On March 18, Telkom, the South African-owned telecom operator, announced that it will raise its telecom tariffs by April 1, 2025. But guess who seized the opportunity to launch an uncapped internet service for just $0.27 per day?
Its competitor, MTN South Africa.
While competitors were expected to react to Telkom’s tariff hike, no one expected MTN to move this quickly. Its new product, GigZone, offers 5Mbps (megabytes per second) internet for just R5 ($0.27) a day. The speed isn’t exactly fast—streaming high-definition videos or downloading large files may be a challenge—but at that price, it’s hard to complain. For many people in township communities, this could be the most affordable way to stay connected.
Other telecom players are also looking at the low-cost internet market, but most of the competition so far has come from fibre-based providers like Riot Network, Vumatel, and Wire-Wire Networks. These companies have been working to bring affordable fibre to South African townships, but they face a major hurdle: rolling out last-mile infrastructure is expensive and takes time. MTN, on the other hand, already has mobile towers in these areas, allowing it to launch GigZone without building new infrastructure first. This means it can expand much faster than traditional fibre operators.
Right now, GigZone is only available in parts of Gauteng and the Western Cape, but if the pilot is successful, MTN could quickly scale it across the country. South Africans are facing price hikes for different services that improve their livelihoods: electricity (Eskom), internet (Telkom), and streaming service providers (like MultiChoice) have increased prices—almost at the same time—making downsizing a likely option for many of them, especially those in lower-income areas.
A $0.27 uncapped internet per day looks like a good deal, and only Wire-Wire Networks previously offered internet service at this amount. Yet, with more people joining its network, it became slow. From the pilot test, MTN’s GigZone doesn’t appear to have that problem. Commercially, it remains to be seen.
