyoki@gmail.com> wrote:
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services.
And yu? What are they up to these days?
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Kind Regards,
Moses Muya.
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Kind Regards, Moses Muya.
Hi kevin i disagree with some parts of your analysis. Unlimited internet can be profitable with the right tools and pricing strategy and policies, it all depends on what the ISP is trying to achieve. Its not something that you should wake up one day and decide to do (Safaricom/Orange case). It will require some years of careful analysis of user traffic patterns. Like all things technical the more you in a hurry the more you mess up. You are required to ensure that the pricing represents the average network use of people paying for unlimited and do not hammer the links and people that pay for unlimited and hammer the links. Personally knowing kenyans the people that pay and hammer the links will be very near 100% of the total unlimited internet customers, so safcom/orange can figure out what the average data for this users are and price based on that. This should include usage at night where people leave downloading torrents. So basically the charge will be very high for most kenyans. The issue of blocking/limiting torrents bandwidth is out of question as this is like having someone buy a car and then give them rules on how they should use it. There are two areas you can employ QOS, the Backbone and to the end user, Real backbone QOS require an understanding of traffic engineering (ATM, MPLS, Frame Relay, Metro ethernet) while the end users can be under host to host or based on flow QOS. I think i should get you a QOS book for CCIP. Cisco certifications are from layer 4 downwards. The reason people get cisco certified is because of the amount of reading materials provided over the internet. If you carefully understand the contents of the cisco books the knowledge acquired is more than CISCO, since the only part that is CISCO is the commands, the rest are IEEE and RFC standards that all vendors must adhere to. Ofcourse the books always state that a certain feature is only available in CISCO. I think the main problem here is the dumps found all over the internet that cheat a student that once they pass the exams then they qualify to be called Network engineers. I speeak from experience and prefer reading CISCO books even when i intend to do a Juniper Exam or handle other vendors equipment. Then find one of the manuals and figure how to implement my concepts on the said vendors equipment Also traffic engineering principles are very theoretical and that is why we need to observe traffic characteristics over time inorder to come up with a traffic engineering solution. On Thu, Apr 19, 2012 at 12:19 PM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
@Moses
Eh Homie, You must have been caged in a GREEN cell wearing a loyalty shirt. Orange 3G does that day in day out. I just looked at my history speed analysis and The least I have gotten at peak times this year is 1.6Mbs.
On Thu, Apr 19, 2012 at 11:58 AM, Moses Muya <mouzmuyer@gmail.com> wrote:
As a result of my frustrations with Limited "Unlimited" by the said company...I am testing Airtel today for possible migration. My jaw is on the floor man! I had these documents that were sent to me, I clicked 'Save' n waited...little did I know they had downloaded immediately n I was there waiting! Oh,did I mention I am also streaming my favourite gospel hip-hop tunes as I download some open source software that I need? Where else have you seen download speeds of 235 KiloBytes/Sec (1.88Megabits/Sec)? :) If this goes on, I'm going to retain my Saf line for sending money to my grandmother in the countryside! :)
On 19 April 2012 10:41, Philip Musyoki <pmusyoki@gmail.com> wrote:
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services.
And yu? What are they up to these days?
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Kind Regards,
Moses Muya.
