Neotel’s consumer offering: first impressions

Neotel will officially launch it’s suite of consumer products tomorrow. Up until now, though, they have not promised much publicly, and will deliver much more than expected.

Those details will be announced at a briefing in Joburg on Thursday morning, but the company hasn’t been closed for business until then. Neotel launched its first consumer product (NeoConnect Prime) a little less than a month ago, and this has been available to customers who were willing to be part of the operator’s alpha phase.

What’s impressive is that at no point did the operator assume anything. Neotel execs did not sit in a room with a whiteboard saying “we can only offer this amount of data every month”, “here’s a piece of hardware we found in Taiwan, I’m sure we can just use this”.

Neotel did exhaustive research while the company was trying to find out what consumers wanted, and how best to satisfy those needs. At a briefing last week, Neotel staffers used marketing speak; phrases like “key pain points”, but when you think about it, it’s a brilliant way to design a new service. Find out what customers hate about current offerings. And I mean everything. Among Neotel’s findings: the promised versus actual speeds of internet access, data caps, lack of voice quality, difficulty in actually getting a service, installation times, the list literally goes on and on.

It’s as easy as thinking about your experience with the incumbent, and you’ll be able to pinpoint your “pain points” very quickly. In fact, they’re probably more like torture points.

So what is Neotel offering?

The operator prides itself on the fact that the NeoConnect Prime product, and any other services it launches, has been designed to fulfil specific needs. Consumers have said they wanted voice, internet and SMS, and this product has all three. Personally, I’m not too sure why anyone would want to send SMSs from a “landline”, but I’m probably missing some key target group?

The device is simple. It looks like a normal (fixed-line) phone, but is slightly bigger. Neotel’s consumer business unit staff are quick to point out that the phone is the first of its kind in the world. It plugs into a power socket and has a small aerial that sticks up on the right. A back-up battery provides power during load-shedding times (my unit’s battery lasted about three days with pretty average usage until it died, but more about that later). That’s the great thing about this phone – it’s a “landline” phone with no fixed-line.

To connect your PC to the internet, you simply plug a USB cord into the phone and into the USB port of your laptop or computer. A disc with the software and drivers for the phone is easy to install.

Browsing the internet seems to be faster than a DSL line, and one of the reasons for this is that Neotel connects directly to the SAT-3 underground cable that links us to the “world” (or London to be exact).

The company promises a peak speed of 2.4Mbps, with an average speed of 300 to 700kbps. This is a big departure from some of the other operators who would simply tell you that a 3G service for example will give you download speeds of 3.6Mbps, a speed that is almost impossible to attain. Neotel also says it will upgrade this capacity to a peak of about 3.1Mbps in mid-2008.

During my rather limited testing last weekend, I experienced average speeds of about 600 – 700kbps. Ironically speed tests I conducted performed better when I was benchmarking against a server based in London (about 800-900kbps) than a server in South Africa (about 500kbps).

The offering from Neotel also promises carrier grade voice, and staff explicitly say this is a “guarantee to the customer”. No calls I made “broke up” or dropped or were scratchy at any point. The wireless service uses different channels for both voice and data so congestion isn’t a factor, and one won’t need to take priority on a single network. Neotel also says international calls on its network will be crystal clear.

So what does this service cost? The NeoConnect Prime product is priced at R599 per month and will get you 10GB of data capacity (more than decent), 1 000 Neotel to Neotel voice minutes (not worth all that much, considering its doubtful you’ll know many people on the network), 30 Neotel to Telkom local/regional voice minutes (pretty useful), and 50 Neotel to Neotel SMSs (also not at all that useful, but as more people switch, could become valuable).

Tariffs

Out of bundle data (over 10GB on the NeoConnect Prime product) – 8c per MB (incidentally, a bargain)

SMS (Neotel to Neotel) – 10c

SMS (Noetel to mobile) – 35c (good value)

The operator has also launched two “Lite” products, offering obvious value, depending on what type of user you are (are you going to want to download a lot, or mainly phone and check e-mail?).

With the announcement tomorrow, Neotel is set to offer a suite of products to match most consumer needs (high data use, off-peak use, etc).

As with any launch though, services aren’t automatically going to be available in every city, or even in every suburb. This reminded me of the period around 1993 when cellphone coverage was slowly rolled out to the metropolitan areas and smaller areas like my hometown Kimberley, which finally got their one cellphone mast a few months down the line.

Neotel’s focus at launch is Johannesburg and Pretoria. Most major suburbs are covered (think Joburg CBD, Sandton, Rosebank, Randburg, Bedfordview, Menlo Park, Waterkloof Glen, Pretoria CBD) and the coverage area is expanding almost daily. Cape Town and Durban will follow shortly after the announcement, and these details are due to be released tomorrow.

Hearing horror stories from friends this week about how DSL faults took six weeks and two technician visits to sort out make me glad I never got DSL installed at home, even though I’ve been threatening to for ages.

If I were the incumbent right now, I would be concerned. A massive country-wide network with the potential to deliver much higher speeds via DSL than any competitors’ technology just isn’t living up to that promise.

Neotel NeoConnect discussion

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