Prepaid price war
Vodacom and Cell C have entered the pricing war started last year by MTN. Last week, Cell C made a big splash with its new “Woza Wheneva” campaign, and it seems as if Vodacom was almost reluctantly forced to enter the fray.
It’s a no-brainer to be running a price promotion at the moment, with the “R”-word on many people’s lips. Penetration in this market is also already over 100%, which means that every percentage point gain in market share will have to be fought for.
Cell C’s Woza Wheneva offers 20 free extra airtime minutes for every R10 spent on recharging. For example, a R10 recharge notches up R10 airtime and 20 minutes of free Cell-C-to-Cell-C calls. A R25 recharge earns you 50 minutes, a R30 investment provides a full hour of free talktime. The promotion will allow a subscriber to earn a maximum of 100 extra free minutes per SIM per week.
Cell C says customers may accumulate recharges within the week, but must use all free minutes gained during the week of recharge. It’s not hard to figure out what Cell C’s trying to achieve with this promotion (which ends in May).
The carrier’s wildly successful Woza Weekend system likely means that most of its subscribers are recharging nearer to the weekend. The Woza Wheneva promotion will provide some incentives for customers to recharge early in the week, as well as drive usage on the company’s network. The Woza Weekend promotion from Cell C has helped the carrier increase its prepaid-subscriber base to more than 4m.
Vodacom announced its price promotion via a bland full page advertisement in the Sunday press. Billed as March Madness, Vodacom is offering prepaid subscribers 20% free airtime when they recharge.
In effect, the savings to users on Vodacom prepaid or MTN Zone are fairly comparable, but with Vodacom it rewards you with “free” airtime, as opposed to MTN’s route which discounts the price of calls.
Vodacom takes a clear shot at Cell C in its March Madness advertising campaign, saying: “we won’t tell you who to call, who not to call or when to call them. That’s free airtime with real freedom.”
MTN made the first move into the discounted airtime space back in December 2007, with the launch of MTN Zone. This service promised discounts of up to 95% for prepaid subscribers. The system relies on the level of demand on the network at the users’ location at any specific point in time. MTN wanted MTN Zone to help change traditional usage patterns and further stimulate call rates during times of low network utilisation. Why should its subscribers wait until 8pm to call?
At first this was only for prepaid subscribers and for MTN-to-MTN calls. However, by August, MTN extended its MTN Zone service to cover calls to other networks as well.
MTN also redesigned its postpaid (contract) offerings late last year. Vodacom hasn’t made any visible moves in this direction.
Both MTN and Vodacom have said that data billing and packages are next in their sights. If there’s some downward movement on data pricing (from R2 per MB), there will be countless happier consumers…
Prepaid price war – give your views
Moneyweb
Loading ...