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Best Regards, Stephen Munguti. +254702945908
Safaricom and all you other people supporting this move need to understand one thing; Unlimited internet is not a want anymore....It's a NEED. People need this services more than ever. The same way Thika road gets congested and they call in the Chinese to build super expansive highways,not limit how many times you use your car in a month and give you a formula of when to be on the road and when not to.( The equivalent of throttling speeds). We are in the digital era where someone in Australia makes a video of how some Ugandan LRA leader is abducting child soldiers and using them as sex slaves goes viral in days and everyone goes on you tube to view and download. Smartphone,modem and tablet alike-all needing to use the same pipe to get the same content. Will you restrict this because it does not make business sense? People will leave your network and flock where they can access whatever they want at anytime for however long. China, India the worlds biggest countries have unlimited tariffs and their networks are flourishing.(China has two companies in the Top 10 Telecom Company in the world) Simply put, Its a problem we have to embrace and mitigate solutions for; not lock out your customers and give them conditions - the same people making you money. I am pleased with what Orange is doing for example. They Identified the NEED and its solution? Simple..get more bandwidth with the launch of LION2. Too see this, click here<http://www.orange-tkl.co.ke/index.php?option=com_content&view=article&id=284:lion2-submarine-cable-goes-live&catid=1:latest-news&Itemid=28>. Investing heavily in bandwidth is what has gotten the top companies where they are. Other solutions can be investing in technologies that have more bandwidth capacity such as WIMAX, WiFi, fibre-to-home etc. How come we haven’t heard Zuku, Access Kenya and other WiMAX/fibre ISPs complaining of abuse? They have always billed fixed monthly amounts, and it works for them. Safaricom and all other Telcos feeling the pinch should simply start selling Unlimited Internet via WiMAX USB dongles on 16e mobile WiMAX and WiFi in high traffic areas like Nairobi CBD and get serious on their traffic engineering models to ensure a balanced ecosystem. At the end of the day, what Safaricom see as saving some money now may be a huge loss in market share in the near future, a dip they may never recover from if they chose to ease up on policy, seeing as the competition is very tight. Its not all doom and gloom though, at least there are other companies offering the same for now.. The Oranges and the Airtels.[?] My opinion, Kevin, On Thu, Apr 19, 2012 at 1:13 PM, Stephen Munguti <kamitu.sm@gmail.com>wrote:
Hi kevin i disagree with some parts of your analysis. Unlimited internet can be profitable with the right tools and pricing strategy and policies, it all depends on what the ISP is trying to achieve. Its not something that you should wake up one day and decide to do (Safaricom/Orange case). It will require some years of careful analysis of user traffic patterns. Like all things technical the more you in a hurry the more you mess up.
You are required to ensure that the pricing represents the average network use of people paying for unlimited and do not hammer the links and people that pay for unlimited and hammer the links. Personally knowing kenyans the people that pay and hammer the links will be very near 100% of the total unlimited internet customers, so safcom/orange can figure out what the average data for this users are and price based on that. This should include usage at night where people leave downloading torrents. So basically the charge will be very high for most kenyans. The issue of blocking/limiting torrents bandwidth is out of question as this is like having someone buy a car and then give them rules on how they should use it.
There are two areas you can employ QOS, the Backbone and to the end user, Real backbone QOS require an understanding of traffic engineering (ATM, MPLS, Frame Relay, Metro ethernet) while the end users can be under host to host or based on flow QOS. I think i should get you a QOS book for CCIP. Cisco certifications are from layer 4 downwards. The reason people get cisco certified is because of the amount of reading materials provided over the internet. If you carefully understand the contents of the cisco books the knowledge acquired is more than CISCO, since the only part that is CISCO is the commands, the rest are IEEE and RFC standards that all vendors must adhere to. Ofcourse the books always state that a certain feature is only available in CISCO. I think the main problem here is the dumps found all over the internet that cheat a student that once they pass the exams then they qualify to be called Network engineers. I speeak from experience and prefer reading CISCO books even when i intend to do a Juniper Exam or handle other vendors equipment. Then find one of the manuals and figure how to implement my concepts on the said vendors equipment
Also traffic engineering principles are very theoretical and that is why we need to observe traffic characteristics over time inorder to come up with a traffic engineering solution.
On Thu, Apr 19, 2012 at 12:19 PM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
@Moses
Eh Homie, You must have been caged in a GREEN cell wearing a loyalty shirt. Orange 3G does that day in day out. I just looked at my history speed analysis and The least I have gotten at peak times this year is 1.6Mbs.
On Thu, Apr 19, 2012 at 11:58 AM, Moses Muya <mouzmuyer@gmail.com> wrote:
As a result of my frustrations with Limited "Unlimited" by the said company...I am testing Airtel today for possible migration. My jaw is on the floor man! I had these documents that were sent to me, I clicked 'Save' n waited...little did I know they had downloaded immediately n I was there waiting! Oh,did I mention I am also streaming my favourite gospel hip-hop tunes as I download some open source software that I need? Where else have you seen download speeds of 235 KiloBytes/Sec (1.88Megabits/Sec)? :) If this goes on, I'm going to retain my Saf line for sending money to my grandmother in the countryside! :)
On 19 April 2012 10:41, Philip Musyoki <pmusyoki@gmail.com> wrote:
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services.
And yu? What are they up to these days?
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Kind Regards,
Moses Muya.
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
--
Best Regards, Stephen Munguti.
