Why you can be (a little) angry about SA’s broadband prices

Point Topic has released its residential broadband tariff benchmarks report for Q2 2014, which shows that South Africa’s average broadband speed and price are still far behind global standards.

According to the report, the average bandwidth provided by residential broadband services globally was 57Mbps.

In South Africa, fixed broadband speeds range between 2Mbps and 40Mbps. However, not many residential customers have access to speeds higher than 4Mbps.

Price and cost per megabit

The research found that in Q2 2014, the average monthly charge for residential broadband services around the world was $84.73 (R910 – 1 USD = 10.7349 ZAR).

In South Africa, the price of a DSL service ranged between R350 and around R3,000, depending on the line speed and the data account type.

A good measure of value is the average global cost per megabit. Globally, this figure is $1.48 (R16.00), far below the local cost which hovers around the R100 mark.

Cost per megabit
Cost per megabit

Entry level, median, and average broadband price

Point Topic highlighted that comparing tariffs between markets can be a contentious process.

Point Topic reviewed the three most commonly used comparison aggregations:

  • The entry level tariff – often ignores variations in bandwidth caps, time charging, actual bandwidth offered, and overall availability of a tariff in the market. Best used to indicate the conditions at the low end of the market and best comparator if you’re looking at the market penetration for broadband overall or a particular technology.
  • The median tariff – the value in the middle of the count of all values in the set. Can be skewed by unbalanced reporting or data gathering. Useful as a general indication of the market and for inter-market comparisons.
  • The average tariff – doesn’t represent an amount anyone actually pays, skewed by extremes in price. The most helpful single number for comparing whole markets when you want to understand the range of options for the consumer (in our view, let us know in the comments if you disagree).

Point Topic published a table of rankings as opposed to absolute monetary values to help understand more easily where a particular market lies in relation to others.

Broadband prices
Broadband prices

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Why you can be (a little) angry about SA’s broadband prices