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Uncapped is the new black

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As video-on-demand and fibre-to-the-home begins to switch on in South Africa, the public will begin to learn the real meaning of data demand – and pricing models for data will have to change, writes ARTHUR GOLDSTUCK.

In the coming months, suburban South Africa will see an explosion in the use of both video-on-demand (VoD) and fibre-to-the-home (FTTH). The former will be driven by intensification of competition between ShowMax and Netflix, and the latter by the race between a growing number of start-ups laying down fibre in the suburbs. The fibre incumbent, Telkom, suddenly  finds itself up against Vumatel, Fibrehoods, Metrofibre, Maboneng Broadband and even MTN, among many others.

High-speed Internet theoretically eliminates buffering, although there’s nothing one can do about content that is housed on slow systems. However, for major commercial services like video-on-demand, the dream of instant streaming becomes reality.

Video-calling from home becomes a quality experience rather than the grainy, jerky visuals that have chased most consumers away from video chat. Online gaming tournaments where split-second reactions make all the difference are suddenly feasible. There are numerous other advantages and benefits, but there is also one major drawback: most fibre subscribers will run out of data almost as fast as they can say “Download THIS”.

The way FTTH works in South Africa is that the customer pays a once-off installation fee to the installer, such as Vumatel or Fibrehoods.  A choice is then made of service providers, who offer a range of packages based in line-speed and data allowance, either on contract or a month-to-month basis. Some of these providers will even carry the installation cost if their service is chosen.

The cheapest services start at 4Mbps with a 20GB cap (WebAfrica), at around R424 a month, and an uncapped 4Mbps service at R499 (Vox Telecom), both for month-to-month services. However, the typical FTTH customer has signed on to get serious speed and quality. Netflix itself advises a minimum speed of 5Mbps to watch streaming movies in high-definition. It says 3Mbps will do for standard definition.

What about ultra high-definition? Although the range of ultra-HD content isn’t great right now, it is accelerating fast to take advantage of new 4K TV sets and the increasing speeds of broadband. Bear in mind, most consumers investing in equipment right now are not expecting to have to repeat that spend in the next five or even ten years.

If one is already considering ultra high-definition movies, the minimum speed required is 25Mbps. For now, however, HD is expected to be the norm.

But then comes the data crunch.

According to Netflix, HD movies use about 3GB of data per hour. So if you are using Netflix to replace existing TV use, and you watch an average of 2 hours a day – and assuming only a single stream – that is already 180GB of data per month. This excludes regular Internet use, which in a typical suburban family of 4 can be well over 100GB when one adds social media, gaming, chat, YouTube binging, and trying out app after app.

This means that, to be safe, a family with fibre would need a cap of at least 400GB a month. If movies and videos are being streamed to more than one device, regularly, even that is an optimistic cap.

The real message is that, if VoD is replacing TV and you are moving existing heavy Internet use to FTTH, then uncapped makes sense.

Now it starts to get complicated. Uncapped services at reasonable speeds start at a seemingly reasonable R799 (from Cool Ideas and XDSL) – but there is a massive discrepancy between download and upload speeds: both offer 20Mbps down and 2Mbps up. Which is fine if one is only watching movies, but not much better than ADSL for high-speed gaming, video calls and anything else requiring high speed in both directions.

In short, the cheapest fast-download uncapped offers may well provide an experience equivalent to ADSL.

The weakness of ADSL lurks in the meaning of the acronym: “asynchronous digitals subscriber line”. The asynchronous part means you get about a tenth of the download speed for uploads. A line running – if you’re lucky – at 8Mbps downloads typically gives only about 0.8Mbps uploads. Hence the horrible quality of Skype video chats on typical ADSL lines.

The cheapest FTTH deals, then are also asynchronous, making them ADSL alternatives rather than the full experience of fibre. Cool Ideas offers uncapped 20Mbps up and down at R899, while XDSL offers the same at R999.

While both offer free installation and only a month-to-month commitment, the drawback of the sub-R1000 options is that most still do not deliver on the future that fibre promises. Based on currently available content, websites and behaviours, a no-limits service would start at around 50Mbps down, while some level of asynchronicity would be tolerable, i.e. from 5Mbps upward.

Here again, Cool Ideas leads the way with a 50/5Mbps uncapped package at R999, while a 50/50Mbps service comes in at R1099. The equivalent priced service from MWEB and Vox Telecom, with the same speeds, have 500GB and 400GB caps respectively, just scraping in to the minimum that a highly-connected family would need.

