Where ADSL is going in South Africa: capped vs uncapped

While uncapped ADSL accounts remain popular, there is a strong growth in the capped product market as these accounts become cheaper and more flexible. This is according to South Africa’s leading ISPs.

MWEB’s head of products Rihana Hoosain said they have seen more movement in the capped market with higher capped accounts becoming more affordable and flexible.

However, uncapped plans still remain MWEB’s biggest growth contributor. “Cap upgrades are increasing steadily, but we see a lot more movement from capped plans to uncapped plans,” said Hoosain.

Webafrica’s Greg Wright said they are seeing “customers upgrade to larger capped accounts on a more frequent basis versus 12 months ago”. He said the growth in sales of larger capped accounts is on the increase.

OpenWeb CEO Keoma Wright said they have seen a big increase in capped account sales. “We have also noted that many clients are now opting for a minimum of 100GB and upwards, where our 50GB package used to be popular last year,” said Wright.

Cybersmart CEO Laurie Fialkov said large capped accounts were becoming more popular because of the trend of moving away from uncapped services.

Shane Chorley, executive head for carrier and connectivity at Vox Telecom, said they are seeing strong growth in capped products.

“We are seeing interest and increased sales in our 300GB packages, and have also noted that some of the MyBroadband readers are asking us to launch bigger packages,” said Chorley.

Here are predictions from some of South Africa’s top ISP executives about the future of ADSL and VDSL data products in South Africa.


 

Cybersmart CEO Laurie Fialkov: there is a move from uncapped to capped services

Laurie Fialkov
Laurie Fialkov

Fialkov said there is a move from uncapped to capped services. He said it is in line with global trends where accounts were initially capped, then became uncapped, and then migrated back to large capped accounts.

“I think the move back to capped ADSL and VDSL products is as a result of the public realising there is no such thing as a free lunch,” said Fialkov, referring to the shaping of certain protocols on uncapped packages.

He said customers wanting quality over cheap services was also a factor. “We are even seeing the ‘value seekers’ opting for capped accounts with lots of after-hours data.”

 


 

Webafrica’s Greg Wright: there is a shift back to capped products

Greg Wright, Webafrica
Greg Wright

Wright supported Fialkov’s view, saying that he saw the market favouring uncapped products for a few years, but more recently the trend had shifted to capped products.

“We believe capped products will rule the roost for some time to come,” said Wright.

“In terms of quality versus price, provided that Telkom continues reducing wholesale IPC pricing, consumers should benefit from better value all-round.”

Wright also expects moves in the ADSL market before the end of the year after Telkom’s recent IPC price cuts.

 


 

MWEB’s head of products Rihana Hoosain: there will be increased demand for uncapped and large capped plans

Rihana Hoosain
Rihana Hoosain

Hoosain said with the increase in streaming and related online services, they expect the demand for data to continue.

“The result will be increased demand for uncapped and high-end capped plans, as well as higher line speeds.”

 


 

OpenWeb CEO Keoma Wright: capped services will always be superior to uncapped products

Keoma Wright
Keoma Wright

Wright said that while many people preferred the freedom of uncapped products, there was a trend developing where users chose capped products for performance.

“Capped services will always be superior to uncapped products, and many clients are realising this,” said Wright.

 


 

Shane Chorley, executive head at Vox Telecom: users that want a premium service will use capped products

Shane Chorley
Shane Chorley

Chorley said that consumers like to have certainty in different ways, which creates markets for capped and uncapped products.

“Some consumers want to have a definite bill and don’t want to have any ability to increase or decrease that bill, and get a service through that, and that will appeal to the uncapped users,” he said.

“The users who want a premium service will tend to use capped services.”

Chorley said they have always anticipated that customers would move back to capped services for the simple fact that they can use their full line speed, and their data is merely a bolt-on cost to their line.

“I think we will still see a lot of uncapped, but we’re going to see a large growth in capped services.”

 


 

Axxess director Franco Barbalich: we will see more value in larger DSL capped products

Franco Barbalich
Franco Barbalich

Barbalich said they have seen more people moving to larger capped DSL packages over the last year.

He predicts that South Africans will see more value in larger DSL capped products, and an increase in the quality of service in uncapped DSL products.

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Where ADSL is going in South Africa: capped vs uncapped