The Way Business Is Moving published by
Issue Date: January 2009

Cost effective data for the masses

January 2009

By offering SMBs the same grade of connectivity many of their larger counterparts benefit from, ADSL has undoubtedly been one of the catalysts for business development in South Africa over the past five years.

Those benefits aside however, the manner in which ADSL has been implemented in South Africa and more specifically the capacity limiting and high costs of data per megabyte are considered serious drawbacks.
Thankfully however these drawbacks have been a symptom of South Africa’s monopolistic telco environment.
And I use the word thankfully for a reason – the second network operator, Neotel has been building its network out for the past two years now and seems ready to deliver.
Addressing the most pressing needs in the market first, the company started out about a year ago, by providing fibre-grade access to many of South Africa’s larger corporates, who were in turn delighted to for the first time ever be granted access to high-bandwidth data connectivity.
Next in line for relief were home users and SMBs who have in the past year seen a voice and data-focused EVDO handset and premicell-like voice product being launched under the banners of NeoConnect and NeoFlex respectively.
And now Neotel is targeting SMBs data needs.
Neotel has begun priming a data solution that will feature a near uncapped, fixed wireless Internet connectivity at speeds of 3,1 Mbps downstream and 1,8 Mbps upstream, aptly named NeoFlex Data.
Gregory Kee, Head of Product Strategy at Neotel says that although the company will be setting a capacity limit to the solution, it is unlikely that users will reach that limit through fair use.
The company has not disclosed yet the figure for its cap, but Kee says it will be above the 10 GB mark and users will be able to buy additional capacity once that limit has been reached, at 8c per MB.
That is a massive contrast the anywhere between the R2 and R1 per MB casual data rate users are currently subjected to by the cellular networks and other wireless providers.
Neotel has not been public about what it is likely to charge for the new solution, but speculation in the market indicates that it will try to position the product at under R1000 per month.
While the device is capable of bandwidth that rivals Telkom’s current top-end DSL offering, Kee says users must be reasonable in terms of their expectations of performance.
Even though the solution is based on CDMA Revision A and as such delivers 3,1 Mbps/1,8 Mbps performance, he confirms that users can expect performance levels of 450-900 Kbps downstream and 300-700 kbps upstream.
The new technology does however bring the network latency right down.
Where Neotel Prime – the telco’s standalone, consumer focused converged voice and data solution delivers a latency of between 200 and 400 ms to sites in the west coast of the US, Kee says that the new SMB data solution will improve that by between four and five times.
In testing, Net.Work found the device capable of ping times of between 200 and 300 ms to
Kee says that this product is designed to allow Neteol to do the same thing with its SMB data solution as it has with its SMB voice solution.
The company’s voice solutions offer true per second billing and cheaper calling rates to Telkom lines than Telkom does itself. The data product is destined to be as aggressive in its approach to the market.
The really exciting news is that a converged product on the NeoFLex range is just around the corner. During the course of next Kee says the telco plans to bring NeoFlex Voice and NeoFlex Data together in an ‘office in a box’ solution that provides SMBs with everything they need from a communications perspective.
He however was not able to shed any light on timeframes, cost and performance levels.
Neotel’s approach the market is smart, since its solutions are heavily tailored towards the catalysts for economic growth in the country, namely the SMEs.
What is really encouraging however is the fact that its solutions set the stage for a very rosy telco environment over the coming 12 to 24 months. The legislation looks set to allow players such as Altech, Internet Solutions and M-Web to provision their own infrastructure.
We are on the verge of a healthy price and service war and the way I see it, there is one sure fire winner – the consumer.
Competition is a great catalyst for value - and we are seeing the first evidence of this in these aggressive new offerings from Neotel. With legislation due to open the market up substantially over the coming months, we are bound to see more players following suit.

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