Vodacom has taken the lead in the broadband price war from MTN, by slashing its data prices by up to 61%. For offerings up to 3GB, Vodacom now has the best prices, says MyADSL founder, Rudolph Muller.
The largest price cut was on Vodacom's bolt-on My Gig 2 package (without a data card), which dropped by 61%, from R998 per month to R389 per month, R10 cheaper than a similar offering from MTN.
My Gig 2 contract package (with data card) also saw a substantial discount of 59%, going from R1 098 per month to R499 per month, while Vodacom's cheapest offering is My Meg 500, at R189 per month; down from R350 per month.
"The gloves are off regarding broadband prices," Muller adds.
Competition
World Wide Worx MD Arthur Goldstuck says Vodacom's price cuts are the most convincing yet, as they apply fairly evenly across the board, as opposed to tinkering with high-end packages. However, he argues the price cuts are not part of a price war, but a response to the decreasing cost of international bandwidth.
"Telkom has been lowering its wholesale cost of data moving across the undersea cable for some time now, but it has happened quietly, below the radar," he says.
This year, mobile broadband providers including Sentech and iBurst reduced their tariffs, while also increasing their bandwidth allocation, leading to market speculation that a price war may be on.
Sentech increased its broadband speed to 1Mbps and dropped monthly payments and modem costs, while iBurst added extra data allocations to its monthly packages. As a result, Sentech's 5GB to 10GB offerings are the most cost-effective in the market, Muller says.
Telkom has stated it would not offer any drastic price cuts this year, sparking criticism from Muller, who says the fixed-line operator is happy to keep its monopolistic environment.
Goldstuck disagrees: "It's a myth that Telkom is now the most expensive provider, based on examining very specific packages rather than pricing for the most common packages."
He says Telkom ADSL remains the best value for money in broadband and, had the other networks not brought down prices now, they would look decidedly overpriced when next Telkom drops prices.
Both market commentators say there is still significant room for price cuts for wireless broadband offerings.
"The percentage by which they have brought down costs highlights just how high the costs were to start with," says Goldstuck.
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Wireless broadband gets cheaper
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