Pressure on South African mobile broadband prices is not showing signs of easing

This post is a follow-up to the one I published in May 2011.

Cell C introduced the first ever mobile data specials in Mzansi with their 2Gig and 5Gig bundles in late 2010, and the lowest the cost per MB of 5 cents was on the 5Gig bundle for both contract and prepaid customers. At the time Pieter Uys, the CEO of Vodacom, mentioned that these price specials cannot be sustained as they were below cost. However, Vodacom adjusted its everyday data costs down in April 2011 by an average of 26%, and introduced a 2Gig (+Night Owl 2Gig) special to contract customers. MTN followed soon with a 2Gig special in May 2011.

The broadband specials above ran out by October 2011, leaving 8ta to enjoy the limelight with a 10Gig special at the lowest ever cost of 2 cent per MB, but it is limited to contract consumers.

While local broadband costs are still higher than ADSL, 8ta’s 10Gig special is very competitive when compared to Telkom’s AllAccess 8Gig package that looks attractive on the phase of it (1.6 cents per MB), but comes with ridiculous restrictions and the standard inclusion of unnecessary landline rental.

Enter the new hot Summer special.

Vodacom 20 gig data special

Given what Pieter Uys said regarding Cell C’s data specials earlier this year, I was gob-smacked when Vodacom introduced a 20Gig Summer special for both contract and prepaid customers in December 2011, which brought cost per MB all the way from 19.5 cents to 2.5 cents albeit during a short promotional period that ends on 9 January 2012! Don’t get me wrong, I am elated by this latest development given its further downward pressure on data costs, despite this special being limited only to heavy users of bandwidth like myself. I could not help, but wonder about the credibility of Pieter’s statement as it is clear that Vodacom’s own data prices are trending down overall.

MTN also introduced a Summer 2Gig special at 7.5 cents per MB for contract costumers. The mobile operator with the second highest market share in South Africa continues to adopt a reactive pricing strategy.

Here are my key insights from broadband cost trend in 2011. Firstly, the frequency of and increasingly cheaper data bundle specials are becoming the norm in Mzansi. The apparent race by the mobile operators to outdo each other is paying desired dividends for broadband consumers. Secondly, this will encourage the consumers – and especially prepaid – to actively shop around for best deals. Thirdly, a new consumption behavior may arise due to the need to own multiple data SIM cards as determined by mobile operators’ broadband specials. My advice is that consumers must start looking for universal modems that will allow for switching of data SIM’s as the need arises.

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Updates on data specials since publishing of this post

Updated 21st January 2012MTN’s Uncapped Data Lite @ R289 per month  and 2Gig special @ R149 on a 24-month contract, were advertised in January 2012. Compare the latter special to 2Gig everyday price of R389. I use up to 10 gigs of data monthly. With the uncapped data package, I shall effectively be paying 2,89 cents a Meg.

CAUTION: MTN calls the uncapped data special a Lite product. It is worth checking what this means before your freedom to switch is taken away for the next 24 hours. Also, just make sure you read the terms and conditions relating to “fair-use” policy, so you know what you are getting yourself into.

Updated 29th January 2012. 8ta launched a 60GB (+60GB midnight surfer) prepaid special was launched in mid-January 2012, at a once-off price of R1800. The stipulated usage period for this special is 12 months, and it effectively results in minim cost per MB of 3 cents (excluding “midnight surfer” data). The greatest attribute of this latest special is that data usage is not rationed on a monthly basis for the stipulated period, as compared to the first ever special in the data market that was launched by Cell C in October 2010. With the latter special, only a maximum of 5GB could be used a month. As a result, unused data for any month was forfeited. On the other hand, additional data exceeding the monthly 5GB allocation had to be topped up. With 8ta’s latest special, monthly usage can be varied, allowing users to use more data in some months and less in others as the need may arise. The only downside is that heavy users like myself will got through the 60GB long before the stipulated 12 months period expires, but this special still offers a better deal.

Notice that 8ta’s 10GB special (mentioned above) is still the cheapest at 2 cent a Meg thus far. 

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2 thoughts on “Pressure on South African mobile broadband prices is not showing signs of easing

  1. I bought a Cell 21Mbps modem and sim card in Aug 2011. It cost me R3000 and for that I get 5GB a month. Of course there is the occasional problem with deadzones in my house but every time I think about how lucky I am to be free of Telkom I smile and continue.

  2. Hi @Jeff. I also use the same data package as yours, and it is expiring at the end of Feb. I tried to get 8ta’s 10Gig special, but Telkom gave me hassle so I dropped the idea. I am going to check out Vodacom’s 20Gig special before it ends. As you can see, the need for multiple data cards is unavoidable.

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