Why I’m cancelling my Telkom ADSL

With better value available on mobile broadband, the numbers just don’t add up.

JOHANNESBURG – It’s madness. The numbers don’t add up. Unless you’re a household with serious bandwidth needs, ADSL just doesn’t make financial sense.

Let’s take the kind-of-fast-enough-and-passes-for-broadband 1Mbps ADSL service (which I have at home). Telkom’s (JSE:TKG) line rental charge is R299 per month. The top 4Mbps/10Mbps is R425 (its not worth including the 384kbps service in this comparison because its pitifully slow).

There is some confusion in the marketplace at the moment, given that Telkom is busy upgrading its line speeds: the (up to) 384Kbps service will become (up to) 1Mbps and the (up to) 1Mbps service will become (up to) 2Mbps.

Then add uncapped data at R199 per month (never mind that certain service providers are already charging customers the new 2Mbps price of R369 before Telkom upgrades line speeds).

And there’s compulsory landline rental from Telkom (at R148.37 per month) which makes the comparison with alternatives even less flattering.

In total, a fairly basic 1Mbps service sets you back around R650 a month. And with speed of only 1Mbps, you’ll hardly be enjoying your browsing experience. Once the upgrades happen, your 2Mbps uncapped service will cost over R800, due to that higher monthly charge from your ISP.

Upgrade to a 4Mbps ADSL service, and you’re spending somewhere between R1 000 and R1 100 per month!

Thing is, there’s just much better value in the market. Cell C, Neotel and ironically enough Telkom’s mobile operator 8.ta, all offer far cheaper ways to have decent internet access at home.

I’m switching to 8.ta’s “60GIG + 60GIG” promo this week. For a one-off payment of R1 800, you get 60GB of anytime mobile data to use over 12 months. There’s an additional 60GB of “night surfer” data for use between 11pm and 5am (which is a huge bonus). It’s comfortably the best offer in the market at the moment, more so because you aren’t rationed with 5GB per month over the year.

There’s a catch (there always is), in that you have to use 8.ta’s network and can’t roam on MTN (JSE:MTN), so you have to double-check (and triple-check!) your coverage.

The one thing ADSL has going for it, the convenience of a fairly reliable Wi-Fi connection in your house, is easy to replicate. Many new ADSL modems (including the free ones you get from Telkom when installing ADSL) have a USB port for a 3G modem to use as “failover”. Quickly changing some settings on the router means you can use 3G as the primary connection.

This means you can still enjoy Wi-Fi coverage through your home without the hassle of needing to plug in and connect on a 3G dongle every time you want to go online. It also means multiple users and multiple devices can use that same connection.

The numbers on mobile broadband make so much more sense. Especially for a user like me who uses somewhere between 3GB and 5GB per month. Even accounting for the fact that I get 3GB of free “ADSL Rewards” data from FNB Connect per month, I’ll still be saving.

In a worst-case, assuming use of 10GB per month, after depleting the 8.ta offer over six months you’ll still save nearly R2 000. By my calculations (which assume I won’t exhaust the 60GB in the ten-odd months remaining on my lease) I’ll save over R3 200 by July 2013. And I’m not paying for my bandwidth… the saving would be over R5000 in ten months if I was!

Neotel has an even more attractive offer, which gives you 24GB of data over 12 months for R799, which is astonishing value for users who don’t use much bandwidth (not more than 2GB a month).

Even Cell C’s 2GB offer (R1 299 one-off payment for 2GB of data per month for a year) is better value than ADSL. The drawback here is you’re “rationed” to the 2GB per month. Vodacom, by comparison, has a “Pay Once” promotion, which costs R1 999 for 2GB of data per month for 12 months.

Service

Cost per month

Telkom ADSL 1Mbps + uncapped

R650

Telkom ADSL 1Mbps + 3GB capped

R520

8.ta 60 GIG + 60 GIG promo

R150 (effective cost per month)

Cell C 2GB

R108

Neotel NeoGo data card 24GB

R66 (effective cost per month)

There’s an important caveat: Don’t sign up for a 24-month mobile broadband data contract if you can help it. The R99 or R149 per month offers sound appealing, but prices continue to trend downward. You really don’t want to be stuck effectively overpaying a year from now when you could be getting twice as much bandwidth for your money.

Also, the benefit of the prepaid (one-off) mobile broadband offers is that once you’ve used up your data, you don’t automatically get billed prohibitive out-of-bundle rates. You have the choice on whether to top up or not, controlling your usage.

However, that’s not to say mobile broadband is the solution for everyone. ADSL has its place. If you use more than 10GB a month, if you’re a serious gamer who needs low latency for online play, if you spend your life on Skype, of course high-speed ADSL is better.

But be prepared to pay more than you should be, especially if you’re mainly using your ADSL for browsing and e-mail.

*Hilton Tarrant contributes to “Broadband”, a column on Moneyweb covering the ICT sector in South Africa.

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