Uncapped ADSL price war

Numerous Internet Service Providers (ISPs) have slashed the price of their uncapped ADSL products to remain competitive in a fast-changing fixed-broadband market.

Telkom reduced its wholesale ADSL rates by 30% in April 2012, and although consumers expected some price reductions, very few people could have predicted what was to follow.

Within days of the Telkom wholesale price cuts, ADSL retail prices started to fall. These price cuts have not stopped, and ISPs continue to drive down prices to try to gain market share in the highly-competitive broadband arena.

The latest price cuts came from Afrihost and Axxess, which slashed their 10Mbps uncapped ADSL accounts to R797 and R496, respectively.

These price cuts followed MWEB’s announcement in July that it has slashed the price of its 10Mbps uncapped ADSL product from the previous R1,999 per month, to R999 per month.

It is not only high-end uncapped prices which have plummeted. MWEB was once again the driving force behind the price cuts when it reduced the price of its 384kbps and 1Mbps uncapped ADSL accounts to R199 per month (for both speeds) in April.

After MWEB’s price reduction, numerous ISPs followed suit, and entry-level uncapped ADSL rates have now dropped to below R100 per month in some cases.

If one considers that consumers paid between R50 and R70 per GB only a few years ago (and that uncapped ADSL accounts were priced in thousands of Rands rather than hundreds of Rands), it is a clear sign what benefits competition and suitable regulatory intervention (where ICASA forced Telkom to cut wholesale ADSL prices) can have on retail prices.

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Uncapped ADSL price war