Telstra hits back over bandwidth pricing claims

Claims by CloudFlare CEO are "factually incorrect" says telco

A Telstra spokesperson has condemned as "factually incorrect" claims about the telco's transit pricing made by DDoS protection and CDN provider CloudFlare.

CloudFlare CEO Matthew Prince wrote in a blog entry about the the relative cost of transit pricing around the world that "Australia is the most expensive region in which we operate, but for an interesting reason".

"We peer with virtually every ISP in the region except one: Telstra," Prince wrote.

"Telstra, which controls approximately 50% of the market, and was traditionally the monopoly telecom provider, charges some of the highest transit pricing in the world — 20x the benchmark ($200/Mbps). Given that we are able to peer approximately half of our traffic, the effective bandwidth benchmark price is $100/Mbps."

"To give you some sense of how out-of-whack Australia is, at CloudFlare we pay about as much every month for bandwidth to serve all of Europe as we do to for Australia. That’s in spite of the fact that approximately 33x the number of people live in Europe (750 million) versus Australia (22 million)," the CEO wrote.

None

A chart included by Prince that shows the relative cost of bandwidth assuming a benchmark transit cost of $10/Mbps per month (which is higher than actual pricing) in North America and Europe.

"We don't disclose exactly what we pay for transit," the blog entry states but was written to give "a relative sense of regional differences."

However a Telstra spokesperson said that figures cited by Prince "are far in excess of Telstra’s actual charges".

"For a customer in Australia wanting bandwidths around the benchmark Cloudflare are using, they are overstating our charges by a factor of 10," the spokesperson said.

"If Australians wonder why Internet and many other services are more expensive in their country than anywhere else in the world they need only look to Telstra," Prince wrote.

"What's interesting is that Telstra maintains their high pricing even if only delivering traffic inside the country. Given that Australia is one large land mass with relatively concentrated population centers, it's difficult to justify the pricing based on anything other than Telstra's market power. In regions like North America where there is increasing consolidation of networks, Australia's experience with Telstra provides a cautionary tale."

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6 Comments

Phil

1

I've seen that Telstra response elsewhere... someone needs to point out that it's specifically detailed in the blog as relative pricing, not actual.

Andrew

2

So... if CloudFare say Telstra is 20x over the average and Telstra say that's overstating the pricing by a factor of 10, is Telstra actually admitting they're only double the market price? And do they think we'll go "oh, only double, that's fine...".

Steve

3

Telstra cherry picked, was clearly stated near beginning prices were not real, only relative, and all figures in it appear to be around 10x.

e.g. easy to obtain transit in the US for around $1/mbps, particularly with the volumes Cloudflare would use, blog says $10/mbps, so 10x, other figures are around 10x as well, is very important to take into account these are relative prices which Telstra response ignored.

Alberto

4

Please link the Telstra spokesperson's reply

Rohan

Staff

5

@Alberto The full statement issued by Telstra is included in the article.

Chris

6

Judging by the Telstra spokesperson's response, I don't believe that they understand what peering is.
Peering is not just buying internet or transit bandwidth.
Peering is two networks exchanging traffic between each other's users freely, and for mutual benefit.

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