Will Cell C’s OOB data price hike help save it?
Analysts speculate on what motivated the hike in Cell C’s out-of-bundle data rates
Analysts speculate on what motivated the hike in Cell C’s out-of-bundle data rates
-
Join the MyBroadband community
South Africa’s biggest forum. Discuss, discover, and connect with thousands of members.
-
Question of the Day: Which legendary musicians or bands have you seen live?
Will Cell C’s OOB data price increase help save it?
- Thread starter rpm
- Start date
Chevron
Serial breaker of phones
If you say so.
I'd say making sure they don't go under due to mountains of debt a more likely reason.
Inevitability
Expert Member
For an increased OOB rate to "save the company", there had better be a gazillion people using OOB data.
I find it hard to believe that CellC has that kind of customers.
Which then begs the questions: Why risk the bad PR to make a few bob extra?
I find it hard to believe that CellC has that kind of customers.
Which then begs the questions: Why risk the bad PR to make a few bob extra?
If i do simple arithmetic and conservatively use 100 000 subscribers(is that conservative enough?) at 100MB OOB per month I get...
100 000(customers) X R0.15 X 100MB(OOB) = R 1 500 000.00
100 000(customers) X R0.99 X 100MB(OOB) = R 9 900 000.00
Diff = R8 400 000.00 X 12 months = R100 800 000.00 per annum in revenue.
Last edited:
deweyzeph
Honorary Master
Exactly. The OOB rate of 15c per MB only ever applied to people who had ALREADY bought a bundle and had exceeded the bundle's data allowance. And even then, it only applied until the time period of the bundle expired. Otherwise the OOB rate has always been 99c per MB.
MickeyD
RIP
Cell C had to react when MTN called their bluff and dropped the pricing on prepaid to 79c/min. Cell C were hoping to win over some cash customers in the prepaid market via aggressive marketing campaigns and even a legal battle or two. This failed... and now they seek cash elsewhere.
Inevitability
Expert Member
Two things:
1. 100MB OOB in a month will cost R99 for that month ... That's gonna show up very quickly on a bill or in airtime being used up very fast. So the guy/girl is gonna quickly realise he needs to start buying a bundle.
2. Even at R100m extra a year... is that gonna save a company that has recently (based on what the article says) dug itself a R12bn hole of debt?
My point being: I don't think that raising the OOB rate was intended to save the company. Yes, maybe to make more money. But not the sensationalist claim that the article puts forward.
The_Unbeliever
Honorary Master
Waiting for my contract to end... two months to go.
Randux
Expert Member
“The increase will only help get it out of trouble
if Cell C’s accountants believe it will do better
with fewer customers,”
Pleeeaaassse I wont be leaving because of OOB rates, there's no where to go.
if Cell C’s accountants believe it will do better
with fewer customers,”
Pleeeaaassse I wont be leaving because of OOB rates, there's no where to go.
Totally agree.
RichardG
Honorary Master
They are encouraging prepaid customers to recharge and take advantage of super recharge deal!
This offer wasn't meant to last forever it was a strategy on CELL C part to get their subscriber numbers up!
If CELL C implement OOB Shark,consumers will have peace of mind and not feel fear!
This offer wasn't meant to last forever it was a strategy on CELL C part to get their subscriber numbers up!
If CELL C implement OOB Shark,consumers will have peace of mind and not feel fear!
As I said in the other threads on this:
CellC introduced the "low OOB rate" as an enticer to capture a cash based user group that has a slightly higher ARPU than what dominates CellC's customer base.
The strategy failed because the teaser rate was not sufficiently low to capture customers who are in the R50-R150 data a month block because the BAUTwo offered more value on prepaid contracts which included devices and had an IB rate that was less than half of CellCs OOB rate (so you could comfortably over provision) and from Afrihost who entered the market with a product that could see large data allocated at less than a 5th of the price (2.83c per meg) and whose top-up rate was less (9.67c per meg) than CellCs 15c. Ultimately all that CellC could attract was the section of the market who was using variable amounts of data and required flexibility, they could not compete on the new purchase smartphones because the BAUT had successfully cornered offering value on postpaid contracts. Moreover the ideal customer base that they were hunting out is actually a very small section of the SA population in contrast to Vodacom and MTN who have managed to very successfully separate their markets and cater in a well tailored fashion to those different markets (all the MyBB members bitching about the "complexity" and uselessness of various promotional offerings from Vodacom fail to recognize how these moves have improved the lives of many people and fortify the companies position with a large section of the population). I would also argue that the frustration to which CellC was hoping to appeal - customers who had been bitten badly by an OOBShark on a data contract - rather than identifying with the OOB tariff simply shied away from 3G entirely for a period and in some instances were re-enticed on a completely top-up basis. CellC failed to offer the best value or network for smartphones and on large data devices (dongles, tablets) a low OOB tariff isn't nearly as important as decently priced large bundles.
Vodacom's IB=OOB products similarly didn't gain much market traction.
CellC introduced the "low OOB rate" as an enticer to capture a cash based user group that has a slightly higher ARPU than what dominates CellC's customer base.
The strategy failed because the teaser rate was not sufficiently low to capture customers who are in the R50-R150 data a month block because the BAUTwo offered more value on prepaid contracts which included devices and had an IB rate that was less than half of CellCs OOB rate (so you could comfortably over provision) and from Afrihost who entered the market with a product that could see large data allocated at less than a 5th of the price (2.83c per meg) and whose top-up rate was less (9.67c per meg) than CellCs 15c. Ultimately all that CellC could attract was the section of the market who was using variable amounts of data and required flexibility, they could not compete on the new purchase smartphones because the BAUT had successfully cornered offering value on postpaid contracts. Moreover the ideal customer base that they were hunting out is actually a very small section of the SA population in contrast to Vodacom and MTN who have managed to very successfully separate their markets and cater in a well tailored fashion to those different markets (all the MyBB members bitching about the "complexity" and uselessness of various promotional offerings from Vodacom fail to recognize how these moves have improved the lives of many people and fortify the companies position with a large section of the population). I would also argue that the frustration to which CellC was hoping to appeal - customers who had been bitten badly by an OOBShark on a data contract - rather than identifying with the OOB tariff simply shied away from 3G entirely for a period and in some instances were re-enticed on a completely top-up basis. CellC failed to offer the best value or network for smartphones and on large data devices (dongles, tablets) a low OOB tariff isn't nearly as important as decently priced large bundles.
Vodacom's IB=OOB products similarly didn't gain much market traction.
I dont think customers will make the mistake 12 months in a row.
But averaged out and assuming some will do more than the 100MB in calculations that figure sounds reasonable.
Then again Cell C cant provide a data connection able to use in bundle rates, OOB will be slower.
jannievanzyl
Telecoms expert
OOB usage is very low, the vast majority of users do not consume their bundles fully. So it's not about OOB, rather it's to entice Cell C subs to buy bigger bundles, up from 50MB.
Agreed. There was zero incentive to purchase anything higher than 50MB. In fact, you would have been stupid to.
Its the non-use of purchased bundles that is the cash cow.