Paul Jacobson

News just broke about MWEB’s new pricing for its ADSL offerings including a remarkable R219 for uncapped ADSL (for a 384 kbps ADSL line).

Businesses can expect to pay between R499 for 384 kbps DSL and R2 359 for up to 4 Mbps DSL. These prices are a little misleading and they vary depending on whether you are including ADSL line rental in your 12 month contract with MWEB (oh, yes, you need to sign a 12 month contract with MWEB).

The local Twittersphere has just gone crazy at the news with a number of people spreading the news as if it is the biggest ADSL news for the year to date. It is certainly fantastic news for MWEB subscribers who have been paying ridiculously high prices for their ADSL access so far. This pricing is not, however, the best pricing available to consumers or businesses. I don’t know how many businesses are still using 384 kbps lines unless their traffic is pretty much limited to email for a couple people so let’s assume more people will be using the faster connections. Once you are looking at pricing for the faster 4 Mbps lines, you can expect to spend around R2 000 for the pure data component with MWEB. Still not bad for an uncapped and unshaped ADSL connection, for sure. Well, until you consider Afrihost’s pricing …

You may be familiar with Afrihost’s R29/GB pricing offer which just seems to keep going. You may even be aware of the occasional double-up offer where you can buy 2GB of Afrihost data for R29. I just noticed that Afrihost is giving a lot of data away as part of its higher end packages (granted, the service is semi-shaped if that makes much difference to you):

I have a 50GB package with Afrihost and we tend to use around 60GB to 70GB on heavy months. 100GB is, practically, an uncapped package for us. I could probably find some way to use 100GB if I try hard (yes, I know it is easy to use that much data on illegal data transfers, I’m talking about the legal or semi-legal stuff) but it is quite a bit of data for R950. The price will probably revert to R1 450 for 50GB in June but that is still cheaper than MWEB’s equivalent, at least for me.

So, yes, MWEB’s pricing is great news for consumers, particularly its users who have been paying its absurdly high prices in the past but it isn’t exactly revolutionary for those of us who have been Afrihost customers (and other pioneers’ customers).

Welcome to the party MWEB, what kept you?

I received a heads up from G-Connect’s agency, Emerging Media, about a special offer for the holidays a couple weeks ago. You may know that G-Connect is one of the broadband providers I use although mostly while I am on 3G. I use Afrihost as my main provider because its ADSL is cheap and can accommodate multiple concurrent connections. That being said, I often think my G-Connect connection is faster than my Afrihost connection when I do use G-Connect ADSL. I don’t know if it is actually faster but it certainly feels that way. If you are interested in my thoughts about these two providers in particular, check out my post about them.

Anyway, the special offer is pretty appealing and probably an attempt to deal with the explosion of ADSL providers offering prices even lower than Afrihost’s R29/GB although with mixed results. Here is part of the press release I received:

Adding even more fuel to the debate around the price of broadband Internet connectivity in South Africa, WirelessG has launched a promotion on their G-Connect product that sees it slashing pricing on ADSL, Wi-Fi and 3G Internet access by as much as 59% between the beginning of December 2009 and the end of January 2010.

The preferential pricing is available as part of a promotion the company calls its ‘30-Day Broadband Pass’ and as its name suggests, differs from the company’s G-Connect prepaid Internet offering and offers users the opportunity to get substantial discounts of between 39% and 59% on all access mediums while having a cap of up to 9GB for only R200. The effective price on ADSL is as low as 2.2 cents per MB while 3G is 28 cents per MB. However, when using this convergence bundle users will be required to consume their entire data allocation within 30 days of its purchase.

“While the promotion won’t see any data capacity rolling over from one month to the next, as is the case with the existing G-Connect product , the big win is that the offering is unlimited in the sense that existing and new users can purchase as many of these ’30-day passes’ as desired. They will further have the freedom to access mobile and fixed line networks which will be a specific requirement in the festive season with users travelling to holiday destinations. With this kind of product, families can hammer the networks at prices almost half of their existing bandwidth costs”, explains Carel van der Merwe, CEO of WirelessG.

“We believe that the promotion will do wonders for opening the market’s eyes to what’s possible with substantially larger data capacity limits and more cost effective pricing,” he says.

“This exercise will also give us and the market a view of what’s to come in the near future,” he adds.

Van der Merwe says that the ‘30-Day Broadband Pass’ promotion can be done due to the ease of use of our service and is a result of a temporary set of price reductions. “It is not designed to mislead the market, but to offer something special to satisfy the need of the December to January holidaymaker,” he says.

This announcement follows last week’s G-Connect price drop where the normal G-Connect ADSL rate was lowered by 29% to as low as 3.5c per MB. Prepaid users will therefore also qualify for lowered rates regardless of whether they purchase a ‘30-Day Broadband Pass’ or not.