The truly high-speed home or office may well be looking at 100Mbps speeds, and here the cost shoots up, with Cool Ideas offering an uncapped 100/10Mbps service for R1499, and XDSL at R1549. The 100/100Mbps service from Cool ideas goes up only slightly, to R1599. At the time of writing, no one else seems to be offering uncapped services at these speeds, although Cell C is trialling its service.

MWEB offers an insanely fast 1Gbps download service, with 100Mbps up, but astonishingly places a data cap on it – a mere 500GB. The R2499 cost may be dirt cheap compared to an equivalent service just five years ago, but customers of the service would want a bit of uncapped to go with it.

The bottom line for both customers and service providers is to appreciate that isn’t their father’s ADSL. In a new content world, with quality of image and format rising fast and data demand going up even faster, uncapped is the new black.

Speeds may vary, and different usage will require different speeds. But just as ADSL as we know it is no longer good enough, service providers’ current data caps are out of sync with the content explosion these same service providers are promising.

* Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee

Africa News

Smart grids needed for Africa’s utilities

Power utilities across Africa should rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem, says COLIN BEANEY, Global Industry Director for Asset-intensive and Energy and Utilities at IFS.

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Africa’s abundant natural resources and urgent need for power mean that it is one of the most exciting and innovative energy markets in a world that is moving rapidly towards clean, renewable energy sources. The continent’s energy industry is taking new approaches to providing unserved and underserved communities with access to power, with an emphasis on smart technologies and greener energy sources.

Power systems are evolving from centralised, top-down systems as interest in off-grid technology grows among African businesses and consumers. And according to PwC, we will see installed power capacity rise from 2012’s 90GW to 380GW in 2040 in sub-Saharan Africa. Power utilities are needing to rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem.

Energy and utilities providers are transforming from centralised supply companies to more distributed, bi-directional service providers. They can only achieve this through the evolution of “smart grids” where sensors and smart meters will be able to provide the consumer with a more granular level of detail of power usage. This shift from an energy supplier to “lifestyle provider” will require a much more dynamic and optimised approach to maintenance and field service.

African companies must thus embrace digital transformation as an imperative. This transformation begins by embracing enterprise asset management to improve asset utilisation. The subsequent steps are enhancing upstream and downstream supply chain management; resource optimisation; introducing enterprise operational intelligence; embracing new technologies such as the Internet of Things, machine learning, and predictive maintenance; and becoming a smart utility.

Embracing mobility to drive ROI

Getting it right is about putting in place an enterprise backbone that accommodates asset and project management, multinational languages and currencies, new energies and markets, visualisation of the entire value chain, and mobility apps. Mobile technologies that support the field workforce have a vital role to play in driving better ROI from utilities’ investments in enterprise asset management and enterprise resource planning solutions.

Today’s leading enterprise asset management solutions feature powerful functionality for mobile management of the complete workflow of work orders – from logging status changes and updates, from receiving and creating new orders to concluding the job and reporting time, material and expenses. Such solutions are easy to deploy and intuitive for end users to learn and use.

Importantly for organisations operating in parts of the continent with poor telecoms infrastructure, connectivity is not an issue. The solutions work offline and synchronises when network connectivity is available. Users can work on any device—laptops, tablets, and smartphones—commercial or ruggedised.

By ensuring that field technicians have easy access to information and processes, the mobile solution enables technicians and maintenance engineers to easily do the following tasks:

·         Create a new work order on the fly and log new opportunities

·         Access both historical and planned work information when requested

·         Permit customers to sign when the job is completed

·         Capture measurements and inspection notes on route work orders

·         Create new fault reports on routing

·         Facilitate documentation through photo capturing

·         Provide easy access to technical data and preventive actions.

The power of mobility allows the engineer to be the origin of all data capture on a service event. They can easily inquire on asset history, record parts used or parts needed for repair, record labour hours, and expenses as they occur, and any notes of repairs performed. When coupled with workforce management tools, such solutions unlock significant productivity gains for utilities who are trying to get the most from their workforce and assets.

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Brands fall for app vanity

The experience of a mobile screen full of icons, representing independent apps that your need to open to experience them, is making less sense. Instead, businesses should serve customers with an ‘app-like’ experience inside the digital platform they already use, says PIETER DE VILLIERS, Group CEO at Clickatell.

