Business Maverick

Business Maverick

South Africa dies and goes to bandwidth heaven

South Africa dies and goes to bandwidth heaven

It's been a long time coming, but finally the gloves are off and the prices plummeting as local internet service providers go to war. On Wednesday iBurst announced a trial in which it won't charge consumers on its wireless service anything for internet use between midnight and 8am. Quick, repeat after us: "Online Backup”!

Think of it as the last straw, the one that finally broke through our cynicism to make us excited about what is going on in the market.

No, it’s not an April Fools joke. From Thursday, 1 April, until at least the end of June, customers on iBurst wireless (the main consumer offering from that company) will get zero-rated bandwidth between the hours of midnight and 8am. That means any data transfer in that period will be free, not counting towards the cap of contract customers with monthly data limitations or not being charged for those who pay by the megabyte.

iBurst says it really wants to make that a permanent part of its service, but it doesn’t know what the takeup will be and whether its network will be able to handle the many creative uses customers will find for that free period. So it is first doing the trial to see how it goes.

As a means of setting the cat among the pigeons that’s about as creative a move as we’ve ever seen in the local market. iBurst is certain to attract a number of new signups. At first they will be the heavy-duty users who will exploit the free window ruthlessly and pay the minimum for usage during the day, but among them will also be more ordinary users. The kind who use most of their bandwidth during the day, and occasionally have large transfers that can wait until after midnight.

Free bandwidth, at even half the the speeds iBurst normally achieves on its network, opens up a lot of possibilities. Besides large video file downloads (legal or not) there are services like automatic online backup, which is really cheap and convenient if you live in the USA or somewhere in Europe with decent bandwidth prices, but can financially cripple an unwary South African who inadvertently leaves a big PDF on the desktop.

If you aren’t into online backup, Neotel may be looking a lot more attractive soon. The alternative telephone operator plans to launch a fully prepaid data service, no contracts required. The company does not appear to be in a position to deeply subsidise the modems required, so you’ll have to shell out a couple of thousand bucks for one of those, but if Neotel retains its current out-of-bundle bandwidth charge of 8 cents per megabyte, well, a couple of grand upfront isn’t that bad. By way of comparison, 8 cents per megabyte is about ten times better than the mobile data rate you can expect from MTN or Vodacom. To be fair though, the mobile giants have nearly universal coverage, while Neotel has a handful of towers up in metropolitan areas.

If you are lucky enough to have a piece of Telkom copper running to the spot from which you wish to access the internet, 8 cents per megabyte may not look that cheap. The price-aggressive internet service provider Afrihost will sell you a one-gigabyte-a-month contract package at R30, which comes in at less than half the Neotel price. Or MWeb will sell you a connection that is entirely uncapped (if a little pedestrian on the speed side) for R220 a month.

The fine print on the ADSL pricing is that you still have to pay Telkom for the right to use that piece of copper. On the other hand, Telkom is expected to upgrade its fastest ADSL offering to a maximum of better than 8 megabits per second, which ain’t half bad.

Keep in mind that these are only the opening salvos. Local internet service providers spent more than a decade doing little more than reselling Telkom products. Some, especially the smaller players, are only now starting to wake up to the possibilities that partial liberalisation of the telecoms sector has opened up. We can’t wait to see what they come up with next.

By Phillip de Wet

Photo: Reuters


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