+254702945908
The Original post was by one Mr. Tom Makau. <http://tommakau.com/about/> On Thu, Apr 19, 2012 at 4:52 PM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
Safaricom and all you other people supporting this move need to understand one thing; Unlimited internet is not a want anymore....It's a NEED. People need this services more than ever. The same way Thika road gets congested and they call in the Chinese to build super expansive highways,not limit how many times you use your car in a month and give you a formula of when to be on the road and when not to.( The equivalent of throttling speeds).
We are in the digital era where someone in Australia makes a video of how some Ugandan LRA leader is abducting child soldiers and using them as sex slaves goes viral in days and everyone goes on you tube to view and download. Smartphone,modem and tablet alike-all needing to use the same pipe to get the same content. Will you restrict this because it does not make business sense? People will leave your network and flock where they can access whatever they want at anytime for however long. China, India the worlds biggest countries have unlimited tariffs and their networks are flourishing.(China has two companies in the Top 10 Telecom Company in the world)
Simply put, Its a problem we have to embrace and mitigate solutions for; not lock out your customers and give them conditions - the same people making you money. I am pleased with what Orange is doing for example. They Identified the NEED and its solution? Simple..get more bandwidth with the launch of LION2. Too see this, click here<http://www.orange-tkl.co.ke/index.php?option=com_content&view=article&id=284:lion2-submarine-cable-goes-live&catid=1:latest-news&Itemid=28>. Investing heavily in bandwidth is what has gotten the top companies where they are. Other solutions can be investing in technologies that have more bandwidth capacity such as WIMAX, WiFi, fibre-to-home etc. How come we haven’t heard Zuku, Access Kenya and other WiMAX/fibre ISPs complaining of abuse? They have always billed fixed monthly amounts, and it works for them. Safaricom and all other Telcos feeling the pinch should simply start selling Unlimited Internet via WiMAX USB dongles on 16e mobile WiMAX and WiFi in high traffic areas like Nairobi CBD and get serious on their traffic engineering models to ensure a balanced ecosystem.
At the end of the day, what Safaricom see as saving some money now may be a huge loss in market share in the near future, a dip they may never recover from if they chose to ease up on policy, seeing as the competition is very tight. Its not all doom and gloom though, at least there are other companies offering the same for now.. The Oranges and the Airtels.[?]
My opinion, Kevin,
On Thu, Apr 19, 2012 at 1:13 PM, Stephen Munguti <kamitu.sm@gmail.com>wrote:
Hi kevin i disagree with some parts of your analysis. Unlimited internet can be profitable with the right tools and pricing strategy and policies, it all depends on what the ISP is trying to achieve. Its not something that you should wake up one day and decide to do (Safaricom/Orange case). It will require some years of careful analysis of user traffic patterns. Like all things technical the more you in a hurry the more you mess up.
You are required to ensure that the pricing represents the average network use of people paying for unlimited and do not hammer the links and people that pay for unlimited and hammer the links. Personally knowing kenyans the people that pay and hammer the links will be very near 100% of the total unlimited internet customers, so safcom/orange can figure out what the average data for this users are and price based on that. This should include usage at night where people leave downloading torrents. So basically the charge will be very high for most kenyans. The issue of blocking/limiting torrents bandwidth is out of question as this is like having someone buy a car and then give them rules on how they should use it.
There are two areas you can employ QOS, the Backbone and to the end user, Real backbone QOS require an understanding of traffic engineering (ATM, MPLS, Frame Relay, Metro ethernet) while the end users can be under host to host or based on flow QOS. I think i should get you a QOS book for CCIP. Cisco certifications are from layer 4 downwards. The reason people get cisco certified is because of the amount of reading materials provided over the internet. If you carefully understand the contents of the cisco books the knowledge acquired is more than CISCO, since the only part that is CISCO is the commands, the rest are IEEE and RFC standards that all vendors must adhere to. Ofcourse the books always state that a certain feature is only available in CISCO. I think the main problem here is the dumps found all over the internet that cheat a student that once they pass the exams then they qualify to be called Network engineers. I speeak from experience and prefer reading CISCO books even when i intend to do a Juniper Exam or handle other vendors equipment. Then find one of the manuals and figure how to implement my concepts on the said vendors equipment
Also traffic engineering principles are very theoretical and that is why we need to observe traffic characteristics over time inorder to come up with a traffic engineering solution.
