So, You Think RedButton Is Expensive?

Article by: Rike Roper & Jalal Ghiassi-Razavi

Have you ever thought to yourself that RedButton Internet is more expensive than some of the other offerings available in the market? Do you think that there are other more cost effective, convenient and affordable ways of accessing the world wide web? Does it leave you feeling disgruntled that you are not getting the most value for your money?

What if we were to tell you that our service offering gave you much more than you had bargained for. More than other service offerings, and at a better price with additional convenience and value! South Africa is very different to the rest of the world in that we are limited in the number of core infrastructure solutions that we can make use of to access the Internet. As an example, Internet Service Providers (ISP’s) still bill in megabytes rather than in time. This is very different to what is found overseas.

We are slowly getting out of the Telkom monopoly but are still left with very little choice in South Africa as to how to access the Internet. It is clear that Internet is no longer a nice to have but a necessity and RedButton looks to ensure that this need is fulfilled.

Here are a couple of reasons why we are not as expensive as you think:

Consider the following factors, with RedButton:

  • There is no need to purchase any special equipment such as modems, routers or 3G cards
  • There is no need to go through a complex process in order to set-up an account
  • There is no need to pay a deposit to use the system
  • There is no need to sign long term contracts (12/24 months)
  • There is no need to cancel any accounts once finished using the service
  • There are no reconnection fees
  • There is no need to manage/carefully monitor your own wireless account
  • There is no need to go through any personal credit checks
  • There is no need to pay any monthly account fees or charges
  • Credits do not expire (credit lasts 12 months) – credits roll over each month
  • Credits can be used at any of our hotspot venues
  • You have the flexibility to decide when and where you wish to surf
  • You have easy mechanisms to purchase credit (credit card or vouchers)
  • You have access to unlimited, unshaped bandwidth

Cost

Comparison Example

Lets look at an example. Compare the cost of using a RedButton hotspot (A) to the cost of getting your own home DSL account through Telkom (B):

(A) RedButton WiFi

(4 Mbps line)

(B) Telkom Home ADSL

(384 Kbps line)

Telephone line rental R 0.00 R 124.00
ADSL service rental R 0.00 R 152.00
Cost / GB of surfing R 300.00

Note: billed on a per mb basis

R 70.00

Note: billed on a per GB basis

Cost of Equipment R 0.00 R 40.00

(Modem cost split over a year – R 500.00 modem cost)

Total cost for 1 GB R 300.00 R 390.00

As you can see in the table above, you would be able to surf over 1 GB of data at a RedButton hotspot before you cover the cost of the Telkom line rental and equipment. Never mind the fact that the RedButton credit does not expire. Even more importantly, with your own home Telkom connection, you are required to pay the monthly line rental fees regardless of whether or not you use the service. The true value of RedButton’s service should now become more apparent. Let us investigate further…

Breakeven Analysis:

In order to show you what sort of value you receive using RedButton Internet we have put together a table highlighting the breakeven points at which it is equally cost effective to use either RedButton or to get your own home ADSL solution. Any usage less than the values in the table means that it would be beneficial to use RedButton instead of the alternative.

RedButton vs Telkom Breakeven Analysis

RB Residential User

(30c/mb)

RB Commercial User

(60c/mb)

Telkom ADSL

- 384Kbps

1200 MB 510 MB

Telkom ADSL

– 512 Kbps

1950 MB 850 MB

Telkom ADSL

– 4 Mbps

2350 MB 1020 MB

Take for example the service offered on a RedButton hotspot that operates at 30c/mb and compare this to using a Telkom 4Mbps ADSL line. You would be able to use up to 2,350mb before it becomes worthwhile for you to get your own home ADSL line, any less usage and RedButton would be cheaper. Never mind the fact that regardless of usage you will pay monthly fees for line and ADSL rental. It is important to note that this calculation negates additional convenience factors such as non expiring credits and the ability to roam at RedButton hotspots.

ISP’s with ridiculously low per GB charges

Even if you find an ISP that charges ridiculously low rates for bandwidth, say R35/GB, you still end up paying more per GB due to the fact that you have monthly line and ADSL rental costs to cover. See the graph below for an illustration of this.

