This may sound like a rant, but I don’t care. In some of the best news I’ve heard of late, cellular provider MTN have announced amazing new deals on their HSDPA data bundles starting off with a very affordable, entry-level prepaid option. But what really appeals to me, and I’m sure to countless others, is their new main offering whereby you receive a free Fastlink USB modem and 2GB of data transfer for ZAR 479 for the full 24 months.
That works out to around 23 cents per megabyte or ZAR 240 / GB which, surprise surprise, is cheaper than a comparable fixed-line ADSL package with the state monopoly Telkom. The benefits include national mobile coverage, a simpler, reliable service, fast connectivity, no waiting lists and a better than average bandwidth cap. There’s also the ideological and principled argument against a smug and unapologetic behemoth, but I’ll leave that one alone for the moment.
The greater question at present is what does this mean for the growth of Internet usage in South Africa and competition in the marketplace? Well, I wouldn’t go as far as to say that this news is the answer to all our prayers and will result in Internet users’ doubling over night — at least not directly. The truth is that there are other factors besides the high cost and barriers to entry in getting Internet access in this country, namely, access to suitable ICTs and techno-literacy. While the new MTN offerings might be groundbreaking and good news to many South Africans, the sad reality is that they’re still too expensive and a low priority to the vast majority of our population. But let us not forget though, that these new prices will also apply to existing voice contracts, which should result in a higher uptake of GPRS and 3G usage via mobile phones, by far the most ubiquitous Internet-enabled devices in this country.
Another likely positive spin-off of the MTN announcement is the price war that is sure to be looming between Telkom and the remaining two cellular providers (one of which Telkom has significant stakes in) as they are forced to sharpen their blades and drop prices to meet or beat the MTN bundles. This is obviously a good thing for South African consumers as well as the country leading up to 2010. Respected researcher, Arthur Goldstuck, has predicted that broadband data subscribers will roughly double by 2008 to 533 000 (up from 277 000 in 2006) and this news seems to confirm this calculation and possibly give impetus to crush it.
From an online industry perspective, I think we are all likely to see benefits in true cause and effect style and it’s a real window of opportunity for those companies with limited or non-existent online strategies to update them pronto.
I for one will be standing in line to sign-up for a new 2GB contract and am proud of the fact that I can go to sleep at peace with the knowledge that I can retain my un-relationship with Telkom and get my popcorn ready as they dig their own grave in the Internet space race.
UPDATE: As predicted, Vodacom have bounced back by announcing drastic price-cuts on their mobile boradband packages, whilst Telkom are still dragging their feet…
1 Vincent Maher Feb 20th, 2007 at 11:02 am(10:41:23 AM) Vincent: dude, i have a question
(10:41:54 AM) Colin Daniels: sure
(10:42:09 AM) Vincent: how did you conclude that the MTN deal is cheaper than ADSL
(10:42:27 AM) Vincent: because the way i figure it, it still costs more
(10:42:57 AM) Vincent: were you looking at packages in the same speed category as well as the transfer?
(10:43:05 AM) Vincent: or just the bandwidth
(10:43:29 AM) Colin Daniels: heh good question
(10:43:35 AM) Colin Daniels: i was looking at total cost
(10:43:48 AM) Vincent: well thats whats interesting
(10:44:00 AM) Colin Daniels: ie. cost of installing the line, monthly line rental, and ISP charge
(10:44:01 AM) Vincent: because if you get 4Mb adsl, which ius about what hsdpa is
(10:44:13 AM) Vincent: then its a little cheaper on mtn
(10:44:14 AM) Vincent: but
(10:44:38 AM) Vincent: if you get 396K/s adsl then you get 3Gb for about R500
(10:44:51 AM) Vincent: with the modem subsidised
(10:45:21 AM) Vincent: where are you going to get yours from?
(10:45:27 AM) Colin Daniels: but excl ISP right?
(10:45:51 AM) Vincent: line rental plus isp is about 600
(10:46:08 AM) Colin Daniels: with the 396k option?
(10:46:37 AM) Vincent: but then if you get telkom closer you pay R750, get 360K ADSL and tons of free calls etc on your landline
(10:46:54 AM) Vincent: like 1000 free minutes
(10:47:02 AM) Colin Daniels: right but why do I need that if I get the same on my cellphone
(10:47:17 AM) Colin Daniels: who do i need to phone for that amount of time?
