Telkom ADSL versus Vodacom HSDPA
Technology
Telkom’s DSL is the superior broadband technology in use in South Africa today. Its current DSL 4 Mbps service offers double the speed of its nearest rival, and its fixed line characteristics ensure higher reliability and stability.
Telkom is also upgrading its DSL network to ADSL 2+, a technology which can offer speeds of up to 20 Mbps.
Vodacom’s HSDPA service currently offers a maximum throughput of 1.8 Mbps, but users can look forward to a 3.6 Mbps offering in the not-too-distant future.
While this wireless service will always find it tough to compete against ADSL in the speed department, its mobile characteristics and the ability to take your broadband connection with you on the road makes it a favorite among many consumers.
Price
Vodacom’s HSDPA offering is more affordable than Telkom’s DSL 4 Mbps service for low monthly usage limits. Its 2GB HSDPA service, priced at R 389-00, is the most affordable broadband service in its class.
For higher usage –typically 3GB and more – Telkom’s DSL 4 Mbps service makes more financial sense. Price sensitive users also have the option of Telkom’s new DSL384 offering with a 1 GB usage allowance which will retail for R 199-00 from August.
Uptake and market share
As in most other telecoms environments economies of scale are crucial to ensuring lower prices and improved service offerings. It is therefore not surprising that broadband providers are fighting fiercely for market share.
More customers will not only allow them to reduce prices and offer improved services, but also give providers a ‘large bandwidth pipe’ into the user’s home which they can then utilize to provide revenue enhancing services like IPTV or video-on-demand.
Telkom is currently still dominating the broadband space with around 300 000 ADSL subscribers. Vodacom is slowly closing in on that number, and has notched up 200 000 subscribers since their launch around two and a half years ago.
According to Telkom’s latest ADSL subscription figures it is growing its ADSL subscriber base by around 11 000 new users per month. This strong growth is likely to continue with the launch of Telkom’s DoBroadband offerings and its price reductions which will kick in next month.
In comparison, Vodacom grew by only 6 400 during the same period, but this was preceded by six months of strong growth – somewhere in the region of 10 500 new users per month.
HSDPA uptake increasing
While ADSL uptake figures over the last six months to March 2007 are higher than that of Vodacom’s HSDPA offering, the uptake of HSDPA has accelerated drastically since then.
Vodacom announced a massive price reduction of its 3G/HSDPA offerings in March, something that saw the number of subscriptions skyrocket. Since the announcement Vodacom has increased its subscriber base from 139 000 to around 200 000, a growth rate of close to 15 000 per month.
This increase represents the fastest growth rate of any broadband service since the launch of ADSL back in 2002.
Vodacom and Telkom spreading their wings
Both Telkom and Vodacom are investing in new technologies which may give them an edge in the broadband space.
Telkom has recently launched their WiMax broadband service, utilizing the technology mainly as an ADSL replacement service.
Vodacom is also not relying solely on its HSDPA offering in the growing broadband market, and has recently started selling iBurst services through its distribution channel. The cellular giant said that it will further launch ADSL and WiMax offerings before the end of the year, making it a true one-stop broadband shop.
So while Telkom holds most of the cards when it comes to local and international bandwidth and can bank on ADSL as a mature broadband technology, Vodacom’s large distribution channel and massive customer base makes it a formidable force in the broadband arena.
There is definitely no clear winner in the broadband race yet, and it is likely that we will see increased investments and larger marketing budgets to try to win the favour of the growing broadband market.
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