For those of you who don’t know, last week Telkom dropped a bomb on all the other competing ISPs by dropping their prices for their Do Broadband accounts, both separately and in bundled format. While I was initially going to report on it that same day, I decided to wait and see how MWEB would react. Both companies together attract a substantial amount of customers on the ADSL market and MWEB has traditionally always been in the front with price cuts. However, many uncapped subscribers with other ISPs turned their attention to Telkom when the government-owned service provider announced soft caps on all capped accounts – they knew, probably, that changes to Telkom’s uncapped offerings were on the cards. Lets see how things stack up…
Going back to the morning of the 24th, Telkom’s announcements caused quite a stir because they almost became the cheapest ISP in the market (currently Afrihost holds that prize). The biggest drop was seen in the 10Mb/s offerings, where both the data-only and bundle pricing took a knock, chopping off over R700 for the new bundled product. The rest of the lineup saw some impressive drops, but nothing as good as what 10Mb/s users can now enjoy. A quick look at the lineup:
The important thing to note is that these price drops follow a previous announcement by Telkom that from the 1st February, all uncapped speed restrictions during the daytime would be lifted, with only prioritisation and some shaping going on to make sure things stay in line (Telkom does throttle accounts, but only during times when the network is congested, or international connectivity is hampered). This pretty much puts the SAIX network on par with other ISPs in both pricing and speed restrictions, with the exception of those ISPs who still use the rolling window method (still sticking to your guns, Web Africa?). As a Do Broadband user myself, I’ve never experienced any hiccup since my line went up last year in March and international connectivity, especially for some online gaming, works like I expect it to. Telkom also buys capacity from all the major international undersea cables that land in SA, so there’s a lot of redundancy in place, just like MWEB.
In fact, upon hearing the announcement many MWEB subscribers put in notice, or threatened to, to move to Telkom for their data needs. The digital landscape in SA is pretty free and that means ISPs have to work that much harder to part you with your money on a regular basis. If you keep your line rental with Telkom, you’re free to move as you please between ISPs, allowing you to pick and choose from their offerings and even merely follow the lowest prices, of that’s what floats your boat. Not having much brand loyalty also makes this especially difficult for ISPs who attempt to differentiate themselves in terms of QOS, acceptable use policies, throttling and the backbones in use. At any moment, something like Telkom’s offering may surface and you see a great deal of your customers move in the blink of an eye. That’s why its important to make sure that your comeback to the price drops of your competitors is valid and attractive.
Unfortunately, no-one seems to have told MWEB that last part because while the prices for their new products are attractive, but they’re also for a throttled product. As MWEB’s CEO, Derek Hershaw, explains, “Whilst MWEB has always promoted an unthrottled, uncapped connection as being the best way to experience the Internet, we have recognised that there is some demand for cheaper, throttled uncapped accounts and have therefore extended our product range to cater for this. We will maintain a fair service for all our subscribers by implementing throttling on high usage users where applicable.”
With the word “throttled” appended to an uncapped product, it suddenly doesn’t seem so exciting, does it? Telkom’s Do Broadband subscribers were also subject to throttling policies during the daytime, but this will be soon done away with. Telkom’s new Fair Use Policy document does mention that there will be some throttling applied in case the network is under strain, however it doesn’t say that they will explicitly limit users outside of a congested network situation. In this regards, MWEB has dropped the ball because they’re not transparent enough on how the throttling will work or if it even applies to all users using the new throttled accounts.
Throttled speeds on MWEB’s new accounts are planned as follows: 2Mbps drops to 192Kbps and 4Mbps drops to an astoundingly low 256Kbps after some high usage which has yet to be determined. Many of MWEB’s existing customers currently enjoy an uncapped account where no-one complains about high usage and this might be taken as a slap in the face by some looking to save some money. Only the 1Mb/s product, labelled as a “Premium account”, will run at 1Mb/s day in and day out, with no throttling policies applied.
As time goes by, more ISPs will answer to Telkom’s price drops and we may even see lower prices than we thought possible. Afrihost is currently sitting pretty because it already has the lowest bundle prices available for most speeds but that involves having Afrihost managing your line for you – something that many internet users don’t want, despite the cost savings involved. Watch out in the news this week for more price drops, February is going to be an interesting month.