Too soon to sign

This vibrancy is long overdue. While the number of local broadband users recently surpassed the quarter-million mark, with strong growth in both the fixed-line ADSL and wireless arena, South Africa has a paltry 0.5% broadband penetration - compare this to a country such as Korea which has 80% penetration. In fact, SA had the worst broadband penetration out of a sample of 30 countries according to a recent broadband penetration survey by the Organisation for Economic Co-operation and Development (OECD). While not all countries reached the impressive rates of Korea, the average broadband penetration rate in the participating OECD countries is 13.6%, leaving SA a full 2 700% behind the average.

The most likely reason for our low ranking is that we are one of the few countries still entertaining a monopolistic fixed-line environment. Telkom is currently the only company that provides fixed-line connectivity and this is the market that really determines broadband penetration, says Muller. Over 95% of all broadband connections in the OECD countries are fixed-line connections, while just over 60% of broadband users in SA make use of ADSL. "Internationally, very affordable fixed-line services drive up broadband penetration rates, while wireless offerings generally service as a complementary mobile service, or they serve the more remote areas of a country not covered by ADSL. The situation locally is very different, with wireless providers able to compete head-on with ADSL due to Telkom`s exorbitant pricing, poor service delivery and substandard services. One would be hard-pressed to find many countries where mobile broadband outperforms fixed-line offerings," explains Muller.

Telkom`s ADSL service, not surprisingly the dominant player in the local broadband arena, has an unofficial subscriber number of just over 165 000. The last official number of ADSL subscribers was 143 509 in March 2006, and Muller reckons that with a continued average monthly growth calculated over the last 12 months, Telkom would have reached the 165 000 mark in mid-June.

The second most popular service is Vodacom`s 3G/HSDPA offerings, which in July had a subscriber base exceeding 54 000. About 20 000 of these subscribers are HSDPA users.

iBurst recently surpassed the 20 000 subscriber mark, making it the third most popular broadband provider. MTN currently has more than 10 000 3G/HSDPA data card users, but the number of mobile broadband users will most likely exceed 30 000 if handset users are included in the total.

Sentech remains the smallest broadband provider, with around 5 000 MyWireless users. There are also about 10 000 broadband users countrywide being serviced by smaller wireless Internet service providers like UniNet, but, says Muller, this is a very rough estimate as accurate predictions from this particular sector are difficult.

DECISIONS, DECISIONS

Deciding which of these broadband offerings to opt for isn`t easy, particularly since it`s near impossible to compare apples with pears. Muller suggests that users first consider the purpose of its usage - can it be fixed for your business and/or personal use, or must it be mobile? If a user requires fixed use either in a home or office, the options are the Telkom ADSL, or semi-wireless iBurst or Sentech`s MyWireless offerings, he says. Urgency of usage, budget, coverage and stability will then come into play.

Telkom offers three packages, beginning with DSL 384 (DSL 194, the previous entry-level package, is now being subsumed into this offering), DSL 512 and DSL 1024, referring to download speeds of 384 Kbps, 512 Kbps and 1 024 Kbps respectively, with a 3GB cap. Fees include an installation fee of R404, a once-off modem bundle cost of R1 447, and then a monthly residential line (R92.28) or business line (R122.60) rental fee, excluding the ADSL monthly fee of R245, R362 or R516 respectively. Bear in mind that users still need to buy capacity (data bundles) and subscribe to an Internet service provider (ISP).

Although the DSL 384 has on several occasions been voted SA`s best broadband service, including by MyADSL, based on value for money and service speed and reliability, users must bear in mind that they may end up waiting for four months for the service to be installed, and will have to contend with what Muller describes as "truly useless" service support.

Telkom has indicated that it has contracted three independent service providers to help it deal with its ADSL installation backlog, which Rudi Jansen, CEO of MWEB, estimates to be around 50 000 orders. He also claims installation takes an average of six to nine months. MWEB last month became the first ISP to offer both fixed and wireless broadband access. Other ISPs include TelkomInternet, DataPro and Internet Solutions, which all offer Telkom ADSL-contracted services that are similarly priced.

