Broadband competition hotting up
Two recent changes in the local market have drawn attention to the fact that competition is increasing. The first is the one-price ADSL service starting at R135.00 per month from the ADSL reseller Nashua Mobile. The other is iBurst’s proclamation that they will become a one-stop shop by adding ADSL and HSDPA to their product line.
This all spells good news for consumers who are hoping to not only get a better deal but also improved service.
There are many local broadband resellers, including MWEB, Vox Telecom, Nashua Mobile and Altech Autopage, who are able to supply their clients with a wide range of broadband product offerings to serve their needs.
It is not unexpected for these resellers to offer a wide range of services, but the latest trend shows that broadband providers are starting to extend their own product offerings to include some of their traditional competitor’s products.
Vodacom was the first operator to offer a ‘competing’ service to its clients, in this case iBurst. But they haven’t stopped there.
The mobile provider recently announced that they will also be getting into the ADSL market and expect to offer their own ADSL service before the end of April – most likely in the form of a white label SAIX based package.
iBurst has now also joined the fray and is following in the footsteps of Vodacom. They offer prospective clients a choice between their own iBurst service, ADSL and HSDPA. The company said that this was a logical progression for the company for them to increase their market share and serve clients who fall outside of their current footprint.
Price decreases
The scramble for market share means that some companies are aggressively cutting prices to attract customers.
Nashua Mobile’s latest broadband promotion offers both an ADSL service and an iBurst package at prices significantly lower than what the service retails for from either Telkom and iBurst.
Nashua Mobile’s one-price DSL 384 service with a 1 GB monthly usage allowance is currently on special at R 135.00 per month. Compare this with Telkom’s price of R 199.00 per month for a similar service and it is clear that the company is most likely selling the product below cost.
The price of R 39.00 per month for iBurst’s entry level product – which retails for R 49.00 directly from iBurst – is another indication of the aggressive price cuts from Nashua Mobile.
iBurst also recently cut the price of some of its own packages to make it more attractive to people shopping around for a broadband service.
The wireless provider however seems to have a different plan with its ADSL products which are not particularly well priced. iBurst sells its 1 GB ADSL accounts for R 100.00, 2 GB costs R 200.00 and 3 GB are priced at R 272.00 – significantly higher than current market rates.
iBurst’s tariffs for their HSDPA products are in line with industry standards at R 249.00 for a 500 MB package, R 349.00 for 1 GB and R 449.00 for a 2 GB service. These prices are for 24 month contracts which include an HSDPA modem.
Adding voice to the mix
The latest trend for broadband providers and resellers is to add VoIP services to the mix.
MWEB and Vox Telecom led the way with their Broadband Talk and ADSL Phone products respectively and iBurst popped onto the scene a bit later with their iCall service.
The fixed line consumer voice market was traditionally dominated by Telkom, but increased competition is looming with an ever growing broadband population wisening up to the price benefits provided by VoIP services.
And with Neotel getting ready to launch its own converged Internet and voice service to residential customers one can expect even more competition and price cuts later this year.
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