The fact of the matter is that for your average user, RedButton is far more cost effective (and valuable) than setting up a home DSL account. Only those users who on average use high data volumes (greater than 3 GB per month) will find value in going on their own.

What about other technologies?

Enough about Telkom, consider the cost of using Neotel, iBurst or even mobile technology solutions such as 3G or Edge. With most of these services you are required to sign up for a 2 year contract in order to benefit from reasonable bandwidth rates. If you don’t wish to sign a contract then you will suffer the consequences and have to pay for your bandwidth at higher prices. Never mind the initial cost (thousands of Rands) that you are required to spend to get the equipment necessary to access these networks.

Example of cost:
Prepaid 3G would cost you R2,000 for 1GB of usage – How scary is that!

How do we do it?

RedButton utilises economies of scale to provide you with value added services that are not only convenient, high quality and affordable but second to none. What does this mean? We basically split the cost of the line across a number of different users, therefore making it possible for you to access the net at a fraction of the price of what it would normally cost you.

  • RedButton manages all of the long term contracts with suppliers
  • RedButton manages and handles any reconnection fees
  • RedButton buys all the equipment necessary to get the system running
  • RedButton pays the required deposits to activate the systems
  • RedButton ensures that the service is up and running to the highest quality and speed
  • RedButton ensures speed of Internet by linking multiple ADSL lines together

All you need to do is simply connect to the system and surf!

We use the finest quality backbone infrastructure, billing and networking solutions to bring you everything that you require to access the world wide web. When you consider all of the benefits and factors of using RedButton and quantify the value that you get by using our service, it is clear that we are a cost effective alternative to accessing the Internet.

QUALITY & CONVENIENCE – our two pillars of success!
Twitter Digg Delicious Stumbleupon Technorati Facebook Email

26 Responses to “So, You Think RedButton Is Expensive?”

  1. I recently arrived in CT. Was using prepaid vouchers from Dotcom – they offer 100MB for R30; and strangely seem to last a lot longer. However, tonight their internet connection failed. I am sure you win against Telkom, but am still comparing with Dotcom. Another thing against them is that their vouchers expire – very inconvenient for those of us who are overseas for periods.

    • ITS SSSOO EXPENSIVE
      Its very very bad!
      I want FREE wlan!!!!!

      • Unfortunately it is. Trust us, if giving you FREE anything in this country was possible, we would surely have done this by now. Please let us know where you are surfing? Perhaps a free voucher could ease your frustration. Happy Surfing!

  2. Grigory Telepov Reply 25. Jan, 2011 at 19:31

    It’s terrible! In my homeland, Russia, I have unlimited 20MBytes leased line for 500 roubles (approx. 110 rand) per month.

  3. Red Button is stealing my money, this is what I think !!!

    • Hi Lord Annabi,

      Please would provide us details regarding your comment? I.e. Your username, Which venue, what you purchased? I will gladly clarify any misunderstanding or if we are at fault we will surely reimburse your credit.

      Regards,

  4. Hi admin,

    Your article above holds merit, in terms of someone who wishes to imply check some mail every so-often, and maybe do some banking and access a few simple websites or such. Thus, someone using between 1GB and 3GB of data.

    Yet, you have to admit, at the current rates (between R9.00 and R20.00 per Gig) the R300.00 per Gig that Red Button is charging IS not extremely cheap.

    The disappointing thing is, that recently, in my blog on ADSL vs 3G and Wifi & LAN I actually advised folks to RATHER use a wifi hotspot rather than 3G, since the hotspots are normally cheaper. This article of yours makes me wonder if I didn’t give the folks the wrong advice!

    See http://www.blog.riaaneloff.co.za and view the articles on LAN, WiFi, ADSL or 3G. There I explicitly underlined how that hotspots (specifically in coffee shops) are normally less expensive than 3G.

    Again, I must reiterate: yes, comparing a user who ONLY uses 1 to 2 Gig of data in a month, sure, Red Button is most likely the better option in terms of value, BUT, THAT’S ONLY FOR THAT FIRST 1 or 2 Gig!

    In today’s use, WHO still only uses 1 to 2 Gig of data!?

