MTN slashes broadband cost

In the wake of 8.ta’s announcement of rock-bottom mobile broadband prices, MTN have slashed their “uncapped”” broadband costs and added WiFI to the mix, writes ARTHUR GOLDSTUCK.

As expected, the recent announcement from 8.ta that the Telkom mobile service would be offering its broadband service at R199 for 10GB capacity has sparked a new price war.

“”MTN has enhanced its uncapped Internet packages with effect from 1 July 2011 in response to its customers’ demands for faster and reliable Internet access at an affordable fixed monthly cost,”” the company announced today. “”These packages are not new but the value has been substantially enhanced.””

The monthly subscription cost of MTN Broadband Uncapped Lite has been slashed by 60%, reduced from R749 to R299. The cost of MTN Broadband Uncapped Pro has been cut by 55%, down from R1,999 to R899. Both are available on a 24-month contract

However, these are not fully uncapped services: the two packages will be subject to a “”fair usage policy”” of 3GB and 10GB respectively. After those limits have been reached, the user will still be able to access the Internet and download files or e-mail, but the connection speed will be throttled down to 128Kbps.

The price cuts have not been unexpected, even in the absence of 8.ta’s pricing, as the network has been investing heavily in its own fibre network, whcih will enable it to manage its input costs far more efficiently.

Says Serame Taukobong, MTN South Africa Chief Marketing Officer: ‚The substantial investment that MTN has made in undersea cables and the fibre optic network has seen increased broadband capacity and a surge in data appetite. By bringing this value add to our customers we hope they enjoy the seamless experience that comes with being on MTN’s world class network.‚

The fair use policies are deeply controversial, and it is questionable whether such services can be called uncapped. It is highly likely that the description will be challenged through the Advertising Standards Authority. However, MTN says they have been put in place “”to ensure the integrity of the network and that the consumer experience is seamless””.

According to the MTN announcement, once the 3GB and or 10GB “”fair use limit”” has been reached, the connection speed will be reduced to 128kbps for the user for the remainder of the month.

“”Users will still be able to access the Internet and download content, it will just take a bit longer.””

This does make it in effect an uncapped service for usage that doesn’t rely on high speeds, like e-mail, instant messaging and basic web sites.

Further on the plus side, regardless of modem used, all consumers using MTN Broadband will have access to the fastest available speeds at no additional cost. MTN will also facilitate the use of the service for office or home WiFi networks – the first time a South African mobile network actively promotes this as part of a subscription bundle.

The MTN announcement elaborated on this service: “”The packages will be sold with the MTN Sh@reLink WiFi internet router that allows the family or office to share one Internet connection, thus controlling and saving on Internet costs. Depending on the capability and capacity of the MTN network and capability of the modem or router, a customer can connect at speeds of up to 21.1Mbps. They will only be limited by their device capabilities and network capacity.””

MTN confirmed that it had recently completed the roll-out of its 14.4Mbps network in all 3G-covered areas and is currently rolling out a faster broadband network with speeds of up 21.1Mbps in high demand areas.

‚MTN is committed to providing fast broadband network access even in outlying areas in South Africa and will be announcing plans soon on how we will achieve this. This is part of one of our key objectives to provide all consumers with the best broadband service in South Africa at an affordable cost,‚ says Taukobong.

MTN have also addressed the controversial issue of data carry-overs:

“”In a bid to enhance customer experience and ensure that subscribers get value for their money, MTN has recently launched two carry-over features, one for all Internet packages and recurring Internet bundles and another for all once-off Internet bundles . “”This carry-over extension feature, which is an industry first in South Africa, on all actively marketed Internet packages including TopUp and Internet bundles, will enable MTN subscribers to carry over their unused Internet data for additional months over the term of the contract with a maximum carry-over extension of two times the monthly inclusive Internet value.

“”For example, an MTN subscriber who is on a 2GB internet package for 24 months will now be able to carry over unused data in line with their cap until cancellation of the contract, with a maximum amount of data that is permissible being twice the monthly inclusive value, ie: 4GB in the above example.””

The announcement comes as the National Cosumer Commission turns its attention to the cellphone networks’ possible violation of the Consumer Protection Act, which makes it illegal to penalise customers for not using a service for which they have paid. Other networks are expected to follow suit with similar relaxation of their data carry-over policies.

* Follow Arthur on Twitter on @art2gee

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