iBurst has redesigned and renamed its wireless broadband packages, offering products that cost 12c per megabyte.
Last week iBurst announced plans to launch five packages, as well as add more data allocations to existing packages.
A data bonus was made available to all 24-month contract customers from 1 March, and will be extended to all month-to-month customers as of 1 April, the company says.
This means all new and existing customers will receive an additional 500MB on the high-usage packages aimed primarily at business users, and 200MB for packages aimed at individual users.
Month-to-month subscriptions account for 65% of iBurst's broadband subscriptions, says iBurst MD Allan Knott-Craig Junior.
Entry barriers
Knott-Craig says iBurst's new R179 per month intro package, consisting of 200MB data allocation and modem, goes a long way towards lowering the entry barrier for first time Internet users. It also allows users, who previously used dial-up Internet, to move to broadband and cut costs, he says.
He adds consumers have the perception that dial-up Internet is the cheapest offering in the market.
However, when one adds the total cost - R79 for basic Internet access, R92.80 for residential line rental and the phone bill for usage - the cost is much higher than an entry-level broadband offering, he notes.
Is it war?
Broadband providers and market commentators are divided on whether there is a broadband war. Some market commentators claim it is outright war, while others say the robust competition the South African market demanded has now arrived. For the most part, operators insist they are simply offering better value for customers.
MTN's GM of marketing and corporate affairs director Bernice Samuels says the company is not looking to only offer drastic price cuts, but to offer a good value proposition for customers.
"People are not looking for cheap, cheap, cheap every time," agrees iBurst CEO Thami Mtshali.
Nonetheless, he and Knott-Craig acknowledge the latest product revamp was as a result of a series of price cuts introduced by Vodacom and MTN in the past year, and Sentech's competitive high-usage offerings.
Knott-Craig says "the recent brush with Vodacom and MTN accelerated the process," which began last month, with the new offerings to be introduced later in the year.
He does, however, note that while iBurst may introduce more price cuts throughout the year, these will not be as drastic as its recent moves.
Knott-Craig also notes iBurst is perfect for voice services using voice over Internet Protocol (VOIP) services, especially for international calls. As iBurst does not offer voice services, there is no danger of cannibalising its own revenue through the use of VOIP, he adds.
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