    I use between 80GB and 200GB a month!!! (Yes, given, I AM a heavy user). But, still, even the “light” users, such as individuals or families who don’t HOG the internet like me, use closer to between 5GB and 10GB.

    Yet, let’s do this: I’ll go to my Facebook page (www.facebook.com/praat.afrikaans) which has about 54000 Afrikaans users (most of them South African, about 15% outside SA), and I’ll post question relating to banwidth usage, and let’s see what their responses are. Then, on http://www.hit-any-key.co.za – my computer support site, I’ll post some results and further advice on the blog/WIKI there about usage.

    I really like using Red Button at coffee shops, it’s quite handy, and, to be honest, I’ve been too lazy myself to actually find out what offerings my ISP have relating to the whole hotspot thing, BUT, I still have to admit: In terms of general use, my feeling is that it’s honestly NOT inexpensive, only for the ultra-light user (1 to 2 Gigs a month).

    On the other hand, if you forget about the exact cost issue, and simply punt the convenience of the service (as you do above), and the fact that you have wide availability and coverage, then, I still think the service holds its own based simply on that. After all is said and done, it is very easy, comfortable and convenient. I would like to see the price drop, and be more in line with ISPs, but how viable that will be for Red Button, I cannot say, of course.

    Cheers

    • Hi Riaan,

      Great article, really empowering your readers.

      You have to understand that our main target market is the Hospitality/ F&B industry. We do not supply hotspots for personal use, that is, home use. Therefore, the 1GB – 3GB user is exactly the consumer we target. These are your movers (students, foreigners, executives and people who are constantly on the go) who need easy to use, convenient Internet at coffee shops, restaurants, guest houses, or whichever venue they find themselves.

      The other fact is that coffee shops, restaurants etc cannot have customers sitting at their venues for long periods this obviously is not good for business. Instead its a value added service that attracts customers to their venues for the primary products on offer (food and beverage). According to research we noticed that the average coffee shop/restaurant user uses between 50MB – 200MB daily. This amount is sufficient for the updating social networks, making use of IP based video streaming service (average video size is 12MB, 3-6min long) and to check/send emails. So to answer your question: “In today’s use, WHO still only uses 1 to 2 Gig of data!?” Many people/movers still use these amounts. Another factor that needs to be considered is the out of bundle rates after using you

      The current rates between R9.00 and R20.00/GB is great news for South Africa but the underlying fact is that you would have to spend quite a large some to have access to this special price. In other words to qualify to pay these amounts you would have to purchase at least 30GB’s (I , in most cases, of data equating to R 1000.00+ incl. line rental. So, personally I feel you were spot on with your advise. It is significantly cheaper than having to purchase the quite expensive 3G dongles (12/24 month contracts) and having to pay high out of bundle rates. With a Hotspot, very important to remember, you purchase credit via credit card or voucher therefore: NO contracts and NO expiring credits – NO string attached. Another factor that needs to be considered is the out of bundle rates after using your allocated amounts, on mobile networks it could reach up to R 2.00/MB! Outrageous!

      Also to note is that it will always be cheaper for a mega home user (20GB+) to get their own solution, with Uncapped and the very inexpensive capped solutions available.

      The good news from our side is that prices are only going to get cheaper and we certainly will pass on this cost.

  5. Hi Admin, thanks for the reply and the compliment. Much appreciated.

    What you’re saying makes sense. And, after reading this article, I do believe that I did probably give the best advice to my readers, in terms of rather using hotspots where possible, instead of 3G. And, yes, you’re quite right. The out-of-bundles are ludicrous.

    In terms of your target market, I understand what you’re saying, and I do agree. It makes sense for those users. I am quite surprised to find that there is such a large market, and obviously have to bow to your superior market research. Oh, I’m not being sarcastic, I’m quite serious. I am simply a blogger with some experience and expertise, and some feedback from some folks, but obviously a company such as Red-Button would’ve done their homework, due diligence and market research, so I am seriously being honest and not “funny” when I say I accept your opinion on this, since you folks have the research to back it.