On Thu, Apr 19, 2012 at 12:19 PM, Kevin Mutuma <kkmtumah@gmail.com>wrote:
@Moses
Eh Homie, You must have been caged in a GREEN cell wearing a loyalty shirt. Orange 3G does that day in day out. I just looked at my history speed analysis and The least I have gotten at peak times this year is 1.6Mbs.
On Thu, Apr 19, 2012 at 11:58 AM, Moses Muya <mouzmuyer@gmail.com>wrote:
As a result of my frustrations with Limited "Unlimited" by the said company...I am testing Airtel today for possible migration. My jaw is on the floor man! I had these documents that were sent to me, I clicked 'Save' n waited...little did I know they had downloaded immediately n I was there waiting! Oh,did I mention I am also streaming my favourite gospel hip-hop tunes as I download some open source software that I need? Where else have you seen download speeds of 235 KiloBytes/Sec (1.88Megabits/Sec)? :) If this goes on, I'm going to retain my Saf line for sending money to my grandmother in the countryside! :)
On 19 April 2012 10:41, Philip Musyoki <pmusyoki@gmail.com> wrote:
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services.
And yu? What are they up to these days?
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
-- Kind Regards,
Moses Muya.
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
_______________________________________________ Skunkworks mailing list Skunkworks@lists.my.co.ke ------------ List info, subscribe/unsubscribe http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks ------------
Skunkworks Rules http://my.co.ke/phpbb/viewtopic.php?f=24&t=94 ------------ Other services @ http://my.co.ke
--
Best Regards, Stephen Munguti.
+254702945908
I agree that there is need to invest in more bandwidth inline with the expected/current no. of customers. The problem is that to invest in bandwidth and ISP will require huge investments and that money has to come from somewhere. Personally i think that a business should be able to sustain its growth without dipping to its owners pockets, other wise what would be the use of owning such a business and how will it be beneficial to to the customers should the business wind up. What i am saying is that ISPs need adopt carefully crafted startegies that will give value to both customers and owners and can cope with the increasing costs associated with the never ending modernisation of telecom equipments inline with the technology changes. On Thu, Apr 19, 2012 at 5:09 PM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
The Original post was by one Mr. Tom Makau. <http://tommakau.com/about/>
On Thu, Apr 19, 2012 at 4:52 PM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
Safaricom and all you other people supporting this move need to understand one thing; Unlimited internet is not a want anymore....It's a NEED. People need this services more than ever. The same way Thika road gets congested and they call in the Chinese to build super expansive highways,not limit how many times you use your car in a month and give you a formula of when to be on the road and when not to.( The equivalent of throttling speeds).
We are in the digital era where someone in Australia makes a video of how some Ugandan LRA leader is abducting child soldiers and using them as sex slaves goes viral in days and everyone goes on you tube to view and download. Smartphone,modem and tablet alike-all needing to use the same pipe to get the same content. Will you restrict this because it does not make business sense? People will leave your network and flock where they can access whatever they want at anytime for however long. China, India the worlds biggest countries have unlimited tariffs and their networks are flourishing.(China has two companies in the Top 10 Telecom Company in the world)
Simply put, Its a problem we have to embrace and mitigate solutions for; not lock out your customers and give them conditions - the same people making you money. I am pleased with what Orange is doing for example. They Identified the NEED and its solution? Simple..get more bandwidth with the launch of LION2. Too see this, click here<http://www.orange-tkl.co.ke/index.php?option=com_content&view=article&id=284:lion2-submarine-cable-goes-live&catid=1:latest-news&Itemid=28>. Investing heavily in bandwidth is what has gotten the top companies where they are. Other solutions can be investing in technologies that have more bandwidth capacity such as WIMAX, WiFi, fibre-to-home etc. How come we haven’t heard Zuku, Access Kenya and other WiMAX/fibre ISPs complaining of abuse? They have always billed fixed monthly amounts, and it works for them. Safaricom and all other Telcos feeling the pinch should simply start selling Unlimited Internet via WiMAX USB dongles on 16e mobile WiMAX and WiFi in high traffic areas like Nairobi CBD and get serious on their traffic engineering models to ensure a balanced ecosystem.
At the end of the day, what Safaricom see as saving some money now may be a huge loss in market share in the near future, a dip they may never recover from if they chose to ease up on policy, seeing as the competition is very tight. Its not all doom and gloom though, at least there are other companies offering the same for now.. The Oranges and the Airtels.[?]
