Image: Bitco CEO, Jarryd Chatz

JOHANNESBURG - In the world of business, you get what you pay for. There are, in fact, a number of ways to get fairly inexpensive internet connectivity. Businesses can still use FTTH lines if they wanted to, but those lines will be congested, contested, shaped and not ideal for what many businesses need in a connected world.

Business fibre comes at a premium, because it’s a direct line between a business and its ISP. Even for lines that aren’t direct, but aren’t contested upstream or down, it can be considered a dedicated connection wholly for the use of that business. And it’s simply an economy of numbers game. ISPs need to earn a revenue, and for FTTH they can lower the costs, because there are many more customers paying for that single line. For business connections, there are no additional customers to support running that line.
 
Don’t forget that most business connections come with an SLA, which is extremely important to businesses who put compliance and governance at the top of their list of priorities. But ultimately, the more capable a line, the more it will cost to run.
 
What costs are involved in delivering internet connectivity?
 
Laying the infrastructure and maintaining it. Hiring, upskilling and maintaining the staff required to deliver a high-quality service in alignment with SLAs. The cost of electricity to deliver internet. Marginal transit fees.
 
Is there a way to cut costs?

 
Internet costs will continue to decrease in a free market, where competitors can innovate and compete. But that may not be quick enough for some businesses. The next step is to actively reduce costs. That makes sense, but there is caution to this.
 
One of the easiest traps businesses fall into is taking a two-dimensional approach to cutting costs. If the internet is expensive, for example, then it needs to be compromised to save money. Instead, the internet grants access to a wide array of products and services that can boost productivity, bolster marketing, reduce waste and accelerate speed-to-market. Those factors can have a big impact on the bottom line, while simultaneously providing alternative avenues to cut costs. Take cloud computing and SaaS, as well as IaaS, all services which can significantly cut costs.

Jarryd Chatz heads up one of South Africa’s premier fixed broadband providers BitCo.

- BUSINESS REPORT ONLINE