Vodacom Halves Its Broadband Rates in South Africa

Internet

Vodacom Business looked to steal a march on Internet provider rivals last week by halving its rates for broadband connectivity, a cut made possible by last year's Seacom fibreoptic cable launch.

Managing executive Ermano Quartero said business clients would now pay on average half the previous rate for their broadband use, although some large companies could save even more. He expected most customers to increase their bandwidth allowances in response to the cut, effective from this month.

The price reduction had been enabled by "the increasing competition between undersea cable providers, which in turn creates a sustainable competitive international bandwidth market in SA".

The bulk of SA's international voice and data traffic had previously been routed via the SAT3 cable, a closed-access pathway controlled by Telkom , which had been criticised for keeping prices artificially high. It cut these wholesale charges in response to the Seacom launch - but the effect on retail rates has been limited.

Quartero denied that the reduction was a short-term promotional tactic. "This cut is absolutely permanent: the price can never come up, because the pressures are just too extreme." Vodacom Business could halve its broadband rates again in July, when the West African Cable System came into operation.

Business Day