(10:47:23 AM) Colin Daniels: fuck that
(10:47:55 AM) Vincent: i’m saying, if you were to have a landline and adsl, that would be a good deal
(10:49:07 AM) Colin Daniels: plus if u take the convenience aspects i.e its mobile and its reliable unlike telkom its a MUCH better option
(10:49:42 AM) Colin Daniels: thats added value in my opinion…
(10:49:45 AM) Colin Daniels: no?
(10:50:00 AM) Vincent: yeah for sure
(10:50:17 AM) Colin Daniels: the family that lauren work for are canceling their adsl…
(10:50:46 AM) Colin Daniels: they reckon it hasnt worked properly for the last month and they’ve tried getting hold of someone with no success
(10:51:03 AM) Colin Daniels: so they’re also switching to hsdpa
(10:51:11 AM) Vincent: yeah i heard lots of stories like that too
(10:51:26 AM) Colin Daniels: any way u look at I reckon its the best option
(10:51:28 AM) Vincent: though one dude i spoke to reckons he has iburst and adsl and on average adsl up is more reliable
(10:51:32 AM) Vincent: yeah agreed
(10:51:40 AM) Vincent: check this
(10:51:44 AM) Colin Daniels: but iBurst is different
(10:51:56 AM) Vincent: the closer plan gives you unlimited free calls in callmore time to other telkom lines
(10:52:08 AM) Vincent: so it must be awesome for grannies
(10:52:15 AM) Vincent: or people who call landlines
(10:52:28 AM) Colin Daniels: yeah but wat do granny’s need broadband for?
(10:52:38 AM) Colin Daniels: does it come standard on those plans?
(10:52:38 AM) Colin Daniels: \
(10:52:43 AM) Vincent: i know but i’m just talking about the phone part of the deal
(10:52:49 AM) Vincent: there are 5 closer plans
(10:52:54 AM) Vincent: see dan wants a landline
(10:53:05 AM) Vincent: because of our shit reception in our house
(10:53:12 AM) Colin Daniels: oic
(10:53:17 AM) Vincent: so am thinking of gettin g the closer without the adsl
(10:53:33 AM) Vincent: so she can jabber to friends in CT for free every night
(10:53:34 AM) Colin Daniels: yeah and she talks alot on the phone right
(10:53:39 AM) Vincent: yeah
(10:53:45 AM) Vincent: well not that much anymore
(10:53:57 AM) Vincent: but she used to
(10:53:57 AM) Colin Daniels: when nugget comes…
(10:54:00 AM) Vincent: yeah
(10:54:08 AM) Colin Daniels: she’ll be talking shitloads
(10:54:16 AM) Vincent: and i suppsoe i’d get adsl if i wasn’t going to move next year anyway
(10:54:53 AM) Vincent: but on this mtn deal – am i right that if you buy the r475 deal with the model included then you get 2Gb pm for the 24 months
(10:55:03 AM) Colin Daniels: yes!
(10:55:08 AM) Vincent: but if you buy it without the modem then its onluy the first 3 months
(10:55:13 AM) Colin Daniels: not just 3 months as we discussed
(10:55:18 AM) Vincent: right
(10:55:29 AM) Colin Daniels: so its killer dude
(10:55:35 AM) Colin Daniels: 2 Gb/month is great
(10:55:40 AM) Vincent: and then the price per Mb is R1.60 after that
(10:55:44 AM) Vincent: or something like that
(10:56:07 AM) Colin Daniels: no I think its like 23 cents
(10:56:21 AM) Vincent: isn;t that the in-package price?
(10:56:35 AM) Vincent: i actually have the brochure with me
(10:56:38 AM) Vincent: let me check
(10:56:43 AM) Colin Daniels: yes but it usually carries over
(10:57:31 AM) Vincent: okay R1.20 out of bundle for that one
(10:57:40 AM) Colin Daniels: really?
(10:57:44 AM) Vincent: and the t&c say it does not carry over
(10:57:46 AM) Colin Daniels: well thats ok
(10:57:52 AM) Vincent: yeah its great
(10:58:01 AM) Colin Daniels: because dont think i’ll use more than that
(10:58:05 AM) Vincent: http://www.mtn.co.za/?pid=309378
(10:58:07 AM) Vincent: me either
(10:58:14 AM) Colin Daniels: and by the time I do the price would probably have dropped further
(10:58:17 AM) Vincent: matt uses about 750 Mb a month
(10:58:24 AM) Colin Daniels: really?
