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):

 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.

 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.