G-Connect could do a couple things to improve its service, generally speaking, including its hit-and-miss Connection Manager which can be pretty temperamental. If you are away from your usual ADSL connection over the holidays and your mobile provider is still ravaging you with high mobile data costs, take a look at its pricing and this special offer. It may be worth your while.

Fact: we have expensive Internet connectivity compared to most of the developed world. You can throw a stone at a story about connectivity in SA without grazing a mention of the costs here compared to, say, the UK or the USA. Thankfully we do have developments like the Seacom cable, the upgrade to SAT-3 and a bunch of cables coming down the west coast of Africa which will boost the available bandwidth almost exponentially. We may even see Telkom drop its prices and increase caps and transfer rates … just maybe!

In the meantime we have a couple options that are better priced than most and offer pretty decent service. I used to be a loyal Axxess DSL customer but when it failed to take steps to reduce its pricing after G-Connect dropped its pricing to between R45/GB and R49/GB for ADSL access and Afrihost launched its limited duration and special R29/GB offer, I decided to switch.

I’ve been using G-Connect on and off for a few months now since Emerging Media sent me a SIM card and G-Connect gave me some credit to try the service out. Setting up the account on my laptop was easy with some terrific support from the G-Connect helpdesk. I focussed on the 3G access at first and it worked really well. It wasn’t until I moved away from Axxess that I started using the ADSL connectivity too. While I’ve enjoyed using G-Connect, the sign-on mechanism is a pain in the butt at times. Sometimes it just won’t connect me to the network but the support guys are terrific and I’ve had them call me a couple times with suggestions and to follow up with the support query. There are a couple pros and cons when it comes to the G-Connect service:

• Pro’s
• Pretty fast transfer speeds;
• Unshaped bandwidth;
• A single account for your ADSL, wifi and 3G connectivity;
• No commitment and your balance carries over month to month; and
• Excellent support (the support team are persistent).
• Con’s
• No concurrent connections;
• Cumbersome sign-on mechanism

I heard a couple reports about terrible customer service at Afrihost but the limited duration and special offer was too cheap to ignore. I decided to sign up and try it out and so far I have been pretty happy with the service I have been getting. I initially signed up for a 20GB service at R580 (compared to R490 for 8GB at Axxess) and I am moving up to a 50GB service next month at a cost of R1 450 (compared to the R1 475 I paid Axxess for 25GB). I occasionally have connectivity issues that seem to resolve themselves after a few minutes. As with G-Connect there are a few pros and cons:

• Pro’s
• Pretty fast transfer speeds;
• Up to 5 concurrent connections;
• Minimal commitment, you can cancel at around a month, I think (this is pretty standard);
• Excellent price and if you buy during the special you lock that price in
• Con’s
• Shaped bandwidth;
• No bandwidth carry-over so use it or lose it;
• Reportedly dodgy customer service (although I haven’t had any problems)

At the moment I use both G-Connect and Afrihost. Afrihost is my primary DSL provider but I have credit with G-Connect for when I can’t use Afrihost for some reason or I am out and about and MTN 3G is half GPRS (happens fairly often lately). I also maintain a 1GB data bundle on Axxess as a kind of “in case of emergency break glass” option but I don’t see myself going back there in a hurry. Granted the Afrihost pricing is not sustainable but the R49/GB price point seems to be where ADSL should be priced these days and Axxess’ refusal to revisit its pricing or make any effort to communicate with its customers about its pricing puts me off (Axxess doesn’t seem to be on the social media map and that says a lot to me about the company’s desire to engage with customers).

Of course it is worth mentioning Internet Solutions itself for a number of reasons. For one thing it is the underlying provider that powers Afrihost (as well as Axxess). Another reason is that IS has its own consumer offering called Plugg. Plugg’s offering isn’t terribly appealing from a price perspective. At R79/GB (apparently the price has been or will be dropped to around R65/GB) it is just not an option despite it potentially being pretty zippy due to what I understand are low contention rates (excuse any terminology mangling – I am trying to remember what smarter people in the know have told me). Plugg’s pricing is partly due to its relationship with its customers which it can’t really undercut without causing some trouble (those providers should be cutting their prices but that is besides the point, it seems). Instead Plugg is going to look at ways to really improve the value it adds to connectivity by adding a couple other services and options down the line. The fact that Plugg is an IS product automatically makes it worth watching but until there is better pricing and/or a more compelling offering there are better choices.