My opinion, Kevin,
On Thu, Apr 19, 2012 at 1:13 PM, Stephen Munguti <kamitu.sm@gmail.com>wrote:
Hi kevin i disagree with some parts of your analysis. Unlimited internet can be profitable with the right tools and pricing strategy and policies, it all depends on what the ISP is trying to achieve. Its not something that you should wake up one day and decide to do (Safaricom/Orange case). It will require some years of careful analysis of user traffic patterns. Like all things technical the more you in a hurry the more you mess up.
You are required to ensure that the pricing represents the average network use of people paying for unlimited and do not hammer the links and people that pay for unlimited and hammer the links. Personally knowing kenyans the people that pay and hammer the links will be very near 100% of the total unlimited internet customers, so safcom/orange can figure out what the average data for this users are and price based on that. This should include usage at night where people leave downloading torrents. So basically the charge will be very high for most kenyans. The issue of blocking/limiting torrents bandwidth is out of question as this is like having someone buy a car and then give them rules on how they should use it.
There are two areas you can employ QOS, the Backbone and to the end user, Real backbone QOS require an understanding of traffic engineering (ATM, MPLS, Frame Relay, Metro ethernet) while the end users can be under host to host or based on flow QOS. I think i should get you a QOS book for CCIP. Cisco certifications are from layer 4 downwards. The reason people get cisco certified is because of the amount of reading materials provided over the internet. If you carefully understand the contents of the cisco books the knowledge acquired is more than CISCO, since the only part that is CISCO is the commands, the rest are IEEE and RFC standards that all vendors must adhere to. Ofcourse the books always state that a certain feature is only available in CISCO. I think the main problem here is the dumps found all over the internet that cheat a student that once they pass the exams then they qualify to be called Network engineers. I speeak from experience and prefer reading CISCO books even when i intend to do a Juniper Exam or handle other vendors equipment. Then find one of the manuals and figure how to implement my concepts on the said vendors equipment
Also traffic engineering principles are very theoretical and that is why we need to observe traffic characteristics over time inorder to come up with a traffic engineering solution.
On Thu, Apr 19, 2012 at 12:19 PM, Kevin Mutuma <kkmtumah@gmail.com>wrote:
@Moses
Eh Homie, You must have been caged in a GREEN cell wearing a loyalty shirt. Orange 3G does that day in day out. I just looked at my history speed analysis and The least I have gotten at peak times this year is 1.6Mbs.
On Thu, Apr 19, 2012 at 11:58 AM, Moses Muya <mouzmuyer@gmail.com>wrote:
As a result of my frustrations with Limited "Unlimited" by the said company...I am testing Airtel today for possible migration. My jaw is on the floor man! I had these documents that were sent to me, I clicked 'Save' n waited...little did I know they had downloaded immediately n I was there waiting! Oh,did I mention I am also streaming my favourite gospel hip-hop tunes as I download some open source software that I need? Where else have you seen download speeds of 235 KiloBytes/Sec (1.88Megabits/Sec)? :) If this goes on, I'm going to retain my Saf line for sending money to my grandmother in the countryside! :)
On 19 April 2012 10:41, Philip Musyoki <pmusyoki@gmail.com> wrote:
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services.
And yu? What are they up to these days?
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Moses Muya.
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-- Best Regards, Stephen Munguti. +254702945908
Then my concern here is their coverage area/availability of the 3G service because last time I checked my modem had problems registering on the 3G network just in Langata while my safcom 3G connection was just fine. On Thu, Apr 19, 2012 at 11:58 AM, Moses Muya <mouzmuyer@gmail.com> wrote:
As a result of my frustrations with Limited "Unlimited" by the said company...I am testing Airtel today for possible migration. My jaw is on the floor man! I had these documents that were sent to me, I clicked 'Save' n waited...little did I know they had downloaded immediately n I was there waiting! Oh,did I mention I am also streaming my favourite gospel hip-hop tunes as I download some open source software that I need? Where else have you seen download speeds of 235 KiloBytes/Sec (1.88Megabits/Sec)? :) If this goes on, I'm going to retain my Saf line for sending money to my grandmother in the countryside! :)
On 19 April 2012 10:41, Philip Musyoki <pmusyoki@gmail.com> wrote:
Anyway, who has been using Airtel 3G and how has it been? I have always been sceptical of Airtel but it does not hurt to hear about their services.