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Many brands remain obsessed with creating mobile apps. This not only defies trends that point to increasing consumer app apathy, but can exclude a sizeable portion  of your customers in emerging economies. Companies need to engage with their users where they are rather than forcing them onto an app, in what can only be described as brand vanity. 

In 2017 there were around 2.2 million apps available in the iOS app store and over 3 million on Google Play. And, while the number of apps being downloaded continues to rise, analysis shows that consumers are only using 30 apps per month and accessing just 9 on a day-to-day basis. 

While these numbers still seem attractively high, in reality the majority of the apps we use are for messaging (like Facebook Messenger, WhatsApp, and WeChat) and our social networking, gaming, leisure, dating or utility activities. 

Despite the facts, the application strategy as the holy grail for digital transformation is still being pushed even within large progressive brands. What’s more, some advertising agencies and digital consultants are still pushing apps as the best means for companies to connect with their customers. This has resulted in some organisations stubbornly doubling down on app strategies which are simply not showing return on investment (ROI). 

It’s not immediately clear to us whether the fascination with apps is a roll-over from long overdue projects or whether brand owners equate a mobile-first strategy with a mobile app. Mobile-first in 2018 means customer first, and therefore embracing chat commerce in order to deliver services with convenience and simplicity in mind. 

Why apps won’t win the internet

The problem with apps goes beyond user fatigue. In the first instance, many apps are poorly designed, assuming technical sophistication which may not match reality for the average customer. Poor user interfaces and attempts to provide complex engagement can result in even the best ideas missing their targets due to lack of engagement. 

Secondly, we all know that economic realities drive consumer behaviour. In Africa, new mobile phone users typically opt for feature phones over smartphones. With a longer battery life and a much more accessible price point, feature phones still allow for a basic internet connection, chat platforms like WhatsApp, and call and message functionality. In these regions, the cost of an app – even if it’s free – goes far beyond installing it. Constant updates require reliable and cheap access to the internet. For the average phone owner in an emerging market, this can be a serious challenge. 

Thirdly, and most importantly, apps must be relevant to their intended market. Frequency of usage is a key measure of relevance. 

Apps which are used on a daily basis, like health and fitness trackers, enjoy constant engagement. New features which are added are eagerly awaited by users who are happy to update their apps. 

However, users may well question the relevance of the app if they are required to conduct updates on a monthly or even weekly basis when they are only making use of the app once or twice a year. 

On average, I download one app per quarter. Some I use more frequently than others, but all of these apps need to be regularly updated to maintain security, update features, and fix bugs. Many apps are pushing out updates much more frequently. I noticed over the past year that I could go from having all apps updated, to 32 apps requiring an update in five days.

When it comes to a customer-first digital strategy, companies should be asking themselves if an app is really the best way to reach their target audience. 

In fact, at the end of 2016, Gartner predicted that by 2019, 20 percent of brands would ditch their mobile app. What’s more, in its 2018 predictions, the company forecast that by 2021, more than 50 percent of corporations would spend more per annum on bots and chatbots than on mobile app development. 

So, we need to ask, what is the alternative for CIOs, CDOs, CMOs, and digital leaders who are looking for ways to reach, retain and grow their customer base? 

The logical app alternative 

The old battle advice goes: fight your enemy where they are not. Military strategists agreed that having your enemy come to you and fight you on your own terms was preferable. In a world where customers have access to thousands of offerings and millions of deals online, we need to flip that idea to Meet Your Customers Where They Are. 

Any marketeer will tell you just a how difficult it is to drive app downloads. Development, cross platform testing and user interface aside, the marketing campaign required to get customers to download the app can swallow entire annual budgets and still come up short. 

Looking at the facts, it makes infinitely more sense to work within the digital platforms already being used by your target audience. 

Clickatell is already enabling chat commerce for some of the leading global brands with its Touch solution. This allows organisations to serve their customers with an ‘app-like’ experience inside the chat or browser platform of their customer’s choice (Twitter, Facebook Messenger, etc.) 

Brands can now send an actionable Touch link such as ‘find the nearest ATM’ or ‘reset my password’ within a chat stream that will open an intuitive touch card without the user having to download an app to perform the action. Services can also be linked to the in-app experience for brands not looking to abandon their app efforts. 

Working with our clients, many of whom are global innovators and thought leaders, we’ve found that having the courage to design with an ‘end user first’ approach and dealing with the back-end complexity behind the scenes results in cost efficient customer delight and ROI. 

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