Another salvo in broadband war

Johannesburg, 05 May 2010

Local Internet service provider (ISP) Branded Internet has struck another blow in the broadband battle, dropping its per-GB price to R8.

The company provides services on behalf of local retail and service businesses, including Musica, Edgars Club, Momentum Multiply, Sahara Computers, Huge Telecom and Sanlam Reality.

Branded Internet allows retail businesses to make an offering with their own branding and later to offer Internet-related products over the capacity.

Musica entered the market earlier this year with an offering at R35 per GB, but will now be able to drop its rate with Branded Internet's new competitive price. Musica may be looking to pick up on an online music store, because it could help it boost its customer base.

“With this latest reduction in our bandwidth prices, we're enabling our partners to give their clients ADSL access at the lowest rates in the market, even after they apply a healthy profit margin,” says Branded Internet CEO Lance Terner.

However, Steven Ambrose, MD of WWW Strategy, says the offering appears to be too little too late. He says a capped model no longer makes any sense in the local Internet environment.

Since the dramatic release of MWeb's uncapped bandwidth offering, local ISPs have been battling it out to provide the lowest cost offering to the South African consumer. Ambrose says uncapped is now the way of the consumer future and, while capped services have their place, it's not in the consumer market.

He says for the majority of people, the capped solution is completely incompatible with the way the Internet in SA should now be used. “People are mad if they think this is another price slash in broadband,” he adds.

Ambrose says uncapped removes the question of how much time a consumer can spend on the Internet.

Despite the criticism, Terner says Branded Internet believes it has come up with a compelling offering. “Uncapped offerings are heavily shaped and will soon become highly contested. What we are offering is quality of service with a decent price on the cap.”

Terner says he is so confident of the value of his new product that he will supply a free trial account to anyone who questions the quality of the service. While he agrees that uncapped solutions also have their place, he says that, for customers who are looking for low contention, capped is still the way to go.

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