Caps off, knives out
2010-03-19 08:35
Yesterday morning, after a lot of fanfare, MWEB announced their bravest business move since their Big Black Box: they are now offering uncapped ADSL for as little as R219 per month.
"Uncapped" means exactly what it sounds like: unlimited usage with no annoying monthly data cap and no expensive top-ups just so you can download that vital e-mail on the 31st of the month.
So what's the catch? A long contract, right? Nope - it's month to month all the way. Ok, so you need a special new kind of line or gadget? Nope - this is standard ADSL, just without that damned cap.
MWEB (or rather their marketing agency, Quirk) have done a brilliant guerrilla marketing job on this launch, concocting a grassroots Facebook campaign called "Free the Web" that attracted nearly 15 000 fans in a matter of two weeks.
But, of course, it's not really "free" at all. You still need to pay Telkom R131 for a phone line, and the all inclusive package from MWEB - which includes the necessary ADSL network access - is actually R349. The R219 is a "data only deal" - you'd need to be an existing ADSL user to benefit from it.
So rather than R219 per month it's really R480 - still quite a chunk of change for us working schlubs. The data on this package is also "shaped" - in other words throttled and limited. This makes it ideal for the ordinary surfing public but not great for the kind of hardcore users that uncapped lines normally attract.
Those hardcore users are extremely unimpressed by the offer and vented their spleens all over Facebook after the announcement. Their main annoyance is with the low speeds offered, and they have a point - 384Kbps isn't true broadband by international standards.
But, nit picking aside, this is a vital step forward for broadband access in South Africa. MWEB are the largest internet service provider and, in many ways, they set the tone of the market. That tone has just become a lot more urgent.
And, though I may quibble about price, many of MWEB's competitors suddenly look astronomically expensive by comparison. For R40 more on Telkom you currently get 3GB (plus 20GB of local-only usage). For R70 more Afrihost will give you 10GB.
The 3G networks are even worse off: R480 will buy you less than 2GB. iBurst are significantly cheaper - giving you 5GB for around the same amount. But none of those sound as good as "unlimited".
A few smaller outfits like Screamer offer uncapped access, but their cheapest data package costs R399 per month which amounts to R660 per month with the ADSL line.
The only large provider who can currently compete with that price is Neotel which offers "unlimited" internet data for R469 in total - which equates to R208 per month for the data. Unfortunately their site is too maddeningly simplistic for me to tell exactly what "unlimited" really means, or how fast the line is, so this may not be comparing apples with ADSLs.
But the most important shift here isn't in price - it's in perception. At a stroke MWEB have made "uncapped" access a mainstream phenomenon - something people will quickly expect and then demand. If they play their cards right it may also win them huge numbers of new customers.
So is this a revolutionary business move or PR stunt? In the end it hardly matters: the genie is out of the bottle and “uncapped” is now the de facto standard. Whether you like MWEB or not, they have just changed the game.
FULL DISCLOSURE: I work for Media24 who are owned by big daddy Naspers, who also own MWEB. I also worked for MWEB for four years. That does not make me a fan.
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