From R599 to R1.37 per GB

Vodacom was the first mobile operator to launch 3G mobile broadband services in South Africa, introducing the technology in December 2004.

When the company launched 3G, it offered a 1GB data package with a portable modem for R599 per month.

Twenty years later, for around the same price, Vodacom offers 5G with 400GB of data and a Wi-Fi-enabled home router for R549 per month on a two-year contract.

That works out to R1.37 per GB with the device included — a 99.77% price drop in two decades.

When Vodacom launched 3G, there was no clear business case for the technology.

Telkom had recently launched ADSL at the end of 2002, charging R680 per month for a 512kbps ADSL service with 3GB of data, excluding phone line rental at R67.72 per month.

To understand why Vodacom launched 3G, one must go back to 1994, when the company launched its first cellular telephone services in South Africa.

Vodacom launched its first commercial cellular services on 1 June 1994. At the time, it only had coverage in cities, large towns and along major roads.

“The plan was to install 500 base stations across the country, covering the main highways in the process,” former Vodacom CEO Alan Knott-Craig said.

However, Vodacom had underestimated the demand for mobile voice services. When it launched, the cellphone industry exploded in South Africa.

“Within five months, Vodacom had increased its customer database by 540% and signed on 100,000 customers,” said Knott-Craig.

“The demand had been vastly underestimated. Vodacom started rolling out base stations at break-neck speed. At two base stations per day it could scarcely keep up, initially investing R250 million more than expected.”

Today, Vodacom’s network covers nearly South Africa’s entire population. It has 99.5% 2G, 98.4% 3G, and 98.7% 4G population coverage.

Having underestimated demand in 1994, when the time came for deploying new technology on its network ten years later, Vodacom wouldn’t make the same mistake twice.

Old Vodacom 3G PCMCIA laptop data card

In an “ask me anything” interview on the MyBroadband forum in 2018, Vodacom’s Jannie van Zyl explained why they launched 3G when they did.

“The technology was available to everyone at the time, so it had nothing to do with technical reasons,” Van Zyl said.

“Rather, people like Pieter Uys understood what the Internet would become one day and drove it without a ‘business case’.”

Pieter Uys was Knott-Craig’s right-hand man, and would become Vodacom CEO in 2008. He served in the role until March 2013.

Uys said the launch of 3G was one of the highlights of his career at Vodacom. He explained that it was brand new technology at the time, but he and Knott-Craig were convinced mobile data would be a winner.

Van Zyl recalled there was some talk of people eating their hats if Vodacom got it right.

“The network team got it right — comfortably. And repeated again with 4G,” he said.

Vodacom was the first operator to launch commercial LTE services in South Africa.

In 2012, Vodacom built a country-wide 4G network and launched within 16 weeks.

The journey to the low data prices enjoyed today includes several step-changes along the way.

Shortly after introducing 3G, Vodacom reduced its 1GB package price to R499 and launched a 2GB product for R998 per month.

In 2006, Vodacom launched the first 3G HSDPA network in South Africa — offering faster speeds than were available via Telkom DSL at the time.

The following year, it announced a 61% drop in data prices.

In 2008, it launched HSUPA, offering better upload speeds on its 3G data network.

By the end of 2012, the year Vodacom launched LTE, the company had introduced two new data deals — a 5GB for R389 product and a 10GB for R689 bundle.

This brought the price per GB to under R70.

Two years later, you could buy a Vodacom 2GB mobile data bundle for R99 — a per-GB price of R49.50.

Fast forward another ten years, and South Africa’s cellular data landscape has shifted significantly.

In 2024, subscribers can get uncapped or extremely high-cap 4G and 5G fixed wireless access services for a fraction of what they paid in 2014.

Mobile data prices have also come down, with Vodacom offering subscribers customised bundles and prices with its AI-powered Just4You service.

From the early days of 1994, when it was believed that the market for cellular services in South Africa was a handful of people, to the launch of 3G in 2004, mobile networks have come a long way.

Today, mobile data services are near ubiquitous, with users able to connect to the Internet from just about anywhere they would want to in South Africa.