Consumers score with 99% discounts
Vodacom recently launched its Yebo4Less Top Up service, offering subscribers up to 99% off calls to all networks. The discount of up to 99% is applied to the relevant Yebo4Less Top Up tariff, which will be available at launch on 1 October 2008, to all networks in South Africa.
“With Yebo4Less our Prepaid and Top Up customers benefit from lower voice and video call costs when excess network capacity is available in the area the customer is phoning from. As with Yebo4Less for Prepaid, we expect a high uptake of the new Yebo4Less Top Up service, positively contributing to revenue and customer growth,” said Vodacom’s Dot Field.
This very high discount is only expected to occur during times when the network is particularly quiet, but with a base price of R2.89 for calls to other networks it means that Vodacom will only get around 3c a minute (per second billing apply) from subscribers during such periods.
Vodacom also confirmed that the cost of the full call would be discounted by percentage when the call was made. This means that a Yebo4Less subscriber can theoretically speak for hours at a price of less then 3c per minute if they are lucky enough to hit the 99% discounted rate.
This raises the question as to whether Vodacom is making a loss on these off-net calls where interconnect rates to other networks – typically MTN and Cell C – can be as high as R1.25 per minute.
Vodacom confirmed that they will indeed make a loss on any off-net calls where the interconnect rate is higher than the discounted call rate. No special interconnect rates seem to have been negotiated with other operators and the R1.25 per minute cellular interconnect rates are not variable according to the time of day.
Vodacom is however confident that the net effect of the discounted rates will mean a much higher utilization of the network during quiet periods and that the net effect of the new Yebo4Less service will result in higher revenues.
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