Five broadband internet providers are competing for a share of the South African market, but the benefits of the price war are cold comfort for consumers who still face an uphill battle in deciphering the different broadband options on offer. Even when you find the option that suits you best, you might just be buying a lemon.
The Mail & Guardian Online decided to crack the broadband puzzle and report on where to get the best value for money.
A broadband connection referred to as ADSL provides high-speed internet access over a standard phone line; wireless broadband — 3G or HSDPA — claims to do the same, but without the wires.
In weighing up the options, you’ll want to know what speed your internet connection will be and how many megabytes per rand you’ll be getting. ”But more importantly,” says South African journalist, media analyst and ICT commentator Arthur Goldstuck, ”is the quality and consistency of throughput you’ll be getting.”
Throughput is the amount of digital data per time unit that is delivered to your network, and this is especially poor when using wireless broadband technology.
Says Goldstuck: ”I use both major 3G services throughout the country, and have rarely found them to even remotely approach advertised speeds, let alone provide consistent speed. The result is a consistently negative online experience, particularly for applications that require a consistent stream of activity, such as video conferencing and viewing video news clips online.”
So, demanding web surfers may find that 3G technology is still a crippled service that bears little relation to what is advertised. ”None of the 3G services can compare to ADSL for efficiency, while my 512KB-per-second DSL service is significantly faster and more reliable than the 3G services,” says Goldstuck.
Packages aplenty
Apart from deciding between ADSL and 3G, consumers also face myriad package options. Some are loaded with vague descriptions, such as one from iBurst claiming that ”iGO Lite and iGO subscribers are required to top up prior to cap being reached to continue using iBurst” — the kind of language that is bound to confuse the layperson.
Telkom claims to deliver fast DSL, but it doesn’t mention its poor service delivery and extremely long installation times, while Sentech trumpets its new wireless products and prices, but says nothing about its limited coverage area.
Sure, the details are all there in the fine print, but soon shopping fatigue sets in and you may be tempted to take the option with the simplest terms and conditions — or because of that friendly person who answered the phone at iBurst and persuaded you to seal the deal.
Over the past month, Vodacom, MTN, Sentech and iBurst have all improved their broadband packages or lowered their prices. MTN took the lead last month and became the most affordable provider in the wireless broadband market when it reduced its prices by 20%.
However, it couldn’t hold on to that position. Currently, Vodacom has taken over with price cuts of up to 61% from April 1, making its wireless products the cheapest and fastest in the market.
”While consumers are always winners when prices drop, broadband prices are still too high for enough consumers to be winners,” says Goldstuck. ”The cost of broadband is still higher than where dial-up has been sitting for years, and that cost of dial-up represents the barrier to further adoption of the internet in South Africa.”
However, due to these reduced tariffs, wireless connections are about to outnumber fixed ADSL connections in the country, making South Africa a global exception.
Pricing
The broadband market can be roughly divided into three pricing bands, depending on the speed of the connection and the amount of data for your rand.
The first pricing band — for smaller data bundles with low usage allowances — is where much of the competition now takes place. These packages will be for users who only use the internet rarely, and who need between 150 and 500 megabytes (MB) per month.
By way of comparison, for one gigabyte (1GB, or 1Â 000MB) you can browse more than 30Â 000 web pages, download 2Â 000 MP3s or send 150Â 000 emails.
However, it is in the second pricing category where the most aggressive price war is being fought. This contains data bundles with usage allowances between 1GB and 3GB.
The last category consists of data bundles with high usage allowances, of 4GB up to 20GB. Unsurprisingly, tariffs are quite stable here.
To make sense of all the different monthly accounts and package deals, MyADSL has published a fair overview of which of the five providers offers the best value for money.
Low-usage category
In the low-usage domain, the market’s best entry-level pricing comes from Sentech with 150MB for R99 a month. This is advised for users who hardly ever surf the web and who fall within Sentech’s coverage area. Although Sentech is government subsidised, its area coverage is limited compared with that of its counterparts.
Vodacom provides the best offer here, with 500MB for R189 — especially when taking speed into account.
Click here to view a table (PDF) providing a rundown of services available in this market segment. It lists the offerings from best to worst.
Average-use category
Within the second domain the competition is so fierce that other factors may have to be taken into account. For instance, the price difference between second-time-in-a-row winner Vodacom and MTN on a 2GB data package is only R10, thus you have to look at the quality of customer support or additional (free) soft- or hardware.
When customers need 3GB of data, iBurst and Telkom DSL384 are the most competitive, charging R599 and R594 respectively for their packages. However, iBurst does outweigh Telkom in speed here and it offers to carry over unused capacity. As Goldstuck adds: ”iBurst has the fairest attitude in the market being the only broadband provider that allows carry over of unused capacity.”
Click here to view a table (PDF) providing a rundown of services available in this market segment. It lists the offerings from best to worst.
High-usage category
Here, the competition is calm because most consumers don’t need large quantities of data and the market is mainly focused on businesses.
For customers using large amounts of data, Sentech is the best alternative here with R999 for 10GB. It has to be noted again that customers have to be located in Sentech’s coverage area, which is still very limited.
Telkom DSL1024 provides by far the fastest speed at 4MB per second for a 10GB bundle, but is quite expensive compared with the competition.
Vodacom has already taken some of the market share in the high-usage domain, and all eyes are now on it to increase its data size or lower its prices.
Click here to view a table (PDF) providing a rundown of services available in this market segment. It lists the offerings from best to worst.
However, Goldstuck doesn’t expect any further reduction of costs. He advises the unconnected to bear in mind that the cost of 3G remains absurdly high at R2 per megabyte.
”Where it all comes down to at the end of the day is the overall quality of throughput,” he says, ”and this is where ADSL comes into its own.”