(10:58:34 AM) Vincent: yeah
(10:58:45 AM) Vincent: he checks email, surfs a bit
(10:58:49 AM) Colin Daniels: and that means we cld download about 10 sets a month or so excl our normal usuage
(10:58:58 AM) Vincent: yeah
(10:59:00 AM) Colin Daniels: dude I think its great
(10:59:12 AM) Vincent: but i need a quote
(10:59:21 AM) Colin Daniels: so do u agree with my synopsis as posted in my blog then or not?
(10:59:25 AM) Vincent: why don;t they have deal listings on the mtn site
(10:59:35 AM) Colin Daniels: meaning?
(10:59:42 AM) Vincent: dealer
(10:59:51 AM) Vincent: i do agree with what you said
(11:00:10 AM) Vincent: just think that it may not necessarily be cheaper depending on other things
(11:00:17 AM) Vincent: i was going to comment
(11:00:23 AM) Colin Daniels: so comment
(11:00:36 AM) Colin Daniels: my argument was broadband/internet specific
(11:00:45 AM) Vincent: i should just post a transcript of this convo
(11:00:51 AM) Colin Daniels: not taking into account calls or anything
(11:00:55 AM) Vincent: yeah
(11:01:03 AM) Colin Daniels: because most people arent interested in that
(11:01:18 AM) Colin Daniels: yeah do that
(11:01:38 AM) Colin Daniels: i think these deals are available at any mtn shop
2 Ian Feb 21st, 2007 at 5:02 pmComparing broadband rates is like comparing bank fees – full of “yes but’s”. The cap, the speed, the subsidised modem, the coverage… It’s never quite apples to apples. But the drop in price is great news!
I’ve vowed never to spend a cent with Telkom again, and use Iburst, which works pretty well. Hopefully everyone decides to follow suit and drop their prices! Sadly the cellphone reception here sucks. ADSL really would be the most convenient, but with Telkom in charge….
3 Colin Daniels Feb 21st, 2007 at 5:42 pmIan – Yes I agree…
It is quite difficult to compare all the options and ultimately it becomes a personal and sometimes practical preference. I was scanning digg.com the other day and had a good chuckle over the anger that was caused when information was leaked regarding Comcast’s 200Gb cap!!!
Here’s a possible solution for you though. Maybe if they knocked down that unsightly mountain you’d get great cell reception and could go the MTN route?
4 Blake Feb 27th, 2007 at 4:57 pmMy gripe is with the contract side of things. With MTN, in order to get 2Gb’s you need to sign up for two years – that’s bullshit – with deregulation, WIMAX type initiatives and downward pressure on broadband prices I don’t think this deal will look very attractive in 12 – 18 months time.
Also if you don’t use your 2GB’s it’s not rolled over to the next month – so what is your per Meg cost if you only use a few Meg that month? Obviously much higher than 20c. You’re paying for the 2GB’s so why not roll it over, MTN? I think it’s kinda like stealing.
My ISP (not TELKOM!) offers me 1Gb at R70 to use as and when I like (over several months if necessary) via ADSL, no strings attached. Sure, ADSL line costs are not included but that is not my ISP’s fault.
5 Colin Daniels Feb 27th, 2007 at 5:41 pmHi Blake – I think that you made some valid points, but I don’t entirely agree with you on all of them. For starters, Telkom have their own way of ‘locking you down’ by charging for the installation of a digital line and even then most ISPs lock you into a 24 month contract which usually includes a modem, not unlike the MTN deal.
Plus your argument is incorrect in the first place since MTN now offer pre-paid broadband at the same price per meg as their contract packages and I’m sure the other cellular providers will follow suit. Therefore, you only need to pay for what you use each month (i.e not forced to use 2GB) and of course you can ‘cancel’ anytime since you are not locked into any contract…
Personally, I know that I’ll get through 2GB/month on my datacard. Bandwidth scales like a car engine, the bigger the engine/cap, the more you use it!
6 Blake Feb 27th, 2007 at 11:53 pmSure, but ad hoc out-of-bundle use is 2 bucks a meg!
BTW, surely it’s “MTN Opens Up a Can of (kick or whup) Ass on Telkom ?;)
7 Colin Daniels Feb 28th, 2007 at 4:49 pmBlake – the out-of-bundle rate is R1.20/meg (check here) and is set to drop even more in the upcoming months.
Oh, and the title was intentional, I promise you…
8 art2 Mar 16th, 2007 at 2:13 pmA belated response to mention that Blake is correct – the ad hoc out-of-bundle rate is R2/meg. The rate you quote refers to out-of-bundle rates for bundle users. i.e., once you’ve used up your pre-paid bunlde or contracted amount, the cost of additional usage is R1.20/mg.
Arthur