Cheapest entry-level broadband products in SA: report

Research ICT Africa’s (RIA) latest report reveals that mobile broadband products are cheaper than fixed broadband products in South Africa for low monthly usage.

The report, “Understanding What is Happening in ICT in South Africa – a supply-and-demand-side analysis of the ICT sector” was authored by Alison Gillwald, Mpho Moyo, and Christoph Stork.

According to the report, South Africa’s ICT sector experienced dynamic growth, but this growth has not met the national objective of affordable access to the full range of communication services.

“Access to mobile services continues to grow, however, broadband access (particularly access to fixed broadband) remains very low in comparison to other lower-middle-income countries,” said Research ICT Africa.

The report added that the prices of all communication services remain high by both African and global standards.

Entry level broadband prices in South Africa

The RIA report highlighted hat fixed-line packages (ADSL) are (surprisingly) far more expensive than comparable mobile packages.

“Also boosting mobile data’s appeal compared to fixed in South Africa, particularly for low data use and uneven consumption, are mobile data’s lower setup costs and its more convenient pre-paid charging options,” the report states.

“For these reasons, it is unsurprising that many South African home users opt to use a 3G dongle modem or mobile handset to access the internet instead of setting up an ADSL connection.”

In the assessment of broadband pricing below, prices are compared for categories of 1GB and 5GB.

The monthly cost is established by dividing the total cost of use for a 24-month period, including installation costs, dongle purchases, line rental and out-of-bundle MB costs.

1GB broadband prices (total cost)

5GB broadband prices (total cost)

ADSL offers value to high end users

The report pointed out that ADSL is the only broadband product that offers uncapped access – the only remaining advantage of fixed broadband.

“Together with some reliability advantages raised in the quality of service discussion below, this is really Telkom’s only competitive advantage,” the report states.

According to the report, it is strategically important for Telkom not to focus on mobile broadband at the expense of its fixed broadband business.

“Telkom would need to invest in faster technologies such as VDSL2 or fibre-to-the-home if it wants to remain significant with wired broadband offerings.”

The full report is available on the Research ICT Africa website

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