A good business strategy for Sentech.

tasty

Member
Joined
Aug 15, 2003
Messages
19
With all the forthcoming deregulation it would be prudent of Sentech to open-up their service, gain a massive market share, even at huge losses and wait for bandwidth prices to fall.

Bandwidth prices should, in theory, begin falling quite rapidly after deregulation, leaving Sentech in a very favourable position.

Are you listening Sentech?

“If we believe absurdities, we shall commit atrocities.”
- Voltaire
 

Turtle

Expert Member
Joined
May 2, 2004
Messages
1,882
Don't get your hopes up. Winston Smith of Sentech very recently stated, and I quote, "price will not likely come down in the next year". From:

http://www.mybroadband.co.za/news/modules.php?name=News&file=article&sid=291

<i>"Smith suggests that users not anticipate any real bandwidth price drop in the short-term. 'For the next year at least, what should happen is that we will increase the value of the service to the consumer rather than just decreasing the price'"</i>

Considering all the supposed competition coming, strange how he seems to already know that they don't need to respond with a price drop.

Sentech are not aiming at getting a massive market share, rather than a large user base with low price (which is how broadband is sold in other countries) their strategy is to keep a small user base but charge a very high price, like they are now. Telkom does exactly the same with their ADSL service. It's easier for them to make money that way. The fact that Sentech don't think competition is going to change that, tells me that it is very likely that all the "new" competitors e.g. Vodacom are planning on following a similar strategy, i.e. they don't plan to make affordable broadband for the masses, they plan to keep 'pretending' that broadband should be some sort of "premium" service that only the wealthiest can afford. I'm guessing all five wireless Internet companies will try to do this, although I'm not sure yet about iBurst. So this is what is called a "market opportunity": for a sixth (wireless?) Internet provider to enter the market with pricing, product structure and marketing aimed at signing up hundreds of thousands of mostly low-bandwidth users.
 
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