Data dreams come true

The last two weeks saw massive price cuts in mobile broadband data charges ‚ but a few nightmares still lurk in our broadband bills, writes ARTHUR GOLDSTUCK .

The humble 3G modem that’s become an indispensable accessory to any laptop just got humbler.

Once upon a time, six years ago, it was a tool for the truly elite. With the cost of data then R50 per Megabyte (MB), it was a luxury item that only the wealthy or the desperate would use, and then only very sparingly.

After howls of outrage from the market, the networks ‚generously‚ announced a ‚98% price cut‚ ‚ down to R2 per MB. In the last few years that price also started falling, mainly for customers of data bundles.

And, in the last two weeks, all four mobile networks announced massive cuts in the cost of various mobile broadband services. This comes more than nine months after Cell C announced their rock bottom pricing ‚ which the rival networks initially dismissed as ‚unsustainable‚ .

Cell C priced their 5 Gigabyte (GB) service at R199 a month, including modem. That set the cost per MB at 4c, making the modem ‚ valued at around R1000 ‚ practically free. Telkom’s 8.ta network went one better in the last few weeks, announcing a ‚promotional‚ cost of R199 for a 10GB data bundle. That works out at 2c per Megabyte (MB) ‚ although with no modem included.

MTN then chimed in with an uncapped service at R899 a month. In reality, it wasn’t uncapped, since only 10GB were offered at peak speed. However, after using it up, the customer could still get unlimited access at a much slower speed. At the top speed, that’s around 9c per MB. For the heavyweight user who doesn’t always want speed but always needs access, it was another sweet offer.

Finally, last week, Vodacom joined the fun with reductions in price and increases in capacity across most of their bundles. Their 3GB bundle now sells at R498 ‚ the cost a couple of years ago of a 500MB bundle. That works out at 16c per MB, with an out-of-bundle rate of 50c.

Cell C responded instantly, announcing 10GB and 20GB bundles at R499 and R899 respectively ‚ the latter in effect half the price of MTN’s latest offer. Excluding the modem, the packages work out at R333 and R666 respectively a month ‚ or 3.3c per MB.

Vodacom remains the most expensive mobile broadband service in South Africa, but they also remain the biggest. In their quarterly results announcement this week, they revealed they now have 3-million data bundle customers.

Clearly, there has been no loss of appetite for using their services. Vodacom’s data revenue grew by 37.6% in the last quarter. But rather than justify high prices, this growth indicates how important mobile data access has become, and how much people are willing to pay for what has become an essential service.

This also highlights one little statistic that was not pointed out in the recent price cuts: for an ad hoc data user, not on a data bundle, the cost per MB remains R2 ‚ and it hasn’t changed since 2005.

That’s not the worst of it. Should you go roaming with your 3G modem or use data on your phone outside South Africa, the cost rockets up: up to R140 per MB on MTN, and up to R125 on Vodacom. This means that the typical traveller making typical use of a phone or modem on a short overseas trip will come back to an extra bill of anywhere from R5 000 to R100 000. It’s all legal, but it is also all wrong.

So, while the networks start making our data dreams come true ‚ and less than 20c per MB is a dream come true in this country ‚ they also need to make the rest of our data nightmares go away.

* Arthur Goldstuck heads up the World Wide Worx market research organisation and iseditor-in-chief of Gadget. You can follow him on Twitter on @art2gee