Red Bull Mobile launches with two aggresive pricing models

omegaselect

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Where are you getting your facts from? How do you calculate that Cell C is selling below cost? This isn't a branch of Checkers selling discounted bread - the cost / pricing models aren't the same.

Just because prices are astronomical in the rest of the market that doesn't mean they have any correlation to the cost. If I'm wrong I'd be very interested to see your numbers, but quite frankly , I don't think they exist.
You don't need to believe me, why don't you just ask Lars if they're currently selling data at a profit. ;)

He does not need to state what their input costs are, just a simple yes or no on the question:

"Is 5c/MB below cost?"

Or you could could ask it as follows:

"If you can sell data at 5c/MB profitably, why are your normal bundles priced as high as 50c/MB?"
 
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Romito

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@ LPR I gotta ask, is the current CellC special here for good? What happens when it expires? Is it renewable at the same rates? Do you have a PS3 or Xbox? :D:erm:
 

flarkit

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@ LPR I gotta ask, is the current CellC special here for good? What happens when it expires? Is it renewable at the same rates?

Now that's an interesting question. I assume they'd stay the same, as applies to existing 2-yr contracts? After all, a sudden steep increase at renewal time would chase the customers away
 

Aztech

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You don't need to believe me, why don't you just ask Lars if they're currently selling data at a profit. ;)

He does not need to state what their input costs are, just a simple yes or no on the question:

"Is 5c/MB below cost?"

Or you could could ask it as follows:

"If you can sell data at 5c/MB profitably, why are your normal bundles priced as high as 50c/MB?"

You're the one making claims so you should be able to back them up.

But you can't so there's nothing more to see here.
 

Zyzzyva

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You don't need to believe me, why don't you just ask Lars if they're currently selling data at a profit. ;)

He does not need to state what their input costs are, just a simple yes or no on the question:

"Is 5c/MB below cost?"

Or you could could ask it as follows:

"If you can sell data at 5c/MB profitably, why are your normal bundles priced as high as 50c/MB?"

I agree with you tbh. I think its fair guess based on a thumbsuck + 1 that they are likely selling at below cost at the moment. The big question is will 5c be below cost in a few short years once most towers are on fiber (atleast in developed areas), and if they are currently selling below cost, what exactly is cost?

Is cost nearer to 5c or 19c? My guess is its around to 5-10c (8ta is selling ipad data at roughly 10c if you take a 3 gig bundle).

If its closer to 5c then they should be able to raise prices "slightly" under the idea of the special ending without too much turmoil. If not then they might be able to play the smartphone card a little stronger (not that the market is very big yet, althought its growing fast). I don't know the numbers but i would guess most smartphone users will not use a gig of data attached to their phone even if you give it to them well below cost. Surely breakage is higher on a 4 inch device than on a 15 inch laptop.
 
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omegaselect

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I agree with you tbh. I think its fair guess based on a thumbsuck + 1 that they are likely selling at below cost at the moment. The big question is will 5c be below cost in a few short years once most towers are on fiber (atleast in developed areas), and if they are currently selling below cost, what exactly is cost?
I agree 5c/MB will be cost in a few years but selling now at that price and then hoping the costs will come to you is very dangerous if you don't get the timing right. This is exactly what Neotel did and look where they ended up.

Is cost nearer to 5c or 19c? My guess is its around to 5-10c (8ta is selling ipad data at roughly 10c if you take a 3 gig bundle).

If its closer to 5c then they should be able to raise prices "slightly" under the idea of the special ending without too much turmoil. If not then they might be able to play the smartphone card a little stronger (not that the market is very big yet, althought its growing fast).
For a new entrant like Cell C, it will be closer to the 19c mark than 5c, definitely way over 10c/MB. Their best data bundle sits at 13c/MB. They don't have the economies of scale of the big networks, so everything is more expensive, transmission, international bandwidth, operations, etc.

I don't know the numbers but i would guess most smartphone users will not use a gig of data attached to their phone even if you give it to them well below cost. Surely breakage is higher on a 4 inch device than on a 15 inch laptop.
Agree, but it seems Shake&Bake is bucking the trend, doing gigs on his smart-phone. Must be all those 'Adult Education' movies. ;)
 

Zyzzyva

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I agree 5c/MB will be cost in a few years but selling now at that price and then hoping the costs will come to you is very dangerous if you don't get the timing right. This is exactly what Neotel did and look where they ended up.


For a new entrant like Cell C, it will be closer to the 19c mark than 5c, definitely way over 10c/MB. Their best data bundle sits at 13c/MB. They don't have the economies of scale of the big networks, so everything is more expensive, transmission, international bandwidth, operations, etc.


Agree, but it seems Shake&Bake is bucking the trend, doing gigs on his smart-phone. Must be all those 'Adult Education' movies. ;)

Well atleast this loss leader gamble brings with it physical infrastructure which will always be useful.

Rather than a 100 million spent on another youth league party.

Whats a few billion rand gamble in the big scheme of things - right?
 

Synaesthesia

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19c a MB you reckon - I'd love to see the breakdown on that. If that is the true cost then Cell C is taking huge risks. Surely the new lines from overseas which hit the country a few years ago have brought down bulk internet costs massively?
 

Zyzzyva

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19c a MB you reckon - I'd love to see the breakdown on that. If that is the true cost then Cell C is taking huge risks. Surely the new lines from overseas which hit the country a few years ago have brought down bulk internet costs massively?

The problem comes from the 5 billion they are spending on the network. If they move 1 gig over that network (and nothing more) then that one gig costs them 5 Billion moola. Who knows what the actual cost is? One thing is for sure, the per gig cost goes down as you begin to move more gigs.
 

