WiFi loses out to 3G/HSDPA? Not Quite.

In a recent article on the popular South African myadsl.co.za website, WiFi loses out to 3G/HSDPA, the author states that “Commercial WiFi hotspots face a dim future in South Africa unless prices are reduced to compete with 3G/HSDPA rates.” In this post we comment on this article.

The article is based on research done by World Wide Worx and we believe this research has significant shortcomings. In addition, the article fails to point out the types of users commercial hotspots in hotels may be serving, that is tourists who may only be in a location for a limited time period. When it comes to corporate use of commercial hotspots, it is no doubt correct that South African corporates are increasingly using 3G / HSDPA rather than hotspots, with this use-case however, the cited research is comparing apples with pears.

To discuss the first point, there are now many hotspots available in South Africa that charge very reasonable rates, on a per Megabyte basis. As an example, at a recent hotel where we installed a hotspot we charge 60c per Megabyte on a 4Mbps ADSL connection, with a minimum purchase amount of R30 (i.e. 50MB), no contract, subscriptions, installation or activation fees are required – it’s conveniently prepaid and a very good deal. Since billing is on a per Megabyte basis

users can surf at their leisure. Also, there is no need to go out and buy an expensive (in the region of R2000 last time we checked) 3G / HSDPA modem or sign a 24 month contract.

About the article failing to point out the types of users hotspots may be targeting, this is an important point. If you are in the country for a limited time period, that is days to months, it is simply much more convenient to use a hotspot. It might not be cheaper if time billing is used, and to give credit where credit is due, the article does correctly point out that a large portion of hotspots in South Africa charge exorbitant rates. RedButton hotspots certainly do not fall into this category. We wrote a case study on the costs of hotspots in South Africa a couple of months ago, naturally the article assumes the user is at a RedButton hotspot.

Our final comment is on the cited research comparing corporate usage of commercial WiFi hotspots with that of 3G / HSDPA. The comparison is irrelevant for the simple reason that each technology serves a different purpose, WiFi is designed for local area networks, 3G is a technology designed for wide area networks. Regardless of pricing it is only natural that South African corporates with sales reps will use 3G because they need to be connected in most conceivable locations, 3G largely fulfills this requirement. When it comes to providing well priced, quality Internet in a local area for temporary overseas visitors, our commercial hotspots do and will continue to beat 3G hands down.

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