And yu? What are they up to these days?
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-- Kind Regards,
Moses Muya.
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Airtel have unlimited? I cannt do without unlimited! On Thu, Apr 19, 2012 at 10:40 AM, wambugu esther <essiekui@gmail.com> wrote:
same hea, Airtel
On Thu, Apr 19, 2012 at 10:36 AM, maina <dmaishe@gmail.com> wrote:
Orange here i come.!
On Thu, Apr 19, 2012 at 10:33 AM, stephen wanjau <stevewanjau@wikimedia.or.ke> wrote:
Ni Kuhama...
On Thu, Apr 19, 2012 at 10:31 AM, wambugu esther <essiekui@gmail.com> wrote:
coool analysis
On Thu, Apr 19, 2012 at 10:23 AM, Kevin Mutuma <kkmtumah@gmail.com> wrote:
QueenB Feeling the pressure...this is good for the competition.:-)
Why Unlimited Internet is a Big Revenue Drain for Operators
The announcement by Safaricom that it’s doing away with its unlimited Internet bundle did not come as a surprise to me. I had discussed the historical reason behind the billing model that is used by ISP’s and mobile operators in a previous blog post here in Feb 2011.
The billing model used in unlimited Internet offering is flawed. This is because the unit of billing is not a valid and quantifiable measure of consumption of service. An ISP or mobile operator charging a customer a flat fee for a size of Internet pipe (measured in Kbps) is equivalent to a water utility company charging you based on the radius of the pipe coming into your house and not the quantity of water you consume (download) or sewerage released (upload).
What will happen if the local water company billed users by a flat rate fee based on per-centimeter radius of pipe going into their homes rather than volume of water consumed? A user with a pipe of radius that is 1% more than the neighbor enjoys 2% more water flow into their house (do the math!). The problem is that their bills will not differ by 2% but by 1% based on the difference in radius of the pipes. A 2% difference yields a 4% difference in consumption but a 2% difference in billing. The result is that a small group of about 1% users end up consuming about 70% of all the water. This figure is arrived at as follows: A marginal unit increase in resource leads to a near doubling of marginal utility. This is a logarithmic gain (Ln 2=0.693 which means that 69% of utility is enjoyed by about 1% of consumers) . This is the figure issued by Bob Collymore the CEO of Safaricom who said that 1% of unlimited users are consuming about 70% of the resources. This essentially means costs could outstrip revenues by 70:1. This does not make any business sense. Not even a hypothetical NGO engaged in giving ‘free’ Internet through donor funding can carry such a cost to revenue ratio. As to why ISP’s and mobile operators thought billing by size of pipe to the Internet could make money is beyond me.
Bandwidth Consumption Is Not Linear
One mistake that network engineers make is to assume that a 512Kbps user will consume double what a 256Kbps user does and therefore advice the billing team that billing the 512Kbps twice the price of the 256Kbps can cover all costs. This is not true. There are things or activities that a 256Kbps user will not be able to do online, like comfortably do Youtube videos. A 512Kbps user will however be able to do Youtube without a problem. The result is that a 512Kbps user will do much more Youtube videos as the 256Kbps user becomes more frustrated with all the buffering and stops all together attempting to watch online videos. The result is that the consumption of the 512Kbps user will be much higher than double that of the 256Kbps user. Other than Youtube, websites can detect your link speed and present differentiated rich content based on that. I’m sure some of us have been given an option to load a ‘basic’ version of Gmail when it detects a slow link. The big pipe guy never gets to be asked if he can load lighter web pages, rich content is downloaded to his browser by default while the smaller pipe guy gets less content downloaded to his browser in as much that they are both connected to the same website. The problem here is that the difference in content downloaded by the two people on 512K and 256K link is not linear or even double but takes a more logarithmic shape.
Nature Of Contention: Its a Transport and not Network problem
The second mistake that the network engineers make in a network is to assume that if you put a group of customers in a very fat IP pipe and let them fight it out for speeds based on an IP based QoS mechanism is that with time each customer will get a fair chance of getting some bandwidth out of the pool. The problem is that nearly all network QoS equipment characterize a TCP flow as a host-to-host (H2H) connection and not a port-to-port (P2P not to be confused with Peer2Peer) connection. There could be two users with one H2H connection each but one of them might posses about 3000 P2P flows. The problem here is that bandwidth is consumed by the P2P flows and not the H2H flows. User with the 3000 P2P flows ends up taking up most of the bandwidth. This explains why peer to peer (which establishes thousands of P2P flows) is a real bandwidth hog.