    I did post a question on my http://www.facebook.com/praat-afrikaans which is a page that is operated by myself as part of http://www.praat-afrikaans.co.za which is simply a community page site that I started a while back, where Afrikaans-speaking people may “mingle”, if you will. :-) The Facebook page simply TOOK OFF and grew to an immense 54000!! lol…who woulda known! Anyways, yse, I posted the question there, and here’s the results:

    Obviously only a few people of the thousands partook, since everyone doesn’t see every post all the time, but, of those that participated, here goes:
    Per month:
    3GB – 53 votes
    10 GB – 40 votes
    100GB or more – 17 votes, but, some may just be “bragging” ;-)
    1 GB – 7 votes
    and then all other options have less that 7 votes. So, still, the 3 Gig things rules.

    Now, and interesting question – ENTIRELY UNRELATED TO THIS ENTIRE THREAD, lol, but, possibly quite interesting in terms of human behavior and psychology etc:
    Could the fact that the whoel 3Gig cap thing of Telkom several years ago, have been a factor to influence (program – think Pavlov’s dogs?) the internet usage of South Africans?
    Hmmm…something to consider, no?

    Anyways, I thought I’d put the votes up just for interest’s sake.

    Cheers

  6. It’s totally crazy : a country like South Africa, biggest economy of the continent, currently member of the ” Brics ” cannot offer in 2011 an unlimited and cheap internet as throughout the world…

    I mean, I never thought, before coming to SA that I gonna pay more than 2000 rds per month just to get internet, needless to precise that it’s slow and very limited regarding to the data downloaded…

    I don’t know who is the responsible for this situation, but really, using the web in those conditions, moreover as you’ve written in your article when EVERYBODY need internet… ” It is clear that Internet is no longer a nice to have but a necessity and RedButton looks to ensure that this need is fulfilled. ” Hopes…

  7. Hi Again,

    I have asked for your venue details and perhaps what you have purchased. I surely do not want you to spend as much as you say you do. There are other options available to you. I have already dropped the Hotspot rate at your venue to half of what it used to be. The best option is for you to purchase a Mobile broadband product via one of the service providers. This will perhaps save you a couple of rands. This is on contract basis though, and you will be locked into a 24 month contract.

    Also you need to remember that our system was designed specifically for those who use more or less than 2GB of Data. It is much cheaper for the small user than what it is for a bigger user, as yourself.

    I hope this helps. You can email me directly if you have further discrepancies (yazeed@redbutton.co.za).

  8. I think yes… it is expensive… when you consider that other businesses offer WiFi for free as opposed to your 0.60c per MB.

    • Hi,

      You have to consider the fact that you as a user have no other payments to make beside the Internet you use. We cover (most of the time) the ADSL rental and all other costs involved. The venue itself pays no monthly rental, in most circumstance. Our system is specifically designed for users who users who use less rather than more (MB’s).
      Please also read the blog post called to Free Or Not To Free.

      Then may I also ask that you supply the location/venue you use this wifi? We agree that R0.60c is a very price and will surely change this for you.

      Thank you.

  9. In France ADSL is unlimited for 30 euros / month for an ADSL2+ connection (25MBit) , it’s my first time in South Africa and i was surprised when i was not able to look at least at a youtube video (in SD not HD) and this for an expensive price… what’s going on here???

    • Unfortunately in South Africa, because we are still a developing country, ADSL is a privilege and not a necessity. There are numerous uncapped packages being advertised around South Africa but all have policies put in place where users are limited to a certain amount of data or risk being throttled drastically.

      As far as the expensive costs: Our venues decide what their cost per megabyte will be. We have however discussed this tariff with your venue and they agreed to drop the rates. You will now enjoy the internet at a much lesser rate. Unfortunately we are not able to convince the venue to upgrade the speeds of their account due to reason they have not mentioned.

      I hope you understand the situation we find ourselves in and accept this response.

      • So let me see if I understand this correctly. I have been at Cross Cultural solutions volunteering for 6 weeks (which I paid for, not including the flight) and they control the rates per megabyte? Is that what you are saying? I find that hard to believe.

  10. Thanks guys ,
    I think you are the best. You are doing a great job .

    I just arrived in cape town and my iPad detected your wifi hotspot in the room I live in . I sent a mail to ask for where I can buy vouchers from, and few minutes later I got the reply. Since the adderly hotel is just next door to my apartment, I walked and bought a voucher. When I tried your connection, it is the best I’ve never had in SA. I was loosing money buying bundles from telecoms and ended spending a lot of money per day…

    With Redbutton, not only I save a lot, the quality is best.

