Our marvelous benefactors at Neotel have finally released a product offering for certain parts of Johannesburg and Pretoria. The product, called NeoConnect Prime, will be officially launched during May and is based on the following product offering
Basically for the “low low” price of R599 a month you get 1000 free Neotel to Neotel calls as well as 50 free Neotel to Neotel SMS’s. Included in this price is a CDMA (more of which I will speak about later) modem for accessing the internet and a 10 gig cap.
I really, really think that this offer sucks.
Where do I start…. Firstly almost six hundred bucks for most people is to much. The simple fact of the matter is that the average South African is being financially abused by the high prices of petrol, food and the cost of having debt. As such they will not be able to afford any luxury such as this cost. Also, most people are happy with the Telkom offering of 384K Telkom with a 1,2 or 3 gig cap. That costs R145 for the ADSL line and another R200 odd for 3 gigs worth of bndwidth. Total price is R345 which certainly isn’t cheap but is a lot more palatable.
On the topic of the internet Neotel offers a wireless CDMA (which is based on cellular technology) modem as your connection device. Wireless internet access is not nearly as fast as cabled internet for applications such as VOIP or online gaming, the kind of uses people need 10 gigs of bandwidth for. I mean ten gigs of bandwidth would be nice but I’ve been using three gigs for ages and the only thing I can’t do is download movies, something I would be only slightly less restricted doing on Neotel.
There’s another issue that seems quite obvious: 1000 minutes from Neotel to Neotel is as useful as giving me a Lamborghini without a petrol tank. These free minutes aren’t going to be useful for a long, long time until Neotel has a significant amount of users to make the 1000 minutes a useful selling point. Interestingly Telkom have a service where you pay R300 per month, get 1000 free minutes and can talk after hours for free.
I think the irony is with Telkom their pricing system makes more sense. The reason for this is that Telkom offers a modular pricing structure which means if you want ADSL you pay extra or for that matter anything is extra but you at least have an option.
The bottom line is that Neotel is still not helping the poor spectrum becoming connected not only in the land line voice arena but also with internet access. At the end of the day the middle and above classes can afford to pay for Telkom. They might not like the prices but they can afford it but Neotel is just going to end up offering less for a higher price. We need places like rural schools to get cheaper internet access and between Neotel and Telkom they have no chance.
At the end of the day Neotel seems to be attracting a very small wealthy segment with a poor product that will probably end up costing more than Telkom considering you still need to pay for calls to Telkom and cellphones.
Frankly I am very disappointed with the product and I’m surprised with Neotel. I assume they will be bringing more packages out in the future but why start on such a low note? Neotel seem as useless as Telkom are. Here’s to the third fixed line operator. If however Neotel feels like hiring me as a consultant I’ll give my services to them at a good price point 
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I agree that if you don’t need the large cap it sucks. But for a 10gig package you can’t beat the value. And Saul, some of us need the extra bandwidth to download uh… um…y’know…stuff.
Well Gangsta, not all of us have problems with an addiction to politics
I agree with you, it is not the best package to start with from Neotel, but surely that will change. Not that I checked the Telkom ADSL prices recently, but shouldn’t you add the R99 line rental fee to the R345 above?
And what you did not mention, is that call cost compared to Telkom is a little cheaper. Not much, but a little.
So if you ignore the free minutes and sms (I agree it’s useless) it is mainly 10GB internet for R600 instead of R450 for 3GB. Add to that the cheaper call rates from Neotel, and it becomes a viable alternative. But obviously only if you are an internet user that spends that amount of money anyway.
If you compare this package from Neotel to some of the mobile broadband solutions, it is even more favorable. I believe this is the actual market they are targeting with their first product. For a 10GB data bundle from Vodacom you will have to pay over R2000. No contest there.
True the product is a bit weak considering current offerings and the expectation of Neotel really shaking things up.
But you should also keep your eye on the product strategy of companies that come out all guns blazing. They rarely end up being the victors, and Cell C is a prime example. They are not the leaders by a long shot, but they do fare well. Could they have been bigger? I certainly think that their strategy wasn’t slick enough. They came out guns blazing and then plateaued. Coming out and introducing your product as a simple competitor first, before introducing your key sales products makes a lot more sense as you already have an established brand, you have a better infrastructure to support your key sales product and you have a bit more liquidity to play with by the time you release your key seller.
