ADSL in 2009
An increasingly competitive broadband market, licensing changes and more affordable international bandwidth should all play a role in bringing South African consumers faster and cheaper broadband services.
ADSL is however still controlled by Telkom which raises questions over what consumers can expect in 2009 when it comes to the country’s only fixed-line broadband offering.
Three of the largest ADSL players in the consumer and business ADSL markets, Vox Telecom, Internet Solutions and Nashua Mobile gave their views future ADSL growth and SEACOM.
Growth
Vox Telecom CEO Douglas Reed expects fair growth in 2009 – in the region of 30%. This will however be offset with churn, and Reed indicated that he would be happy with a net growth of 10%.
Internet Solutions said that it anticipated good growth in 2009 and that its ADSL service offerings would not show signs of reduction at all. The company also indicated that the bandwidth usage per line was steadily increasing.
Nashua Mobile, which has a strong consumer presence in the ADSL market, said that consumers were starting to understand the value of having an always-on connection in their homes which in turn was stimulating growth.
“Telkom is starting to improve its turnaround times for provisioning and installing ADSL services for our customers, which bodes well for our growth in 2009,” the company said.
SEACOM
SEACOM has become a beacon of hope for many broadband subscribers and businesses who are hoping that its arrival in mid-2009 will mean cheaper bandwidth, lower broadband costs and higher usage limits.
Reed said that SEACOM’s operations in South Africa would mean that prices would come down, but not to very low levels like sub-R100. Reed suggests broadband pricing in the region of R200 to R300 for a ‘proper broadband service’.
Nashua Mobile’s managing director Chris Scoble agrees, saying that the wholesale price per-MB will definitely come down over the coming months and that ISPs will pass savings on to the consumer. “We also expect local bandwidth to become increasingly commoditised, to the point that it is extremely cheap,” said Scoble.
“SEACOM will also improve data speeds, which should in turn encourage more usage because Internet users are able to do more in a web-session and have a richer experience. In short, data costs will probably fall on a per MB basis, but people will do even more with the Internet that they do now, meaning that their monthly spend will probably remain constant.”
Internet Solutions is however less bullish on SEACOM’s impact on the broadband market, saying that it is "not anticipating to have a major true cost change, as the international links alone are not the only cost to bear in mind, they are one input cost.”
“There are the costs of connecting to the incumbent for instance, management of the network and services coupled to ADSL that also have an impact – the reality is that the international bandwidth costs make up a much smaller component of the input costs that people may be led to believe. It is highly unlikely that you will see the cost savings that have been touted around actually coming to the end user account.”
New service offerings
2009 should see many new service offerings in the ADSL market, and despite not giving away too many company secrets the three companies did indicate what their clients can expect from them in future.
Internet solutions said that it was working on new products in all areas of business, and in particular the business ADSL space. The company said that its new offerings would ensure higher speeds for ADSL and enhanced services with out-of-band failover.
Vox Telkom is launching a new Corporate ADSL product where the company feels that it has an element of exclusivity. “At this stage looks like we have a winner but early days,” said Reed.
Nashua Mobile said that it was looking at putting more focus on the SME space and provide more customised solutions to small and medium sized business customers. “We are also looking at more effective bundling of ADSL products with wireless data and/or handsets in order to give clients a converged always-connected product suite,” said Scoble.
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