Internet service provider MWeb has released a range of uncapped ADSL packages, with competitive prices, which could see the start of a price war and reshape the local Internet industry.
With consumer and business offerings starting from R219 a month, the offerings fall below other industry prices.
In November last year, ITWeb noted the cheapest uncapped ADSL offering was R399 per month, for a 384Kbps ADSL line, by Screamer. MWeb now offers the same line speed for R219 per month.
In total, there are 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, 512Kbps and 4Mbps, respectively, says the company.
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.
In addition, there are three consumer all-inclusive packages (ADSL line rental included) for R349, R599 and R899 per month for line speeds of 384Kbps, 512Kbps 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 no bandwidth caps will apply to any of these services, says MWeb.
Roman Hogh, head of technology and product strategy at MWeb Business, says there is a condition that there can only be one concurrent session. Only one login from one location is allowed at a time in order for the offering to remain economical for MWeb.
“But that's it. There's no soft capping or throttles or rolling thresholds.”
He adds that there is a reasonable usage term where illegal activities or activities that are harmful to the bulk of users will be addressed.
“There is nothing specific we are saying don't do, but should people engage in abusive or excessive or illegal activities, then we will call and speak with them,” says Hogh.
MWeb signed up with Seacom in March for a long-term agreement and is purchasing significant bandwidth, as Seacom gives MWeb access to a solution for international network capacity, at the best price currently available to the South African market, said MWeb CEO Rudi Jansen, in a press release.
These offerings are officially available from Monday for online applicants and Tuesday for others. Hogh says existing clients are already being migrated onto the new network.
Stirring up the market
This competitive pricing was introduced by MWeb because it felt a change was needed in the market in order for Internet penetration in SA to increase.
“In spite of the current stranglehold that Telkom currently has on the Internet market in SA, we felt that action of this significance was necessary to get SA to join the rest of the world and enjoy the social and economic benefits that broadband Internet has to offer,” says Jansen.
Hogh adds that the company is trying to take the restrictions away, where users never have to worry about how much they're using anymore. “The whole psychology of managing your usage is a thing of the past. The thrust of this launch is to free the Web.”
He adds that, in MWeb's view, Internet usage in SA has been quite stagnant when compared internationally, and this is because people always have to worry about what they're doing and how much they're doing. “That retards people from being inventive. We are just letting them do what they want with no restrictions.”
World Wide Worx MD Arthur Goldstuck says 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.”
Benefits for MWeb
Hogh says the company is not putting itself in the red by offering these rates.
“We have invested a lot in a network for this product offering, but we are definitely not making a loss. We are squeezing our margins, but - in the bigger picture - we believe that we will win.”
He explains that broadband is all about scale. “The more people join your network, the cheaper the broadband becomes. So we said let's cut our margins, let's give people what they want and when our margins grow we will also gain.”
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