iBurst offers low-cost broadband

iBurst has launched a broadband package of a laptop or USB modem and 40 megabits of data at R69 per month, on a 24-month contract.

However, market commentators are divided on whether the offering provides real value for consumers or if it's simply a stunt to get iBurst modems into homes and lock them into long-term contracts.

The promotion, which is valid until the end of August, also offers desktop modem users a similar package for R89 per month and a no-modem month- to-month offering at R49 per month.

"iBurst now possibly offers the most affordable entry-level broadband package in SA," says iBurst CEO, Thami Mtshali.

iBurst marketing manager Callia Doucas says the promotion is aimed at dial-up Internet users and light broadband users. People have a perception that dial-up Internet is cheaper than broadband and this offering will show them that it isn't so, she says.

Users also have the option to top-up their data allocation at rates that apply to iBurst's Play offering, paying R189 for 500MB of out-of-bundle data and R249 for 1GB.

MyADSL founder Rudolph Muller is, however, unimpressed by the new offering, saying it's a marketing attempt to get consumers onto iBurst's network and lock them into data contracts. "It's not a true broadband offering at all and they shouldn't even try to market it as an entry-level package."

Muller says the 40MB data allocation "is a joke".

"It's hardly any service at all; it's just a way to get a modem into people's homes," he says.

World Wide Worx MD Arthur Goldstuck disagrees with Muller about the value the new offering provides consumers and its possible impact on improving broadband penetration levels in SA.

He says iBurst's offering is the first broadband offering that addresses one of the fundamental flaws in Internet access in SA: the pricing strategies that ensure stagnation in the growth of the user base. The iBurst offering is the kind that is essential if SA is to grow its overall base of Internet users, he says.

Research data from the Internet Access in SA 2007 survey, which is currently being completed by World Wide Worx, shows there will be 3.75 million users in SA by the end of this year, barely up from 3.7 million at the end of 2006.

This is despite the fact that a million South Africans already have the use of computers, but no Internet access. These people represent the first opportunity for expanding the Internet user base, but price is clearly the obstacle, Goldstuck says. "This kind of pricing makes access a lot more viable to this market."

Goldstuck adds that MTN does have an equivalent package from a pricing point of view. MTN's My75 package includes a data card and 37.5MB of data for R75 per month. However, the throughput one experiences on the mobile broadband offerings is not good enough to qualify as an always-on broadband connection, he says.