    Thank you

  11. This is by far the most expensive product I’ve ever come across. So far, in the 6 weeks I’ve spent as a volunteer in SA, I’ve spent $600 U.S. on internet fees with Redbutton. This is the single most expensive item during my stay here. I am also a student, so I need to download articles and I listen to world news on the internet to stay informed, but this is ridiculous. If I lived here, I would go broke.

    The arguments you make are not compelling. If I lived here, I would much rather pay for a modem and sign a contact to pay $600/ year ($50 U.S./ per month unlimited) than $600 U.S./ 6 weeks. Who uses internet for just email anymore? People watch content, upload videos, download music, etc. I just have about enough credits left to send this comment. With all the money I’ve spent, I still have almost no credits left. I can’t afford to put in another $100. I would rather donate it to charity or buy several meals. Think about it! That’s R 5400 for 6 weeks!

  12. This is some of the most expensive and poorest quality internet I’ve ever experienced in the world. Yes I do think it’s expensive because it is.

    • Hi,

      Please let us know which venue you have been experiencing the poor internet?

      Just to reiterate some important points on previous blogs:
      1. Our venues decide what they would like to charge (we only give them a benchmark)
      2. The venue pays for their own ADSL line rental costs. Which can be quite exorbitant for a business who does not receive daily internet users.
      3. Internet data for business in South Africa is still very expensive
      4. There are venues who offer free daily allocation and they have much better speeds (up to 4mbps)

      I hope this clarifies some of your thoughts and we do apologise for this. If you can please tell us which venue you have experienced this poor quality I will make sure a faster, better quality connection is provided next time you visit.

      If you have any further queries do not hesitate to comment.

      • Hi

        Correct me if I’m wrong.
        With your cost comparison there is no cost for ADSL line rental with RB and RB speed is 4mbps,yet in this post you say that the venue is paying for ADSL line rental and other venues has much better speeds.

        Why the difference.

        • Hi,

          Thank you for this.

          Yes there is no line rental cost for the end user. So if you own a venue your clients do not pay for line rental. In most cases though (if venue has potential for increased traffic) we do subsidise the line cost for the venue.
          As for the other venues having better speeds: not many other venues have better speeds because telkom only allows 4mbps and 10mbps (only in certain areas). Unless there providers used fibre or complete wireless (no ADSL, hardware costs are expensive) its unlikely faster than the 4mbps.
          Reason why speeds might not be 4mbps could be the amount of users on 1 line. So its 4mbps divided by the amount of users would give you a more accurate speed.

          I hope this answers your questions. Thank you.

  13. Good evening my friends
    i want to tell you that this internet is beautiful.
    its fast good and good quality.
    I love red button i want to push him :D
    So have a good time with this beautiful internet.
    Pleasure

  14. How much is a “Credit” in MB or GB? Using the term Credit is nothing other than a smokescreen to cover the high cost of the bandwidth. What does 5,250 credits for R50 mean? It is absolutely meaningless without a link to the product being purchased, that is bandwidth. If you have to use Credits, why not be transparent and state “One Credit is equivalent to xMB” on the pricing page.

    For this reason Red Button is a grudge purchase when NOTHING else will do.

    • Hi Shaun,

      I understand your concern. We are in the process of becoming more transparent by redesigning our website, blog and all forms of communication.

      Much like loyalty programs our credit system acts in the same manner where 1 credit = 1 cent.

      Because our hotspots (venues) all offer different rates, credits is the only way we can make sure you are receiving the exact Rand value amount as per your hotspot rate.

      We apologise for any inconvenience caused and will certainly look at comment when we developing our new system.

      Could you kindly let me know where you have been using?

      Thank you for your comments.
      Yazeed

  15. Yazeed, Thanks for the quick reply. I’d buy the transparency story if the Session Status screen (after I purchased the credits) didn’t have very-hard-to-read white text for the relevant details! All the labels are in easy-to-read black but the important stuff is not; makes me wonder. No need to reply, I have unsubscribed from this feed.

Leave a Reply