Afrihost throws its hat into the ring
The company that in many respects started SA’s broadband price war, Afrihost, says it will introduce low-cost and uncapped broadband packages from early next week.
And its prices will, at the very least, match MWeb’s.
Afrihost’s move comes just a day after MWeb, which is owned by media giant Naspers, took SA’s Internet industry by surprise by slashing its broadband prices and introducing what are being seen as SA’s first affordable uncapped broadband products.
“We are absolutely, 100% going to react to this move [of MWeb’s],” says Afrihost CEO Gian Visser.
Visser says Afrihost, which shook up the market in September last year by introducing cut-price (but metered) broadband, will at least match the prices offered by MWeb.
Afrihost had been planning to surprise the market with uncapped solutions, the way MWeb did on Thursday, but it was beaten to the punch, Visser says.
“We expected competition from uncapped providers, but we never expected it to be MWeb.”
In September 2009, Afrihost cut the price of metered broadband to R29/GB, using its marketing budget to subsidise the product. It now makes money on this offering, thanks to collapsing international bandwidth prices.
Then, earlier this year, it began offering regular top-up specials for half that price. And, more recently, it began selling high-usage packages where the cost of broadband has fallen to below R10/GB. To put that in perspective, the average selling price of fixed-line bandwidth a year ago was about R70/GB.
Though Visser won’t disclose how many broadband customers Afrihost has signed up, he says the company has seen a greater than 10 000% increase in customers in the past six months.
“We are now Internet Solutions’ biggest reseller of bandwidth, eclipsing many of their old stalwarts. We also estimate that we are one of the top four in the country in terms of ADSL volume per month.”
Uncapped packages will quickly become the new norm in the SA Internet industry, he says, but adds that metered options will still be popular for people requiring unshaped broadband at the highest download speeds possible.
He says that although MWeb is a serious competitor, with financial muscle behind it in the form of Naspers, Afrihost can maintain and grow its market share by offering superior service.
“I see this as a David vs Goliath type of scenario, but I truly believe our service is superior to MWeb’s,” he says.
“There will be casualties along the way. But I’m delighted to be a part of this price war, and I’m delighted we were right at the forefront of it as one of the catalysts.” — Duncan McLeod, TechCentral