WiMax pricing explained
iBurst, in partnership with Vodacom, launched their much anticipated WiMax offering last year. The service comes in three different flavours, namely:
- Broadband: Best effort broadband service including capped internet access;
- Assured Premium (uncontended): Un-contended, uncapped, guaranteed service; and
- Assured Standard (low contention): Uncapped, low contention ratio’s, guaranteed service including options to burst up to 512kbps.
Pricing too high
The pricing of iBurst’s WiMax offerings were heavily criticised for being uncompetitive in the broadband market.
A 512 Kbps WiMax service with 5GB of shaped bandwidth costs R855 a month while a 1Mbps service with 5GB of shaped bandwidth costs R992 a month. These prices increase to R1 197 and R1 334 respectively when opting for a 10GB usage limit.
The WiMax pricing is significantly higher than comparable ADSL offering, begging the question as to whether iBurst’s WiMax offering provides any value proposition in the broadband market.
Low contention ratio
The one major advantage of this WiMax product, unbeknown to many consumers and businesses, is the very low contention ratio. The contention ration for the iBurst WiMax broadband product is 3:1. Such low contention rations are typically associated with leased line services aimed at the corporate market rather than broadband connections.
Internationally contention rations of 50:1 for residential users and 20:1 for business users are commonplace, clearly indicating how low a 3:1 contention ratio actually is in the broadband market.
Telkom currently has an ADSL contention ratio of 20:1 for its local access network, but it is likely that this figure will be much higher for its international bandwidth portion.
When speaking to current iBurst and Vodacom WiMax subscribers it is clear that they are happy with the quality of service, adding that their service usually performs at very close to the advertised speeds.
In a price sensitive market this very high quality of service may however not be a deal clincher in either in residential and small business market. The slow take-up of the iBurst WiMax service confirms that users will rather opt for a more affordable option despite the promise of very stable throughput with WiMax.
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