MWEB LOOKS TO BUILD ITS AFRICAN INTERNET BUSINESS IN SUSTAINABLE MARKETS

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After the setback of ABSA’s short-lived free internet offer in South Africa, it seemed like MWEB had taken itself out of commission as a continental internet player. But it has been quietly building its business in Nigeria since last year and this week sees the launch of its new always-on satellite internet product aimed at corporates and SMEs.

Speaking at the product launch function held at the Lagoon restaurant in Lagos, M-Web Nigeria’s General Manager, Jannie Van Rhyn, explained that the new product is in line with M-Web Nigeria’s commitment to offer quality products and to continuously introduce new and innovative products. The new MWEB Satellite Internet product is targeted at the SOHO, SME (small medium size enterprises), oil companies, banks, larger corporates and multinationals. MWEB Nigeria has also launched Satellite Internet products for the smaller cyber cafés.

MWEB sees itself competing on quality of bandwidth and after-sales service. On bandwidth, it has signed a Gold Class service agreement with Intelsat and this ensures 99.97% Internet availability for MWEB customers. MWEB Satellite Internet will operate off the Intelsat 907 satellite with a KU-Band footprint. For nearly four decades Intelsat has been a global satellite communications leader with Satellite transponder reliability of 99.997% since 1985. On quality of service, MWEB also has its own installation team allowing it to control the quality of work given to new customers.

So what does the Nigerian operation mean for the company’s African business strategy? MWEB is understandably coy about its exact plans for expansion. However it’s clear from its current operations that it wants to enter larger markets and become the dominant player. For example in Zimbabwe (where it has around 10,000 subscribers) and Namibia it has built itself this position. It is understood to be looking for three things in potential markets: scale in the overall economy; market potential and an operator-friendly regulatory environment.

Its strength has been its understanding of the African consumer market. Its parent Naspers also owns the satellite TV operation Multi-Choice and it is therefore able to follow the footprint of these existing subscribers when it goes into new internet markets.

MWEB Nigeria’s Satellite Internet products are split into various service classes, which ensures quality of service per service class. The main differentiation of these service classes is based on the maximum number of computers connected. Some of the benefits and product offerings include consistent quality of service, excellent customer service, IP acceleration software, various email solutions, 24x7 helpdesk with the option of onsite support, hosting directly on the European Internet backbone and Web/Portal development amongst others.

For all other users, in price terms it offers a range of price bands from N4500 a month for an off-peak service 64k download service to N7500 for a premium service. At present it is only operating out of Lagos. There is currently a plethora of ISPs, both in Lagos and regionally, which will make it hard for MWEB to become a dominant player in the short to medium term. There are no significant large players and more operators are entering the market. As in South Africa, Tier 1 and Tier 2 players may emerge before too long.

As elsewhere, long-term there will be a consolidation in the market after the existing players realise that being an ISP is not the road to fast money. However MWEB is definitely not in the game for the short-term. And if there is a consolidation at a country level, it can only be a matter of time before there are more continental players acquiring companies as the market stabilises.