Finally, competition in the telecoms space
Consumers have felt ripped off for years, and understandably so. Prices for telecommunication services (both voice and data) have been higher than in other parts of the world. Not only are we 9000 kilometers away from Europe, we’ve historically only had access to the “world” via a single undersea cable operated by a former monopoly (Telkom’s SAT-3 cable).
There have been promises of competition for years and some false starts. The entry of Neotel offered much hope. But with (unnecessarily) complicated products and pricing, it hasn’t (yet) gained traction with consumers. Since its launch in 2006, it’s managed to win somewhere between 30000 and 40000 consumer users.
Neotel’s new consumer offerings hope to change that. Gone are the multitude of products, and in their place, some straight-forward options. It’s standardised its pricing across both prepaid and post-paid services, with free Neotel to Neotel calls from 6pm to 7am (and all day on weekends/public holidays).
While not strictly fixed-line (i.e. it doesn’t rely on copper to connect users), consumers still tend to compare Neotel’s products to your standard Telkom (fixed) phone line service.
For consumers needing to check e-mail (with the added benefit of having a phone line in case you need to call), its new NeoConnect Prime 99 is an attractive, cost-effective option. For R99 per month, you get 500MB of data and 500 SMSes per month bundled. Voice calls are extra, but you’ll hardly be spending hundreds of rands – landline calls are 57c per minute (33c off-peak) and mobile calls R1.37 per minute (R1.09 off-peak).
Neotel’s products targeted to voice users are even better value. Its prepaid services start at a flat R399 for the handset. Recharge cards (in R20, R50, R100, R200 denominations) will work out to be a bargain, given those per minute rates and there’s no monthly service fee.
And there’s the added benefit of Neotel using wireless technology, so its services are “plug and play”.
Telkom’s new “Simple” product targeted at new subscribers is a bargain compared to its existing phone and ADSL pricing. The product teams at Telkom have figured out that customers want a single bill for converged services.
For R369 per month, Telkom Simple offers new customers a landline (including rental) with free calls over evenings and weekends, a 384kbps (entry-level) ADSL subscription, 1GB of blended data (plus 10GB local only bandwidth) as well as a free ADSL modem if you sign a 24-month contract.
Think about how this price compares to a separate monthly line rental and ADSL access fee. Those two together will cost you R285.30 (R133.30 + R152). For a similar product, “do Closer 1”, you’ll pay R532 per month (same ADSL and data, together with line rental and 1300 inclusive minutes). That means Telkom Simple is nearly R200 cheaper and the only thing you’re not getting are a staggering number of bundled minutes!
The cynics will question what you’re able to do with 1GB of data per month. But on Telkom Simple (and on all the operator’s other products) you’re able to purchase “top-up” data if you do run out. Data is available at R69 per GB (unshaped), R49 per GB (shaped) or R15 (local only). Its pricing is, however, a little steeper than other ISPs. So what you could end up doing is topping up with another service provider and then using that data when your Telkom allowance runs out.
The word “bargain” is being used simply because this offer is serious value for money – so much so that I’m considering having it installed at home!
Now bring on Telkom’s mobile operator 8ta and let’s have some more competition in that space. Cell C’s moves have been a good start, and competition between Vodacom and MTN has increased in the past 18 months…
Telecoms competition << Give your views
*Hilton Tarrant contributes to “Broadband”, a column on Moneyweb covering the ICT sector in South Africa. If he ever gets round to visiting a Telkom Direct store, he’ll have Telkom Simple installed at home!
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