Broadband providers’ guns jam
|September 5, 2005|
The major broadband providers displayed their services and took questions at a “broadband shoot out” held last week in Johannesburg, but failed to differentiate their services to the user.
The major providers of broadband Internet access met together last week Thursday at a "broadband shoot-out" organised by the South African Institute of Electrical Engineers (SAIEE) to give insight into their services and allow the audience to make a comparison between them. However, the event turned out to be somewhat futile, certainly in terms of providing users with an idea of what service would suite them best.
The "shout out" was not a physical one. MTN, Sentech, Telkom, Vodacom and Wireless Business Solutions (WBS) – whose product is iBurst – together with a host of other smaller players did not line up their hardware and demonstrate speeds live against one another, but rather demonstrated them separately and gave their marketing information.
The shoot out was therefore limited to a presentation given by each of the five major providers. The difficulty with this was that they mostly gave the same information. This included the theoretical speeds their technology could offer, how the technology worked and their different pricing options.
After the presentations, about the only real differentiation that was made was that Telkom has a fixed line offering and the other four were mobile.
MTN and Vodacom have a cheaper offering through General Packet Radio Service (GPRS), a slower solution to 3G and Sentech and WBS’s offerings are more in line with the cellular networks data card bundles, although their technology is theoretically capable of much greater speeds than the cellular networks offering.
To the SAIEE’s credit, they made provision for a host of questions afterwards. Firstly by the chair, Neil Smuts, a communications engineer consultant and former MD of Sentech, who asked a number of questions, followed by the SAIEE, the Internet Service Providers’ Association (ISPA) and my broadband watchdog, MyAdsl.co.za. Lastly the media and floor were given the opportunity.
While the questions did give insight into technical issues around how the technology works, most of the difficult questions were avoided. Perhaps the most telling question was the last one made by a member of the floor who asked said, "You’ve all given me your marketing information and told me you offer broadband services. But I have tried all your services and don’t get the speeds you advertise, so which service do I chose?"
To this, all the players responded with, "mine!"
Navigating through the maize
However, after asking a number of questions individually, I was able to differentiate the offerings and make some kind of sense.
With regards to Telkom, it is a fixed line service and after a bit of a shaky start, its ADSL product has been gaining acceptance in the market as a good option for a permanent connection. While Telkom is exploring the wireless option called Wimax, they have not implemented as yet.
It becomes harder for the user after that because the other four providers are all mobile service providers. They square up in two camps, the cellular networks on one side and the Wifi providers on the other.
When asked how does one differentiate oneself from the crowd, Chris Ross, Vodacom managing executive: products and services, said its all about offering services which are convenient and easily accessible.
If the user does not use a lot of data, then the cellular networks are definitely the way to go, offering R2 a Megabyte (MB). In terms of services that are convenient and easily accessible Vodacom beats MTN hands down. They have a lot more data bundles to cater for different usage patterns and their 3G/one Gig/data card option can be bundled with a PC for R100 extra a month or a laptop for R200 extra a month.
MTN in contrast offers 3 data bundles of 10 MB, 100 MB and 1000 MB and their 3G/1 Gig/data card option is R50 more a month. A Vodacom user can therefore get a PC, data card and one Gig bundle for R699 while the MTN user can only get the data card and a Gig for R650.
When asked about this at MTN’s launch of 3G, Brian Seligmann, MTN’s marketing executive in charge of 3G, said the difference was that after the Gig of data, the out of bundle rate was R1.25 as opposed to Vodacom’s R2.
However, last week Seligmann conceded that the average 3G user on a bundle is only using between 200 MB and 500 MB. The cost saving after that is therefore null and void for most of the users. Seligmann said MTN would therefore be introducing other bundles in the next three to four weeks to compensate for this.
The Wifi providers
That leaves Sentech and iBurst. Winston Smith, Sentech MyWireless manager, conceded that there is very little cost difference between the cellular network’s data card offering and the Sentech equivalent.
"The problem is that 62% of our cost is international bandwidth. In terms of speed, MyWireless could be ten time faster than 3G, but because of the cost it is only marginally faster with a maximum of 512 kilobits per second (kbps) as opposed to 3G’s maximum of 384 kbps.
"The networks also have the added advantage of already having a subscriber base of millions and GPRS coverage of the whole country. Sentech only has coverage in the major metropolitan areas and is still rolling out the network," he says.
Smith says the difference lies in the cheaper MB rate offered by Sentech.
The company’s entry level contract comes in at R199 for 200 MB and free Internet access and is generally cheaper than the cellular networks’
"The main thing though is that with a company like Sentech, the user is investing for the future. As Sentech’s coverage increases and the cost of bandwidth comes down, so we’ll be able to offer a better, faster service at a cheaper cost," he says.
As a generalisation, the really serious/business user will have ADSL, the entry level user will use the cellular networks, the email/mobile businessman will use the cellular networks or the Wifi providers and the really heavy users will use both ADSL and Wifi. A choice differentiation then needs to be made between the different providers of each.