The products that will be released in the first three months will be the long lasting products. The items that will form the foundation for the company, much like the Vodacom Weekender package or the Toyota Corolla.
Product strategy is of the utmost importance for these guys and I wouldn’t be so eager to write them off just yet. I’m expecting a real shake up by August or so.
I totally hope you are right HoTsTePPa. I do however want to mention that Cell C are making a loss
BlueGray: If you look at it from that point of view then I suppose you are getting quite good value. I still wonder though who is Neotel really trying to target?
We will have to wait and see… I suppose they can’t really compete with Telkom as a fixed line operator until the local loop have been sorted out. What I really want to see is Neotel selling bandwidth to ISPs and end this Telkom overpriced monopoly on bandwidth.
It will happen. Neotel has access to (the parent companies of Neotel own) the new submarine cables that link Africa to the rest of the world. Telkom will end up leasing access from Neotel in the future. This will definitely lead to interesting pricing strategies from these companies.
The CDMA approach is the only way that Neotel can roll out products without having to spend billions on infrastructure to compete with Telkom, so it was definitely a wise move. CDMA is widely used in the US and in Asia with great success and the introdcution of this technology in SA will open us to a whole new kettle of fish.
Whoa, where to start..
VOX, the company that i work for, has come out with something similar too. A few months back.
It seems that all the SA Data Companies are jumping onto the VOIP bandwagon..
At the end of the day – NEOTEL will rape telkom (as they are on the corporate playing feild atm in major cities of SA). The end. They will deliver what they are promising guys n gals, just give them a little time to make some $.
Chris: I’m worried they won’t make money because of their crap offering!
They will, and are amking bucks boet. They are cremeing the corporate level companies (100 user +) and have laid fiber throughout the CBDs.
In years to come – they plan to roll-out fiber “to the doorstep”. Can you imagine? A fiber connection to the net, from your HOME! *heaven*
Give them time.. telkom have had a few decades to get their infrastructure up. It’s nothing short of a miracle what NEOTEL have accomplished in the time-frame past.
Very true. In fact, their parent companies in India have home based fibre lines, i had one myself while i was there.
Neotel won the tender to redo all government connections, so cash flow is NOT a problem.
These things take time unfortunately, but its like every business, major rollouts never happen overnight unless you are launching the new iPod or the newest XBox.
I have been reading up on everything I can find on these guys, They seem to be doing quite well atm.
Personally I’d join them just to support thier cause. (even if its not cheap, but then telkom has never been cheap so whats the difference?)
Who of you remember the old K-62 chipset that AMD launched Way back in the 90’s? most of them over heated and though they did preform quite well they were not far off the intell prices which made it not really worth buying the overheating cpu’s. add that to the fact that you had to upgrade your mother board aswell then it wasnt a cheap investment. But the ppl that actually went and bought the AMD’s funded thier next generation of CPU’s and now we have a decent competitor towards Intel. Yes the new c2d’s are alot faster than what AMD have to offer, but atleast we arent paying insane ammounts to get hold of them like we would have if there was a monopoly on cpu’s.
What I’m trying to say is, support the cause cause if they end up becomming competition for residential ADSL then atleast well benefit rather than sitting back and loosing anyways.
WOW what a depressing and negative article you wrote. And offcoarse you say that Telkom gets you connected to internet with your choice of capped bandwith for R345. How the crap are going to connect to the internet without a telefone line bro! You forgot to mention that factor in havent you!. So lets say you take Telkoms lowest package of R120 then you end up with R470. Erm not far off from the Neotel’s offering of R500, and they have cheaper options also.
I am not a fanboy of any company but get the facts straight mate.
Oh and if you are waiting on Telkom to install your phone line like me for the last 4months, then Neotel looks the better company!
Neotel are charging major overhead on their contracts. In other words, for a 10GB account most guys are actually only seeing about 3GB of this, and are being charged for the other 7GB. Crazy, I know.
