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Financial Services Board of

South-Africa

as an

approved

Financial Services

Provider

CBI

FSP 21606

Key Individual

(Cat. 1.15 and 2.12)

Also registered at

PIC

FSP 20878

(Cat. 1.8)

FPI

AFP 200200549

The Bargain Bin -

Internet Connectivity

I started trading forex with a regular dial-up line back in 2001. I experienced the slow speed and high cost involved as a problem. The connectivity was fairly unstable, every now and then you lost connectivity and had to dial in again to establish a connection. When trading, this could result in huge losses.

As soon as ADSL became available (2003), I signed up for an ADSL connection. The benefits were huge -

• you could have been connected to the internet for the whole month at a fixed rate, and

• the connectivity was much faster than on the dial up line. Also,

• the ADSL connectivity was more reliable and stable than the dial up connections.

There was however still one problem: You were limited on the amount of data that you could download by something called "bandwidth".

Fortunately times are changing, and better benefits are available now.

In March 2010 MWEB announced uncapped ADSL - this means that you are no longer limited by the amount of data that you can download. You can now download as much as you want with no limitations!

Uncapped ADSL:

Today, there are dozens of options, some ever so slightly cheaper than others. Some internet service providers (ISPs) are confusing matters further by promoting products like 8mpbs (megabits per second) services - which are not even on the market yet!

There is another question to be asked: should you stay on capped or move to uncapped?

But for now, there are three line speed options:

• 384kbps (kilobits per second),

• 512kbps,

• 4mbps.

Some of the early adopters will scoff at 384kbps and suggest that that isn't even classified as "broadband". A 512kbps is decent, while a 4mbps is really speedy (especially if you live fairly near to your exchange).

Once you've picked a line speed (and presuming you want an uncapped service), your decision will be whether to pay for data only or to bundle your line rental and data in one bill to your ISP. There is a downside, as you're still forced to pay your mandatory phone line rental to Telkom - you cannot bypass them completely.

The upside of including your ADSL line rental with your data access, is that any problems on your line can be diagnosed and handled by your ISP. They deal will Telkom on your behalf. The downside is that if you ever want to switch ISPs, you have to switch billing for your ADSL line too.

A final consideration: network quality (ie, speed and consistency) will differ from provider to provider. Some ISPs rely on upstream providers to provision bandwidth. Some have built their own networks. Feedback so far suggests that MWEB's network is robust and speedy. Many ISPs rely on Internet Solutions, and one cannot really argue with the scale of their network.

Here is a pricing comparison of uncapped ADSL services available from most of the larger ISPs.

A word of caution: be wary if you stumble across a "great" deal from a small ISP - they might lack the scale to compete (and service you) effectively, and you may find yourself looking for a new ISP in a few months' time. Some ISPs may also have harsh terms and conditions which could see the "uncapped" service throttled once a certain threshold is reached (60GB/100GB).

Pricing Comparison of Uncapped ADSL Services in South Africa

(April 2010)

384kbps uncapped ADSL

512kbps uncapped ADSL

4mbps uncapped ADSL

Source of information: Moneyweb

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Disclaimer

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.