Vodacom gets in there first
MTN Group CEO Phuthuma Nhleko caused a stir when he announced at a presentation to shareholders and analysts last month that MTN SA had already launched its high-speed downlink packet access (HSDPA) service. HSDPA is sometimes referred to as enhanced 3G or super 3G and is capable of delivering download speeds of up to 1,8 Mbit/s. That’s five times faster than conventional 3G networks. Later, upgrades to the technology will result in speeds increasing several-fold again.
But MTN’s announcement that it had switched on its HSDPA network rings somewhat hollow as the data cards consumers need to access the network at the new, higher speeds will not be available for several weeks yet. Vodacom’s cards, on the other hand, are already available in stores. MTN’s HSDPA network is live but, for the moment, its subscribers have no way of accessing it.
The claims by both operators that they are first to market underscores how seriously the two companies are taking this new technology. To be sure, HSDPA is super-fast. An hour-long TV show can be downloaded in less than 10 minutes and entire songs can be brought down in seconds. The technology is theoretically capable of speeds almost twice as fast as the fastest consumer broadband product offered by Telkom.
Vodacom thinks demand will be huge. Group chief operating officer Pieter Uys says he wants to replicate the group’s success in voice telephony, where it has signed up 17,6m customers.
Uys hopes that the launch of HSDPA will help make 3G more popular. He says HSDPA is a means to sell other services. Through its partner and shareholder, the UK’s Vodafone, Vodacom has access to more than 500 000 songs that subscribers can download for a fee.
Subscriber growth in SA is slowing and average revenue per user (Arpu) is declining. Uys sees HSDPA as a way of slowing this decline in Arpu.
But both Vodacom and MTN have their work cut out for them. They have failed to grow their 3G subscriber base to meaningful levels. There are only 26 600 Vodacom 3G card users, making up less than 0,2% of the company’s subscriber base.
Uys says this will change. He says Vodacom no longer views 3G as a niche service for high-end customers. Rather, it will become a standard offering for everyone. Uys wants to switch off the group’s GSM network and offer only 3G – voice and data – in about five years.
First, though, 3G handsets need to become ubiquitous. The price of handsets must come down and the price operators charge for data access must also fall, Uys says.
He says Vodacom will bring down the prices it charges consumers for bandwidth. Before it started its 3G service, it charged an inflated R40 000/GB. It now charges R499/GB (as part of a contract) but Uys says this is "still not low enough" for mass-market adoption.
Meanwhile, consumers won’t have to wait long for HSDPA handsets to hit the market. Samsung SA’s marketing manager for mobile devices, Justin Hume, says handsets are already on the way, with the first delivery expected in May.
Unlike the problems associated with first-generation 3G handsets, HSDPA handsets will be relatively affordable and battery life will be reasonable, Hume says.
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