Monday, March 16, 2009

Choosing your Internet Access Provider

If you are not already aware, the South African communications sector is undergoing a major shakeup at the moment:
  • Telkom have just sold their share of Vodacom to Vodafone and are also looking at partnering with Cell C. They have already launched some services that compete with the three cellular giants.
  • Neotel, the new kid on the block is slowly gathering a head of steam.
  • ICASA has just licenced a flood of new licences which will effectively allow quite a few new players to participate in the converged communications market.
  • Vodacom and MTN have teamed up with Neotel and are laying their own fibre network. They are both looking at offering fixed line access in the near future.
  • MTN have made some big aquisitions in the first quarter of 2009.
  • The first of a number of new undersea cables connecting South Africa with the rest of the World, will be going live in about three months time.
The list above, is just a small snapshot of the turmoil in the local telecommunications industry at the moment. Up until recently, the consensus was that the increased levels of competition would not necessarily bring down prices, but would increase service and service levels - i.e. for the same price you would now get a faster line and a higher cap (monthly data usage limit).

This week however, Vodacom made some bold statements about having to drive prices down and as we have seen before, if a major player like this makes a move, the rest are forced to follow.

Although we can't as yet predict the future, we can however issue the following warning. As lucrative as a deal might look at this point, do not sign any long term contracts. If you do, you will be locked in to higher prices for at least two years. If you go with an ADSL service, rather pay R500 - R1000 for your Modem/Router, than go for the free option which ties you in to the two year contract.

Probably one of the best options at the moment is to purchase a USB modem (about R1400 new). You can then purchase a prepaid sim card for R10 and load on data bundles as and when you need them. Vodacom and MTN offer them, but at this stage Vodacom has better coverage and their data rates are slightly cheaper.

You can buy a 500MB bundle for R189 from Vodacom. If you are just using the connection to check email and browse the Internet, this should be sufficient for about 30 days. One thing to be aware of, unlike prepaid voice purchases, data bundles do not roll over to the following month. Again however, there are already rumours that this may change very soon.

A great site to have a look at the many broadband deals available is

Gary Amstutz
Commercial and Online Manager


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