iBurst says it can still compete
Neotel recently launched a wide range of high speed Internet and voice services, competing directly with the likes of iBurst, Vodacom, MTN and Telkom.
Neotel’s CDMA-based NeoConnect Prime offerings provide uplink speeds of up to 2.4Mbps, and is very competitively priced when compared with similar broadband offerings in the market.
iBurst may be the most vulnerable to Neotel’s consumer offerings with similar coverage areas and a similar product description. Neotel’s pricing is however very competitive when compared to similar packages from iBurst, questioning iBurst’s value proposition.
Neotel’s 10GB NeoConnect Prime service, for example, offers 10GB of monthly usage, 100 free on-net voice minutes, 30 free local and regional off-net Telkom calls, 50 free on-net SMSes and the device costs for R 599 a month.
iBurst’s similar Webphone service with a 10GB usage limit, unlimited on-net calls and device costs is priced at R1139 a month, nearly double Neotel’s cost for less value.
At the lower end, Neotel’s NeoConnect Prime offers a 2.5GB service which includes the device costs, 1 000 Neotel-to-Neotel voice minutes and 50 Neotel-to-Neotel SMSes for R 399 a month.
iBurst’s comparable service, offering a webphone with iCall, 3GB of monthly usage and unlimited on-net calls is priced at R 589 a month – nearly 50% more expensive than Neotel’s service.
Another advantage of Neotel’s service is that if offers a “best-of-both-worlds” 24-month contract where subscribers can cancel their contract at any time, leaving them only liable for the cost of the device. This is something which is not offered by iBurst.
It should be noted that potential iBurst subscribers have the option to go for an Internet-only service which reduces the monthly cost by R 100 a month.
iBurst state their case
Despite Neotel’s aggressive pricing, iBurst is confident that it still provides a good value proposition.
“Rolling out coverage is a challenge for any new wireless operator and iBurst has a large head start,” the company says. “iBurst has been designed to provide broadband access to a large number of users and has many technological features which make it superior to other technologies with regards to coverage and capacity.”
iBurst also said that while the claimed maximum speeds of some of the NeoConnect products is 2.4Mbps, they have indicated that an average of 300-600Kbps is more likely.
“That equates to the average iBurst speed. We acknowledge that their 10Gig offering is very competitively priced, but the lower end packages do not compete with iBurst.”
A question on the lips of many iBurst subscribers is whether the company will cut their charges to make it more competitive.
iBurst said that it already competes successfully in a competitive broadband market and will continue to provide a competitive offering in a dynamic market place.
“We continuously review our costing structures so that we can pass on savings to customers as soon as possible. We cannot comment on any imminent reductions.”
At 1Mbps iBurst’s peak speed is slower than Telkom’s 4Mbps, Vodacom and MTN’s 3.6Mbps and Neotel’s 2.4Mbps.
iburst says that it has been testing a 2Mbps modem, but said that it is more expensive than their current hardware and will not replace the current modems.
“We are in the process of determining how the 2Mbps modem will fit into our current product offering. iBurst continues to provide an average throughput on par or better than our competitors, regardless of theoretical maximum speeds advertised,” iBurst concluded.
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