Interesting comments, to be honest, my theory is to support Neotel. Just because it isn’t Telkom. I’m not sure they can be compared to Cell C. They rent their towers, as previously mentioned give them time. If I were Telkom I’d seriously be stressing. Their down time is too long. The lines can be stolen, more downtime. Let’s not talk about speed either, I just hope they get their ducks in a row, unlike iBurst. Every time i use an iBurst service it seems to get slower. Somehow though, we may need to remove the bottle-necks. Possibly sat links to the outside instead of sub cables may prove to be a plausable solution.
Even being a Telkom client for the last 10 odd years, they seem to have jacked up their services considerably since the talk of another competitor. It’ll be exciting to see the power strugle. I reckon the only people that will benefit will be us, the consumers. But let’s wait and see.
As a recently signed up neotel user, my opinion is that neotel sucks. we run a small business and
decided to give neotel a shot as soon as we had reception. after a week of speaking to neotel’s (useless)
consultants, they assured me the best bet would be to go for their neoconnect prime unlimited account.
after a week of waiting for the device and cancelling our subscription to mweb, the phone finally arrives
only to find out that the phones drivers arent compatible with our server as its running windows server
2003 for small businesses and its only compatible with xp and vista.. this after i explicitly explained
to the consultants our set up. also i installed it on one of our workstations to try it out for the heck
of it, ran a speed test and got “304 kb/s” on the download and a mere “16 kb/s” on the upload, and this
after they said our area had “excellent” reception.
I must say that I have so far been very disappointed with Neotel, and have lost most (if not all) hopes of them being our solution to the horrors of Telkom.
My neighbour told me that he will apply for a Neotel subscription, as they will apparently offer coverage in our neck of the woods as of next months or so. Now I live in a valley surrounded by hills, where we barely get cellphone coverage and cannot even receive terrestrial TV most of the time… so I decided that it would be good to find out if it will actually work in that little Bermuda triangle that we call home.
So I went to the Neotel website, as suggested in their ads, and found no useful consumer information at all – just a bit of sales babble about how they offer “true convergence” and “hassle-free communications with no complex installation requirements”. But no really useful, real-world information from a consumer standpoint. Oh, and there’s a picture of a phone with an antenna on it.
Then I used the contact form on the website to ask if they have coverage in my neck of the woods and if not, when they expect to get there. I received no response. So I did it a second time. Again no response. Eventually I called them, told them where I’m living (a hole in the ground that few people have heard of!) and asked them if they expect to provide coverage there in the foreseeable future. The lady who answered my call at the call centre immediately told me (without asking for my postal code or even my general whereabouts!) that yes, they definitely will be offering service there, but she had no idea when, so I should please feel free to call back in six months. End of story.
Somehow I don’t think that Neotel is going to save South Africa from telecommunications hell…
“ran a speed test and got “304 kb/s” on the download and a mere “16 kb/s” on the upload, and this
after they said our area had “excellent” reception.”
Exact same thing has happened with me. I have been getting download speeds of 120 kbps, 153 kbps, 73 kbps, tec. At times I frequently have to turn of my router every few minutes to get back on the internet. I called them a month ago and they said they couldn’t help but would have an engineer contact me. I finally wrote a letter to their head of customer service yesterday. There’s no way I’m getting anywhere near 10GB at these speeds!
I’m a network administrator for small network wich operates under server 2003 environment, i’m currently using neotel to connect to my notebook. I was planning to use neotel for internet connection on our small server but hey only to find out that it support only xp and vista. Having windows 7 coming soon, i wounder whats going to happen. Will neotel support windows 7??? i wounder, i mean server 2003 have been around for some time, but hey it’s usb drivers don’t work with server machine.
with regards to win7, i am currently using windows 7 on my home pc, and i have neotel connected 100%
because windows 7 has a vista backbone, the vista drivers will work on windows7.
wrt neotell vs telkom. lets be frank about this, telkom has been around for how long, and it still takes a decade to get anything done from them. yet we are moaning about neotell having a few hiccups about service etc. agreed service is the main selling point of any product. and i do agree that the customer support operates are as bright as a doorknob. But honestly, i havent had the real need to contact customer service yet… holding thumbs i never need to.
i think in terms of time, neotel have done pretty well. they have expanded to our major cities pretty fast. and have a rising client base. if they can drop thier latencies and up thier customer service then telkom have a real problem on thier hands.
over and out…