THE SEMI-MOBILE OPTION

Muller notes that for users within their coverage area, and with a sense of urgency and requirement for good support, iBurst or Sentech`s MyWireless are worthwhile options, especially since they are semi-mobile.

iBurst, which currently has over 22 000 subscribers, and signs on some 700 a week, racked up 122% growth in subscriber numbers over the last five months alone. "We`re competing for Telkom customers," admits CEO Alan Knott-Craig Junior, and not with Vodacom and MTN, he adds. iBurst has aggressively been rolling out base stations this year, growing their number from 31 to the current 93. "We`ve built up network reliability, our billing systems and customer support to such an extent that we`re now feeling comfortable to make promises we can deliver on," he adds. It will continue rolling out 25 to 30 base stations a month, and will have spent R100 million on infrastructure by year-end. It offers several packages, including i-Go Lite, i-Go, G1, G3, G6 and G9. Its recently launched unbundled 1G service, priced at a very competitive R389 a month for 24 months, is probably one of the best options for home and small-business users who need wireless connectivity and mobility in the main centres of the country (Johannesburg, Pretoria, Cape Town and Durban). iBurst may not be as mobile as 3G or HSDPA, but what it loses in this regard, it gains in being slightly more cost-effective than 3G - especially for higher data usage, typically 3GB or more. (Its 3GB account is priced at R599/month, while Vodacom charges R1 497 for the same data allowance.) And it offers the fastest wireless broadband service, with speeds close to 1 Mbps at times, while reliability and customer service have improved dramatically since its early days. In fact, MyADSL rates iBurst the second-most caring broadband provider, after Vodacom. It also promises delivery within 48 hours. "Our biggest challenge is keeping up with growth," admits Knott-Craig Jr.

A challenge that its elder by nearly two years, state-owned Sentech, doesn`t seem to have to contend with. It has a mere 5 000 My Wireless users. Sentech`s lack of coverage (its 54 base stations only provide access in limited areas in SA`s major cities) and a lingering public perception of poor service is hindering it from signing up similar numbers of users as iBurst. This may change if government`s plan to provide state-owned Sentech with some, or possibly all, of the money it needs to build a national wireless broadband network comes to fruition. Negotiations are still in progress, says spokesman Dr Pranill Ramchander. CEO Dr Sebiletso Mokone-Matabane has estimated it would need to invest at least R1 billion in its network if it is to cover 80% of the population - the metropoles, the secondary centres and many of the major townships.

Nonetheless Muller has, in the past, described the service as SA`s most reliable and consistent wireless broadband service, even though its average download speeds lag behind ADSL, Vodacom`s 3G and iBurst. In particular, he described the high caps on its upper-range Flexi offerings (up to 20 GB) as a big bonus of the service. A 3MB allocation costs about R799 a month, with the modem (valued at R2 600) included. On the customer service side, Muller rates Sentech as "average".

ON THE RUN

If mobility is the determining factor for a user`s choice of broadband, then Vodacom or MTN`s 3G/HSDPA offerings are your best bet. The plug-and-play technology has been hailed as the broadband killer app, at least in SA, as it claims to deliver a maximum bandwidth of 1.8 Mbps. While in reality HSDPA doesn`t live up to its reputation, especially in international connectivity, when it comes to local download, it`s everything it promised it would be. Vodacom claims that under perfect conditions HSDPA downlink speeds are 1.8 Mbps, but says to expect speeds of between 400 Kbps and 800 Kbps with peaks of approximately 1.4 Mbps. Vodacom currently has in excess of 1 600 3G-enabled base stations around the country, covering 180 cities and towns, holiday areas, all major airports, major hotels and most business centres. Current expansion plans see it adding another 500 base stations to this number, says spokesperson Dot Field.

Muller says that HSDPA provides great mobility throughout the major metropoles, and can be a great addition to ADSL if you have the money. "The service is, however, best for low-usage, say under 3Gb, because of the high cost of bandwidth - it can become very expensive," he says. Field points out that as of 1 June, it reduced all standard in-bundle 3G tariffs by "a massive 20%, subject to ICASA approval". "This reduction in tariffs means that Vodacom customers cold pay as little as 39c per Mb." Its 1Gb package, comparable with iBurst`s, costs R599 a month, including the data card.

Both Vodacom and Telkom have indicated that they are aiming for a million subscribers each within the next three to five years, which is great news for the local broadband market, says Muller. MTN has also indicated that it aims to be the local broadband leader, and "with its deep pockets and great coverage we can expect high growth rates from this cellular giant", he notes. At present, MTN`s coverage is not as extensive as Vodacom`s, which could account for its slower uptake. In December it had 431 3G-enabled base stations in metropolitan areas countrywide - the current number is probably slightly higher. A 1Gb option on its F@stLink E620 data card, which supports HSDPA, 3G, EDGE and GPRS, costs R499 a month. And, Muller says, its data-related customer service is excellent.

"But let`s not forget about wireless ISPs and even municipalities. As competition in the broadband arena is increasing, we will undoubtedly see lower prices, better services and increased uptake of this vital resource," he points out.

Muller is hoping that by year-end, ICASA will have made known its ADSL ruling, which will apply to Telkom, the SNO and other ISPs such as MWEB and Internet Solutions. He`s hoping for a one-price unshaped ADSL service, and that service levels are addressed. "Then we will be able to compare services, making it easier to compete with Telkom."

And, just in case you were wondering, Muller currently uses MyWireless.