MWeb wades into broadband price war - TechCentral

MWeb wades into broadband price war

Rudi Jansen

MWeb CEO Rudi Jansen

MWeb, a unit of media giant Naspers, has joined the broadband price war in SA, offering aggressively priced uncapped broadband.

What follows is a verbatim press release from MWeb. See here for TechCentral’s article.

South Africans are today a step closer to being able to use the internet like the rest of the world does as MWEB, South Africa’s leading ISP, today launches a full range of uncapped ADSL packages for consumers and businesses at an affordable, highly competitive price. With products priced from R219 per month and some 40% cheaper than other offerings, MWEB is the first major player in South Africa to offer uncapped ADSL on a significant scale, available 24 hours a day, with all the value-added products, technical back-up and a world-class network – at an affordable price.

Rudi Jansen, MWEB CEO, says the time has come for South Africans to experience unlimited internet access that is within their means. “Internet penetration in South Africa remains below par – in fact, South Africa has fallen behind a number of other African countries in recent times. The lack of well-priced, generously-provisioned bandwidth has been holding us all back, and as a result we are missing out on an immense economic opportunity.

“In his state of the nation address last month, President Jacob Zuma promised to increase broadband access, reduce tariffs and ensure a high standard of internet service, in line with international norms. MWEB’s latest move is supportive of the government’s objectives to increase internet take-up as part of its efforts to encourage greater economic growth and social upliftment. By lifting the usage cap and increasing competition, MWEB will greatly assist the industry change that is needed in this country.

ICT industry analyst, Arthur Goldstuck, agrees with this sentiment, saying cheap, unlimited broadband by MWEB marks a key shift in South African Internet history. “It has been proven that accessible technology builds the economy. This is the kind of catalyst we’ve all waited for; we hope it’s the gambit all other providers will have to match. If it delivers what it promises, the consumer and business user and ultimately the country will be the beneficiaries.”

Vast benefits
Citing the examples of France and South Korea and pointing to various global ICT programmes aimed at overcoming the 2009 economic slump, Jansen says the direct and indirect benefits including the multiplier effect of cheap, abundant bandwidth are nothing short of remarkable.

“Broadband lifted South Korea out of the devastation of the Asian market collapse in 1997,” he says. “In 1995, 1% of their population dialled up to the Internet. In 2009, more than 95% of households had broadband. The change is deep and irreversible – everybody has high-definition video on demand. Online gaming conventions are as big as soccer matches or rock concerts. South Koreans spend twice as much per capita online as US citizens.”

South Africa’s turn
Jansen says MWEB hopes its actions are a precursor to a meaningful industry response. Since South African telecoms policy was liberalised to permit ISPs to offer services on their own networks, MWEB, a first-tier ISP with its own international bandwidth provisioned through SAT3 and Seacom, is now able to compete with telcos by providing Internet access on its own network.

“In spite of the current stranglehold that Telkom currently has on the internet market in South Africa, we felt that action of this significance was necessary to get South Africa to join the rest of the world and enjoy the social and economic benefits that broadband internet has to offer,” said Jansen. “This offer will enable South Africans to access and download content on scale never seen before. We have a real chance to lift ourselves from broadband mediocrity in South Africa, or we risk falling into broadband oblivion,” he added.

MWEB has invested significantly in its network to produce a top quality, reliable network that has been engineered to world-class standards and which will accommodate the volume of traffic expected.  MWEB recently achieved Tier-1 ISP status with the migration of its customers to its own IPC network, thereby limiting its reliance on other Tier-1 providers for its bandwidth needs.  With its new IPC link, MWEB will have more control over its ADSL network.  Jansen said he is confident that the additional control will mean better performance and higher service levels.
“We will also be utilising bandwidth on both the SAT3 and SEACOM international cable systems in order to have full redundancy on our international bandwidth,” he said. “We signed up with SEACOM in March for a long-term agreement and we are purchasing significant bandwidth as SEACOM provides MWEB with a very attractive solution for international network capacity, at the best price currently available to the South African market.”

He added however, that for any ADSL service to be successful a close working relationship with Telkom is needed as they still control the last mile. MWEB will continue to work with Telkom to ensure MWEB subscribers receive the best possible network experience in the country.

Packages
MWEB is introducing six data-only ADSL packages for consumers and businesses. The consumer data-only products will cost R219, R299 and R539 per month for line speeds of 384Kbps, 512 Kbps and 4Mbps respectively. The MWEB Business data-only offerings will cost R499 per month for a 384Kbps line, R699 per month for a 512Kbps line, and R1 999 per month on a 4Mbps line. These services are available on any line rental package available from Telkom, even Telkom’s “Closer” subscription bundles.

In addition, MWEB will offer three consumer all-inclusive packages (ADSL line rental included) for R349, R599 and R899 per month for line speeds of 384Kbps, 512 Kbps and 4Mbps respectively. The all-inclusive offerings for businesses will cost R629 for the 384kbps option, R999 for the 512Kbps option and R2 259 for the 4Mbps package.

All business products are unshaped, and as in the rest of the world, no bandwidth caps will apply to any of these services.

Business-grade
The MWEB Business products are specifically designed to suit the needs of small and medium sized businesses, usually seen as 5 or more connected devices. Andre Joubert, GM of MWEB Business, explains that the MWEB Business packages are fully managed. “If something goes wrong, MWEB’s support engineers will remotely log on to fix a router or send an engineer on-site at no additional charge, and also liaise with Telkom, for their portion of the fault.”

Joubert says the Business packages have other advantages too.
–        They are unshaped.
–        The service is designed to cater for the throughput of business applications not usually associated with consumer products
–        MWEB includes use of a business-grade router worth R3 999 in the 12-month contract.
–        The product comes with fixed IP addresses, offering the ability to host servers and deploy a VPN connection.
–        MWEB runs a dedicated call centre that offers business-specific technical skills.
–        The service is fully MWEB VoIP compatible.
–        The product comes with reports and proactive fault communication.

In addition, says Joubert, while MWEB Business packages are at a premium compared to consumer products, they’re still up to R1 800 less per month than comparative business products on offer. The throughput will be better than is currently available in the market.

”Now businesses can run more effectively without having to worry about their internet costs. This is set to drive growth in the SME sector in particular.”

Consolidation
MWEB will use the occasion to consolidate its numerous ADSL offerings into a simpler portfolio. On the consumer side, a number of capped packages prevail, but these will enjoy additional cost-savings. For example:
1GB R89 no frills now costs R69
2GB Data Cap Only will be migrated to 3GB at R145
1GB All-inclusive 384Kbps will be migrated to 2GB at R199

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