In September, Afrihost announced that all data used between midnight and 18:00 each day on its capped ADSL accounts will be free. The free ADSL data for 18 hours a day means that an Afrihost ADSL client now pays less than 3c per GB – a price never seen before in South Africa. Speaking at the 2016 MyBroadband Conference, Visser admitted that it becomes challenging to make money within the ADSL market with the continued decline of ADSL data prices.
“If you look at seven years ago, the average price per gig was between R70 and R80. You now pay R1 per GB during peak times [18:00 and 00:00], and for 18 hours a day you get free data,” he said. Visser explained how one of Afrihost’s clients, who subscribes to a 20GB capped package for R29 per month, is getting data for cheaper than ever before.
This user consumes over 1TB (1,024GB) of data per month, which translates into an effective price of less than 3c per GB.
“The pricing has gone from R70 or R80 per GB to 3c per GB over the last few years,” said Visser.
Afrihost’s directors bought the company back from MTN because they wanted the ability to make decisions and develop and launch products within a matter of days. “At heart, we are dreamers and risk-taking entrepreneurs,” Afrihost CEO Gian Visser said at the 2016 MyBroadband Conference. “We like pushing the edges and leaping off cliffs and that, in all honestly, often doesn’t go well with big, structured corporates.”
Since buying the company back from MTN, the main difference has been the speed of decision making. “For example, for our R1 for 250MB mobile data promotion: on Thursday night we had the idea and the directors were talking about it,” said Visser. The next morning, they spoke to their development and branding teams, and by the middle of the following week, the deal was live and Afrihost was selling the product.
“There’s a saying we use a lot at Afrihost: If you’re gonna be a cowboy, you’ve gotta know how to ride,” said Visser. “We are cowboys, there’s no questions about it, and we’re planning to do a lot riding in the next few years.”
The MTN-Afrihost deal
“Based on an agreement concluded by the Group to sell its 50.02% investment in Afrihost for [R325] million, a goodwill impairment loss of R202 million was recognised at 30 June 2016,” said MTN.
MTN said this goodwill impairment loss was “recognised on the remeasurement of the assets to fair value less cost to sell in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations”.
Internet pioneer Mike Lawrie has built an internal DSL network at the retirement centre where he lives, which offers unlimited Internet access at R40 per month. Lawrie is credited as one of the people who brought the Internet to South Africa. In 1988, Lawrie led the informal team at Rhodes University which established the first Internet network in South Africa.
His passion for networking and the Internet never subsided, and he has found a way to offer affordable broadband access in his area. Speaking at the 2016 MyBroadband Conference, he said one often hears about expensive ADSL and fibre, but highlighted that there are affordable solutions. Lawrie explained that he put in an internal ADSL network at the retirement village where he lives in Pretoria.
The network has its own DSLAM, and uses the copper pairs to each of the houses in the area – with an ADSL router in each house – to connect clients to the network. For backhaul capacity, Lawrie uses a single 40Mbps VDSL line with a 400GB capped Afrihost account – which now offers unlimited usage between 00:00 and 18:00 daily. “Our users in the retirement village do not pay more than R40 per month for unlimited usage,” said Lawrie.
“It is dirt cheap if you do it properly.” “I get download speeds of 20Mbps for R40 per month. In the last month, my wife and I clocked up 58GB,” he said.