One-stop-broadband-shops gaining momentum
The South African broadband market is unique in that wireless services compete on an equal footing with ADSL. ISPs quickly realized that they needed to add wireless broadband products to their range in order to remain competitive.
While broadband uptake in South Africa is still sluggish in comparison with developed countries – mostly due to the high bandwidth costs – it is accelerating. Unlike developed countries – where nearly all broadband connections are fixed line services – a large portion of the growth in South Africa comes from the wireless broadband market.
Initially many ISPs, who were accustomed to selling dial-up accounts to consumers, only focused on adding ADSL accounts to their product basket, but some of them soon recognized the potential of incorporating wireless services.
Since then many larger ISPs have become one-stop-broadband-shops, offering all connection methods available in South Africa today.
Even operators like Vodacom have started to expand their product offerings to incorporate more than merely their own services. Vodacom has also announced that it will soon launch its own ADSL and WiMax services.
According to Nashua Mobile, the response to their wide product range is overwhelmingly positive. “We have had fantastic responses from both the consumer and corporate markets. The simplicity of one company offering multiple broadband services with one unified account and one helpdesk has really worked for us,” said Nashua Mobile.
Currently Nashua Mobile’s fastest selling product is HSDPA, with their unshaped ADSL service gaining momentum as well.
“The market response to the Verizon ADSL has been phenomenal, due to the service being unshaped and with international traffic routed via SAT3, the service offers low latency responses from local and international sites,” Nashua Mobile pointed out.
Expanding ADSL product ranges
Apart from selling a variety of different broadband technologies ISPs are also starting to resell ADSL services from various operators. Telkom, Internet Solutions and Verizon Business now have to battle it out to convince ISPs to punt their products to consumers.
Matthew Tag, MD of WebAfrica, says that there is a lot of enthusiasm among consumers about their new range of ADSL products.
While the Telkom-SAIX standard ADSL accounts are still his company’s most popular product, Tagg points out that Internet Solution’s ‘10 GB local only’ and 1 GB prepaid packages are their fastest growing products.
WebAfrica – who currently have over 15 000 ADSL subscribers, a tally that grows at around 1500 per month – said that their DSL complete and multi-realm accounts are proving to be popular.
“A lot of enthusiasm about our DSL complete has been expressed and orders are flowing. Customers love the fact that they don't have to deal with Telkom. The multi-realm offering for unshaped accounts has also been utilised by the tech savvy customer,” Tagg said.
Increased competition
The increased competition in the broadband provider space is good news for ISPs and consumers, giving more choice and providing businesses with more negotiating power.
While most industry players agree that the growth in the broadband market will continue for many years to come, this may drive down margins which may put pressure on some smaller players.
“I expect the growth rate to increase even more as the market liberalisation starts to kick in. The flipside is that margins are going to become even slimmer and we look forward to operating in an ever increasing competitive landscape,” Tagg pointed out.
All of this is however good news for consumers who have been suffering for a long time as a consequence of a monopolistic fixed line arena. With new broadband players entering the market and ever improving access making its way into SA, local consumers are starting to see the benefits of a truly competitive telecoms space.
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