Internet game changes for SA users
2010-03-18 09:13
Cape Town - MWEB has thrown down the gauntlet to its competitors by announcing uncapped broadband packages for local users, in what looks set to change the internet landscape in South Africa.
"We realised there's a major gap in the market. South Africa doesn't experience the internet like the rest of the world does. It's a fantastic opportunity to change the internet in SA," MWEB CEO Rudi Jansen told News24.
Jansen added that the market still has a long way to go.
"This is not the end. There are still probably three or four big things that have to change in this market and for us, this is the first step. The other things that have to change are we have to get the mobile operators to offer wholesale data. The more competition there is, the better it is for the market.
"Telkom has to allow users of ADSL to split the line rental for the telephone line and the line rental for ADSL. That absolutely has to happen; then this market will grow," he added.
Monopoly
Even though MWEB and other ISPs can offer data, Telkom has the monopoly on the lines into households at present. Jansen said that inter-process costs (IPC) were hurting the market.
"Peering and the IPC cost is the biggest killer of the internet in this market. If those costs are reduced, we'll see costs come down even further," he said.
Jansen said that MWEB subscribers would not automatically be expected to fork out for the uncapped ADSL, but that they would be upgraded, depending on the package they currently had.
"For the people who are on a product, where the price point is more than what the uncapped product will actually go for, they will automatically migrate to the uncapped product.
"For the capped products, where the pricing is less than the uncapped product, we've given the people additional bandwidth on those products so going from one gig all inclusive at R199, that will go to two gig. But those people will keep paying R199. The uncapped product starts at R219. We don't want to force people to pay more; if they choose to pay more they can actually do it," said Jansen.
He added that the service would be available to subscribers on April 1 and new users could join on March 22. He also clarified MWEB's position on whether the service was truly "uncapped".
"It will change users' online behaviour, we've seen it wherever we operate in the world. And yes, it's truly uncapped. There are acceptable use policies in place. If you're going to run your business with massive amounts of piracy, video downloads, that's not what this is for.”
Competitors
"This is to stay within the law, so things like that we won't tolerate. So as long as you stay within the boundaries of the terms and conditions, it is truly uncapped. You can use a 100 gig of data if that's what you want to use," he said.
He also warned that MWEB profits would be reduced in the short term.
"Like any subscription business, it's a volumes game. Our margins will decrease dramatically, but the more people we get on, it will pay the bills. It's an investment we're quite prepared to make into the future and the business plan showed a turnaround within a year."
Jansen threw down the gauntlet to competitors.
"For the competitors, they're free to follow us - they're free to be stuck in the dark ages. It's up to them; it's a difficult one to speculate. I hope it changes the market for everybody and our biggest hope is that it brings down the local cost."
News24 is part of 24.com, a subsidiary of Media24, which is in the Naspers stable. MWEB is a subsidiary of Naspers.