Vodacom slashes data prices, but not really

Despite all the promotional activity, no-one’s blinking first

March 30, 2013
Vodacom cellphone

Vodacom has cut the price of its one-off data bundles, seemingly due to pressure from unhappy prepaid customers who weren’t too impressed with all the promotional activity in the 24-month data contract space. By comparison, the prices of one-off data bundles looked downright punitive.

This also follows a move from MTN at the start of this month.

But both of these moves are temporary. Officially, normal pricing resumes from May 1 (unofficially, it seems MTN will extend its promotion until the middle of the year).

Both large operators are crowing about these promotions. MTN is going so far as to advertise it as the “Big Data Sale”. Think about that for a second.

Operators are aggressively marking down core services. Like a retailer would with last season’s clothing. Or a supermarket does with washing powder. Aside from promotional tariff plans (a bundled suite of pricing), we really haven’t seen this type of activity before.

There’s no denying Vodacom’s promotional prices are impressive (see table below).

Bundle Vodacom normal price Vodacom promo price MTN standard price MTN promo price
20MB R 10 R10*
30MB R 25 R 12
100MB R 49 R 29 R 49 R29**
250MB R 99 R 59
300MB R 149 R 79
500MB R 159 R 99 R 189 R 119
1GB R 279 R 149 R 289 R 149
2GB R 369 R 249 R 389 R 245
3GB R 499 R 299
5GB R 829 R 399
20GB R 3 199 R 499

* Usually a 10MB bundle. Now, 10 MB free.

** Usually a 75MB bundle. Now, 25MB free.

Data bundles are valid for 30 days from the date of purchase.

Crucially, to benefit from these lower prices, prepaid customers also need to select “Prepaid once-off promotion” from *111# and not the usual Broadband Standard or Broadband Advanced bundles (still at “normal” prices)

The big problem with all of this promotional activity? No one is blinking and is willing to make it permanent. Both operators are keeping their options open.

They’re also completely content with locking unsuspecting users into 24-month data contracts which look unbelievable value right now.

2GB for R99 a month? Sign me up! Except in 12 months time, that price is going to look punitive. In 18 months time, there are going to be tens of thousands of very, very unhappy consumers paying 3/4/5 times more for data than they should be. All because they’re locked in.

Shameel Joosub

Shameel Joosub

Shameel Joosub, CEO of Vodacom has repeatedly defended its pricing strategy by saying that if something’s always on promotion, then that’s the effective price. Yes. But no.

A permanent and dramatic cut in the price of data bundles will be the catalyst for a drastic change in consumption and habits, especially amongst high-end smartphone users. I’m not too sure operators want to open that Pandora’s box just yet.

For now, they’re happy to keep dangling the carrot. If a bunch of us get used to using 1GB of data a month at these prices, when they adjust back to the ‘normal’ pricing in May, we’re not likely to cut back our usage. Especially if we’ve bolted one of these bundles onto our normal voice contract.

Cell C blinked a long time ago. But with its market share (and continual network issues), that move isn’t going to force a fundamental change in the way we use data.

Who’s going to blink first? We know for sure that if one of the big two makes a move, the other will follow. For now, we wait. And get our fix on promotional prices.

* Hilton Tarrant contributes to ‘Broadband’, a column covering the ICT sector in South Africa.

Source: Moneyweb

More Vodacom data articles

Massive Vodacom prepaid data price cuts

Vodacom to slash 5GB and 10GB data prices

Vodacom slashes broadband prices

Vodacom LTE for prepaid officially launched

Vodacom to cage “out-of-bundle shark”

Tags: Headline, MTN, Shameel Joosub, Vodacom

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