Thursday, September 23, 2004

"GMISPs" in Latvia and other remarks

No one really knows how many broadband connections there are in Latvia. Lattelekom's internet service provider (ISP) Apollo estimates there will be 40 000 DSL subsribers by year end, perhaps 100 000 in a few years. However, Ingmars Pūķis, the director of Apollo, told my newspaper that no one really knows, since some high speed connections (DSL at 2Mbps) can be divided and resold to other users that Apollo is unaware of. TeliaMultiCom has a couple of thousand cable internet users, and there are a growing number of "triple play" customers at Baltcom, who subscribe to cable TV, cable internet and telephony services. But even a fat cable internet subscription or a corporate grade "radiolink" to Telia Latvija (no longer connected to MultiCom in any way) can be resold. Since the resellers sometimes operate "informally", call them Grey Market ISPs (hence the acronym in the title -GMISPs)
One of my colleagues, call her Inguna, might be a typical "unaccounted for" broadband user. She and her partner share a connection (two PCs, an extra charge for the second computer) for about LVL 16 a month, which is about what HomeDSL from Lattelekom/Apollo costs. She says their neighbor, who has DSL, says their connection is faster. There is limited customer service, but there have also been only a few breakdowns. It seems that only a few people set up and run what may be a GMISP in a Riga suburb. If this is typical, there can be hundreds of GMISPs in Riga alone.
While this may mean less revenue (directly) for the "majors" -- Lattelekom and TeliaMultiCom– it also means that the potential broadband content audience is bigger than any official figures.
Watch for Lattelekom to make some strong strategic moves into content in the coming six months. Also consider that the company may start migrating all of its voice, eventually all services, to a next-generation IP network. This is what British Telecom is doing and Lattelekom MD Nils Melngailis is an admirer of BT's strategy.


Anonymous said...

Somehow I think Apollo's DSL service is so bad, sharing it via a local network would only spread the disease. I had an interesting finding not long ago - not long ago I lived in the center of Riga and was looking for a decent broadband connection, DSL was out of the question because I had that before and I definately wasn't happy with it. I called up all the major ISP's and the only options I got was either DSL or a radiolink, but in order to get that, I had to find 3 or 4 other people in the near vicinity who would use it aswell, otherwise the monthly cost would just be way too high. But then something came up, I found a company that I previously had't heard of before and it turns out they have an optical switch in the attic of the building right next to mine. All in all, I negotiated that I would be able to connect to that switch, a direct 100mbit connection to the backbone of LIX for a whooping 10 Ls / month. Can you believe it? I couldn't believe it at first, because a week before I was using Apollo's DSL for 24 Ls / month and with a crappy 256kbit! And after the initial setup, I logged on to my favourite site and checked the bandwidth - I got an incredible download speed of 5MB/s from ir and was utterly speechless. Now the price is 34 Ls / month with a limit of 1GB for international traffic, which is OK, since I don't live there anymore, I keep my own personal linux based server for any needs that may arise in the near future.

Juris Kaža said...

A valuable comment. It shows you are lucky in picking the right building to live in :). Personally, I have not had much trouble with HomeDSL, which now costs around LVL 15 per month. The only thing is the speed. I also don't get the point of the new MDSLPro, which is HomeDSL plus anti-virus and firewall, plus they install all this "free" and give you 320 kbps downlink (instead of 256). I Big deal! It costs LVL 29 per month, double the "non" pro price. What you are really paying for is the anti-virus software and the labor of setting up the connection and configuring the PC (hah, with my Mac, they would earn their money simply because Lattelekom doesn't understand Macs).
If I am going to pay double, spare me the antivirus (Mac, right ?) and I already have a firewall for, I think less that LVL 1 per month, Give me at least 512 kbps. Or why not the whole 2 Mbps that the DSlams were delivering last summer for a while when the slowdown software was removed?
The comment, however, shows that I am right in saying there are many informal broadband users whose "band" is a lot bigger that that offered for a similar price by the big boy, Lattelekom.