Park@82

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From April 1, when the new Consumer Protection Act kicks in, it will be much easier to get out of a contract. You'll only have to pay for the phone (the subsidised cost), plus a "reasonable" admin fee. I don't think people realize how much this is going to change the mobile market.


Will it apply to existing cell phone contracts?

Yip, any contract.


Can someone please confirm this here: http://mybroadband.co.za/vb/showthr...uld-I-wait-before-signing-a-new-cell-contract
 

omegaselect

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19c a MB you reckon - I'd love to see the breakdown on that. If that is the true cost then Cell C is taking huge risks. Surely the new lines from overseas which hit the country a few years ago have brought down bulk internet costs massively?

That's the point. They are taking a huge risk, but they also have no choice.

International pricing coming down is a small part of Cell C's cost savings. They don't have huge numbers of 3G users, most likely less than 50 000, so they can't get the economies of scale on the incoming cables, the same way an IS or Vodacom can.

To reach these 50 000 subscribers, you have to build a mobile network, connected by back-haul links, country-wide. And that's a near fixed cost. You can't scale it, in a linear fashion, from 1 user to 100 000 users or more.

jak3 put it well. 1 user doing 1GB on this network costs them R5 000 000/MB. But 100 000 users doing 3GB each per month will see this drop to tens of cents per megabyte.

But nowhere near 5c/MB. That's why their bundle pricing sits at the same price levels as MTN and Vodacom.
 

Zyzzyva

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Now that i think about it my statements about their costs possibly being 5-10c a MB were rather ridiculous. You first have to fill the network with a ton of customers before you start hitting the the sub R1/MB range - eventually going as low as 5c or less.

What is still up in the air is how many gigs cell c will move over their network and how many customers they will have giving them money for access.

Internationally the tech seems capable of a lot more than its doing here, so perhaps 5c or less is actually possible on a full network using current tech. Time will tell.
 
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fordguy

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The ANNOYING thing is that Cell C stores in Cape Town are clueless with regards to this product. I lost my phone yesterday so am DESPERATE for a phone ASAP!! I want to atleast apply for this thing to make sure the second it comes in i get one. BLERRIE HELL!!
 

Zenbaas

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The ANNOYING thing is that Cell C stores in Cape Town are clueless with regards to this product. I lost my phone yesterday so am DESPERATE for a phone ASAP!! I want to atleast apply for this thing to make sure the second it comes in i get one. BLERRIE HELL!!

Yeah I'm applying asap as well.
 

flarkit

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The ANNOYING thing is that Cell C stores in Cape Town are clueless with regards to this product. I lost my phone yesterday so am DESPERATE for a phone ASAP!! I want to atleast apply for this thing to make sure the second it comes in i get one. BLERRIE HELL!!

Same up here in Jhb. Called 2 CellC stores and got completely confusing info from them.
 

Budza

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The ANNOYING thing is that Cell C stores in Cape Town are clueless with regards to this product. I lost my phone yesterday so am DESPERATE for a phone ASAP!! I want to atleast apply for this thing to make sure the second it comes in i get one. BLERRIE HELL!!

Yeah I'm applying asap as well.

Same up here in Jhb. Called 2 CellC stores and got completely confusing info from them.

Same in Cape Town. I need a CellC SIM to test with for the weeks between now and then. I need to sign up before the 25th, as I'm away for that week. Going to be pished off if they run out of stock... Is there a wait to be credit checked or something? I'm keen to roll in there, sign up, collect the phone and SIM and get going...
 

flarkit

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I popped in to a CellC store in a major mall this morning, hoping to test-drive the Motorola MB525 (Defy). Not a single sign to be seen anywhere in the store, that today was supposed to be the official launch of RBM. When I showed a salesguy the SMS offer regarding the RedBull Shot, he could only make excuses about waiting for the stock to arrive. Really??? On launch day, they haven't received any form of marketing materials? What a pity, because today's Friday and payday (for many), which would've been the PERFECT opportunity to be raking in the excited new subscribers.

They had the RBM HD on demo and I quite liked the bits that I saw. When asked about the Motorola, he did the "Umm.. ahh.. it should be available in March" bit. Oh dear.
 

Zenbaas

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I popped in to a CellC store in a major mall this morning, hoping to test-drive the Motorola MB525 (Defy). Not a single sign to be seen anywhere in the store, that today was supposed to be the official launch of RBM. When I showed a salesguy the SMS offer regarding the RedBull Shot, he could only make excuses about waiting for the stock to arrive. Really??? On launch day, they haven't received any form of marketing materials? What a pity, because today's Friday and payday (for many), which would've been the PERFECT opportunity to be raking in the excited new subscribers.

They had the RBM HD on demo and I quite liked the bits that I saw. When asked about the Motorola, he did the "Umm.. ahh.. it should be available in March" bit. Oh dear.
Doesn't sound good at all.
 

flarkit

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I popped in to a CellC store in a major mall this morning, hoping to test-drive the Motorola MB525 (Defy).

So this morning I visited the CellC shop in Brooklyn Mall. When I enquired about the RBM package, the lady tried to explain to me that they were advertising them from the 25th, but that they weren't actually selling those contracts yet and that no stock had been delivered. Eh? The shop had a queue of about 5 people waiting for assistance, so the sales-person may have been a little flustered. So on a whim I went to the branch in Hatfield, where the assistant was surprised to hear that. He had 2 Huawei/RBM HD phones in stock and was definitely willing to open a new RBM contract, as soon as I provided "3 months' bank statements, a payslip, proof of residence and an ID". He even honoured CellC's SMS offer of a RedBull Shot.

I might still be porting across from VC, although it seems that internal communication and training may a little improvement, CellC.
 
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