MTN plans to increase the promotion of its second-generation broadband (Edge) services, arguing the infrastructure is already in place to enable this move.
However, market commentators argue the mobile operator is probably focusing on Edge because of the low consumer uptake of its 3G/HSDPA offering.
Speaking in Johannesburg yesterday, MTN SA MD Tim Lowry said the company would use its existing infrastructure to offer Edge services.
Lowry said MTN has more than 2.5 million Edge-enabled devices in the market. Additionally, the entire MTN network is already Edge-enabled, allowing the company to provide Internet services outside the major metro areas, he said.
MTN has 47 876 3G data cards and modems and 57 112 HSDPA data cards in the market. It does not distinguish between cards used for handsets and PCs. By comparison, Vodacom says it has 139 000 broadband subscribers.
Offering Edge services in addition to high-speed broadband is also in line with practices by international operators, Lowry said.
Cynical view
MyADSL founder Rudolph Muller and World Wide Worx MD Arthur Goldstuck argue MTN is pushing Edge because of its low 3G/HSDPA uptake.
"I don't want to be cynical about MTN's Edge strategy, but the fact that they don't want to mention broadband numbers specifically raises the question of whether they are ashamed of them," Muller says. He is referring to the fact that MTN's figure does not differentiate between broadband users and other types of data users.
Muller also argues there will be limited demand for Edge services, as Vodacom offers 3G/HSDPA coverage in all major towns throughout SA, at lower prices than other providers.
"So what portion of the population that is interested in Internet and can afford it will not be covered by Vodacom's HSDPA network? I'm willing to argue it's not such a large population," he says.
The right price
Goldstuck says MTN's Edge product offering would have to be price-sensitive to succeed. The current ad hoc cost for data is R2 per megabyte. This needs to go down to 20c per megabyte to see real uptake, he says. "Edge can succeed - if the price is right."
He believes MTN's 3G/HSDPA product is far superior to Vodacom's, "largely because it is not as heavily utilised".
Vodacom has a massive user base, as it has been successful in marketing 3G/HSDPA, he says. This has unfortunately been degrading the network experience, he adds.
Goldstuck says while MTN's "under-whelming" uptake of 3G/HSDPA is a negative for the company, it is good news for consumers. It makes sense for MTN to push Edge technology rather than 3G/HSDPA, as it requires significant investment in infrastructure, while Edge simply requires a software upgrade.
Also, Edge can be used across the entire network, so it gives MTN an opportunity to match Vodacom in terms of coverage, he says.
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