While I am talking about IS products I also want to mention its Mobility product. This is a corporate product and analogous to the G-Connect service in that it encompasses wifi and 3G access outside the office. It is a lot more than just connctivity and includes a really comprehensive management system that grants network managers a fine grained level of control over who has what level of access to which network. It seems to be a pretty powerful option for corporates who want to give their people the ability to work remotely and at the same time control how they do that and even how they interface with the corporate network. I haven’t used much more than the 3G connectivity on my phone (like G-Connect you can provision your SIM to run on the IS network rather than your usual provider). I just couldn’t figure out how to get the 3G dongle working with my MacBook for some reason. This mention really doesn’t do the offering any justice. I just wanted to mention it here as a powerful corporate option that also comes with some competitive pricing.

Although pricing has hardly plummeted while bandwidth caps and transfer speeds have rocketed, we are seeing some very welcome relief when it comes to pricing and the flexibility to switch from provider to provider (well, assuming you weren’t nailed down by Telkom or some other larger provider). Even at R49/GB ADSL is becoming much more affordable and providers like G-Connect and Afrihost are putting some pressure on their competitors to do better. I would love to know the number of users other DSL providers lost when Afrihost announced its special offer. That must have been noticeable. I’m pretty happy with my current choices although what I’d like to see is improved upload speeds. That is the next big thing, I think.

I’m at the Seacom event at Nelson Mandela Square in Sandton and I thought I would do a quick post here using the bank of computers lined up for our use.  I captured the initial speeches using Qik and my N97 which you can watch below here.

There wasn’t any public wifi available but we did get a chance to use the computers connected to some location in the UK to test out the bandwidth. I was expecting something spectacular but the highest download rate I saw was around 7 or 8MB/sec down. I did see some pretty impressive upload speeds (around half the download speed) but that was about it.

A couple of Seacom’s partners were also there showing off their tech, taking advantage of the Seacom bandwidth. I walked around a little with my N97 to give you an idea what is available at the event:

On the whole it was more about Seacom’s promise but as Simon pointed out when we were chatting, there is still a long way to go before people at home can benefit from all this promise.

I did have a chance to chat to Neil Meintjes who is running Internet Solutions’ Plugg, its consumer facing connectivity solution. I gave Plugg a miss when I took a look at it a short time ago because its ADSL was priced at R79/GB. The price has apparently been dropped to about R65/GB which is still a little high compared to Axxess and G-Connect (around R59/GB and R45/GB to R49/GB respectively) and certainly a lot higher than Afrihost with its current special offer of R29/GB but Neil said he is working on a number of value adds which could make Plugg a lot more attractive as an overall product. I also asked him if he has been sued over the logo which looks a lot like Fring’s. He says he gets that a lot.

News of Afrihost’s special offer has spread like wildfire and for good reason. Afrihost is offering ADSL connectivity for a low R29 per GB which is probably the lowest price in South Africa at the moment.

I am currently an Axxess customer and I just called Axxess to find out if they have any price drops planned. The sales person I spoke to said I should keep an eye on their website over the next 2 months or so because they are “looking into” reducing their prices. I pointed out to her that Axxess is going to lose a bunch of customers because Afrihost’s special offer is only valid for a limited time period. She asked me if I am a customer and I said I am an Axxess customer but I use a fortune of data (35GB this month so far) and it is costing me a bomb. She basically just told me to keep an eye on the site.

Being the lawyer I am I just called Afrihost and asked for the fine print for their ADSL offering. They don’t seem to have any but I did find out the following:

• if you have exceeded your cap you will be directed to the Afrihost control panel to top up your bandwidth;
• if you ever want to cancel your account you will have to give Afrihost 1 month’s notice (I suspect other providers like Axxess have the same notice requirement so bear this in mind if you want to leave your current provider for Afrihost); and
• the special offer was supposed to end today but the call centre guys have been told to keep selling the cheaper packages for the time being.

There is no doubt the Afrihost offer will attract a number of new customers. I am seriously tempted by the 50GB package at R1 450. It is cheaper than my bandwidth at Axxess is costing me for a lot less and given my current usage, 50GB is practically uncapped for me. Another big plus is that Afrihost’s ADSL allows for 5 concurrent connections and if I understand that correctly, that means my family can also use my account for their DSL needs. That translates into an even lower cost all around.

The Afrihost guys seem to be pretty confident that they have shaken up the local ADSL industry and they probably have. It remains to be seen what the post-special offer price will be although I doubt very much it will be much more than around R49 per GB which is what G-Connect is charging for ADSL on the high end.

What is clear is that pricing ADSL at anything more than R59 per GB for simple ADSL is foolish and we should see other providers drop their pricing sooner rather than later. Either that or those providers will start to fall away as serious competitors.

That just leaves you with one question. Have you signed up with Afrihost yet? I’ll be exiting the Axxess offramp shortly after about 2 years as an Axxess customer.