So what happens when an ISP dumps the angelic you in a pipe with other malevolent users who are doing peer to peer traffic such as bit-torrent? They will hog up all the bandwidth and the equipment and policies set will not be able to ensure fair allocation of bandwidth to all users including you. So some few users doing bit-torrent end up enjoying massive amounts of bandwidth while the rest doing normal browsing suffer. That explains why some users on the Safaricom Network could download over 35GB of data per week as percomments by Bob Collymore. Please read more on how TCP H2H and P2P flows work here. Many ISP’s engage engineers proficient in layer3 operations (CCNP’s, CCIP’s, CCIE’s etc ) to provide expertise on a layer 4 issue of TCP H2H and P2P flows. You cannot control TCP flows by using layer 3 techniques. IP Network engineers are assigned the duties of transport engineers. Good luck with that Mr-CTO-in-an-ISP-wanting-a-fair-access-policy-for-your-customers!
At the end of the day, there will be a very small fraction of ‘happy’ customers and a large group of dissatisfied and angry customers. The few happy customers flat rate revenues are not able to cover all costs as the unhappy customers churn. If on the other hand these bandwidth hogs paid by the GB, the story would be very different. This is what operators are realizing now and moving with speed to implement. Safaricom is not the only one affected by this; Verizon, AT&T, T-Mobile in the US are all in different stages of doing away with unlimited service due to their unprofitable nature.
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In my analysis, two things are bound to happen here : 1.0 While Safaricom continues to say Unlimited plans are not profitable, they will be interrupted by Airtel and Orange who will offer the same with a smile on their faces. Do you remember what happened with voice/sms? Safaricom could not charge less than Ksh.8 per minute, Airtel came along and was charging Ksh.6 and eventually Ksh.3! Safaricom ended up charging Ksh.4 to compete with that! Deja vu? 2.0 Since Airtel and Orange have fewer data subscribers, this could be their chance to grow their respective subscriber numbers. This might not be a long-term strategy but I foresee a scenario where they are going to pretend they are the people's darlings by offering 'True Unlimited' plans with proper speeds that are higher than the 128Kilobits/Sec(16Kilobytes/Sec) being offered by Safaricom. Will that be sustainable? Probably not! However,this is going to be the tipping point of mobile data in Kenya. If the market leader stays put and refuses to improve their services, they lose. If they change their strategy, they lose! As we speak, I'm looking at 5 people who will shift to other networks in the next few days due to frustrations with Safaricom. We have 3 service providers with 3G > ,I wouldn't mind seeing them share the number of data subscribers equally... On 19 April 2012 10:23, Kevin Mutuma <kkmtumah@gmail.com> wrote:
QueenB Feeling the pressure...this is good for the competition.:-)
Why Unlimited Internet is a Big Revenue Drain for Operators<http://tommakau.com/2012/04/19/why-unlimited-internet-is-a-big-revenue-drain-for-operators/>
The announcement by Safaricom that it’s doing away with its unlimited Internet bundle did not come as a surprise to me. I had discussed the historical reason behind the billing model that is used by ISP’s and mobile operators in a *previous blog post here<http://tommakau.com/2011/02/14/free-lunch-ending-for-isp-customers/> * in Feb 2011.
The billing model used in unlimited Internet offering is flawed. This is because the unit of billing is not a valid and quantifiable measure of consumption of service. An ISP or mobile operator charging a customer a flat fee for a size of Internet pipe (measured in Kbps) is equivalent to a water utility company charging you based on the radius of the pipe coming into your house and not the quantity of water you consume (download) or sewerage released (upload).
