Johannesburg, 01 Jul 2004
Internet service provider (ISP) Storm aims to use new products to help it navigate the South African consumer Internet market. The ISP launched its new service for consumers today.
Storm says the decision to move into the difficult home market is a big change in strategy, as it has built up its business in the corporate market, turning into a R250 million company with 140 staff in five years.
Its product offerings include two consumer options. The first is a 24-hour and seven days a week connection for R125 per month for ISDN, or R95 per month for analogue. The second is a 15-hour per day connection between 6pm and 9am for R55 per month for an analogue subscriber, or R85 per month for an ISDN user.
"Since Storm's core network is corporate and that obviously sits idle when people aren't at work, it makes sense for us to use it to target the residential market too, as the majority of the home market naturally uses the Net outside of working hours anyway," says Storm MD Tim Wyatt-Gunning.
"I do think our product is most suitable for people that have been using the Internet for two or three years already and know their way around, rather than first time users."
Storm hopes the key to its success in the consumer market will lie in the introduction of technology that will increase surfing speeds by up to four times, enabling a dial-up user to achieve near 64k ISDN speed from an analogue connection.
Wyatt-Gunning says the Storm Accelerator sits on a proxy server and zips pages between it and the user, so no user downloads are needed. This software was developed in the US especially for Storm.
The second piece of technology is the Storm Contact Manager, which was developed in-house. Features include an address book that is stored on a Storm server, automatic notification of new e-mail addresses, marketing benefits and contact backup facility to Web mail.
Voice over Internet Protocol products will be introduced as soon as possible, Storm says.
The company plans to attract about 9% of the 1.1 million current Internet subscribers over the next three years. It estimates the market will grow at about 8% per annum, or 90 000 new customers will enter every year.
South African consumer Internet market growth has slowed over the past few years. Media conglomerate Naspers recently blamed telecommunications monopoly Telkom and the impasse in the country's telecommunications laws for the stagnant growth seen in its Internet consumer business M-Web, which has 242 000 clients.
Italian-owned ISP Tiscali is in the process of selling its South African operation, which has a subscriber base of about 100 000 people, stating that the local environment is at least 10 years behind Europe.
Wyatt-Gunning says the South African consumer Internet market is ripe for an independent, fast, service-driven and cost-effective ISP.
"Consumer needs have become more sophisticated since dot-com days. It used to be 'connect me to the Net and show me how to use it', but now it is 'get me to my banking site quickly, reliably and cheaply'," he says.
The roll-out for the Storm consumer service has already begun, and the service is available in Gauteng. The Western Cape launch will be on 1 September.
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