Why Cell C hiked OOB data prices

Cell C’s decision to hike its out-of-bundle (OOB) data rates from 15c to 99c per Megabyte (MB) on 1 May 2014 was informed by customer feedback and behaviour.

This is according to Cell C CEO Jose Dos Santos, who spoke to a group of journalists at the Cell C headquarters in Midrand on Tuesday, 13 May 2014.

Dos Santos said that even before the change they didn’t see users going out of bundle often and subscribers continue to stay within their bundles after the OOB rates went up.

Since Cell C’s whopping 560% OOB rate hike the network has seen a “phenomenal increase” in people buying bundles, said Dos Santos.

Asked whether it was a mistake for Cell C to have out-of-bundle data prices equal to in-bundle rates, Dos Santos said, “Not at all.”

He added that encouraging users to buy bundles helps them dimension their network accordingly.

With the bundle information of subscribers Cell C is able to better predict how much capacity is needed on the network, Dos Santos said.

Though somewhat contradictory to his earlier remarks, the network dimensioning explanation is a common one among mobile network operators.

Vodacom and Telkom have also previously said that data pricing models are designed to make it attractive to customers to commit to data bundles.

This provides networks with data on usage patterns and ultimately allows operators to make predictions that let them manage their networks more efficiently, Vodacom said at the time.

Dos Santos said that the idea is to encourage “buy what you consume” behaviour.

“And even if you go out-of-bundle… 99c is a good rate,” Dos Santos said.

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Why Cell C hiked OOB data prices