What will happen if the local water company billed users by a flat rate fee based on per-centimeter radius of pipe going into their homes rather than volume of water consumed? A user with a pipe of radius that is 1% more than the neighbor enjoys 2% more water flow into their house (do the math!). The problem is that their bills will not differ by 2% but by 1% based on the difference in radius of the pipes. A 2% difference yields a 4% difference in consumption but a 2% difference in billing. The result is that a small group of about 1% users end up consuming about 70% of all the water. This figure is arrived at as follows: A marginal unit increase in resource leads to a near doubling of marginal utility. This is a logarithmic gain (Ln 2=0.693 which means that 69% of utility is enjoyed by about 1% of consumers) . This is the figure issued by Bob Collymore the CEO of Safaricom who said that 1% of unlimited users are consuming about 70% of the resources. This essentially means costs could outstrip revenues by 70:1. This does not make any business sense. Not even a hypothetical NGO engaged in giving ‘free’ Internet through donor funding can carry such a cost to revenue ratio. As to why ISP’s and mobile operators thought billing by size of pipe to the Internet could make money is beyond me.
*Bandwidth Consumption Is Not Linear*
One mistake that network engineers make is to assume that a 512Kbps user will consume double what a 256Kbps user does and therefore advice the billing team that billing the 512Kbps twice the price of the 256Kbps can cover all costs. This is not true. There are things or activities that a 256Kbps user will not be able to do online, like comfortably do Youtube videos. A 512Kbps user will however be able to do Youtube without a problem. The result is that a 512Kbps user will do much more Youtube videos as the 256Kbps user becomes more frustrated with all the buffering and stops all together attempting to watch online videos. The result is that the consumption of the 512Kbps user will be much higher than double that of the 256Kbps user. Other than Youtube, websites can detect your link speed and present differentiated rich content based on that. I’m sure some of us have been given an option to load a ‘basic’ version of Gmail when it detects a slow link. The big pipe guy never gets to be asked if he can load lighter web pages, rich content is downloaded to his browser by default while the smaller pipe guy gets less content downloaded to his browser in as much that they are both connected to the same website. The problem here is that the difference in content downloaded by the two people on 512K and 256K link is not linear or even double but takes a more logarithmic shape.
*Nature Of Contention: Its a Transport and not Network problem*
The second mistake that the network engineers make in a network is to assume that if you put a group of customers in a very fat IP pipe and let them fight it out for speeds based on an IP based QoS mechanism is that with time each customer will get a fair chance of getting some bandwidth out of the pool. The problem is that nearly all network QoS equipment characterize a TCP flow as a host-to-host (H2H) connection and not a port-to-port (P2P not to be confused with Peer2Peer) connection. There could be two users with one H2H connection each but one of them might posses about 3000 P2P flows. The problem here is that bandwidth is consumed by the P2P flows and not the H2H flows. User with the 3000 P2P flows ends up taking up most of the bandwidth. This explains why peer to peer (which establishes thousands of P2P flows) is a real bandwidth hog.
So what happens when an ISP dumps the angelic you in a pipe with other malevolent users who are doing peer to peer traffic such as bit-torrent? They will hog up all the bandwidth and the equipment and policies set will not be able to ensure fair allocation of bandwidth to all users including you. So some few users doing bit-torrent end up enjoying massive amounts of bandwidth while the rest doing normal browsing suffer. That explains why some users on the Safaricom Network could download over 35GB of data per week as per*comments*<http://www.the-star.co.ke/business/local/71869-safaricom-to-scrap-unlimited-data-bundles> by Bob Collymore. Please read more on how TCP H2H and P2P flows work *here*<http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.98.4474&rep=rep1&type=pdf>. Many ISP’s engage engineers proficient in layer3 operations (CCNP’s, CCIP’s, CCIE’s etc ) to provide expertise on a layer 4 issue of TCP H2H and P2P flows. You cannot control TCP flows by using layer 3 techniques. IP Network engineers are assigned the duties of transport engineers. Good luck with that Mr-CTO-in-an-ISP-wanting-a-fair-access-policy-for-your-customers!
At the end of the day, there will be a very small fraction of ‘happy’ customers and a large group of dissatisfied and angry customers. The few happy customers flat rate revenues are not able to cover all costs as the unhappy customers churn. If on the other hand these bandwidth hogs paid by the GB, the story would be very different. This is what operators are realizing now and moving with speed to implement. Safaricom is not the only one affected by this; Verizon, AT&T, T-Mobile in the US are all in different stages of doing away with unlimited service due to their unprofitable nature.
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-- Kind Regards, Moses Muya.
participants (8)
-
Allan O. -
Kevin Mutuma -
maina -
Moses Muya -
Philip Musyoki -
Stephen Munguti -
stephen wanjau -
wambugu esther