Vodacom’s new Smart, Red contracts compared

Vodacom has radically simplified its contract packages, by launching seven new tariff plans which it hopes will stimulate usage and uptake of smartphones even further. It launched its first four integrated price plans In July and August last year, a month after Cell C shook up the market with its StraightUp contracts.

Integrated contract plans (with voice, SMS and data) aren’t new. There’s been a rapid shift to these in developed markets for a number of years now, as smartphone penetration has increased.

But beyond offering bundled value, chief executive Shameel Joosub wants to make sure customers aren’t shocked by out-of-bundle charges. It’s a deliberate strategy to move away from the in-bundle and out-of-bundle distinction. Yet, there are still out-of-bundle rates: voice calls cost up to R1.70 per minute, data is billed at the punitive charge of R1 per MB and SMSs cost up to 80c.

Simply put, Vodacom wants you to commit to a predictable monthly spend, even if you’re not necessarily going to hit the limit in a typical month. So instead of you buying a R299 Smart M contract, and ending up spending an additional R100-odd out-of-bundle, Vodacom is going to try get you to sign up for the R499 Smart L contract. And it’s going to try upsell you on additional data bundles (because the bundled data at the price points below is likely not going to be enough, especially on high-end phones).

Is this strategy going to work? That’s the big question.

Vodacom Smart package (incl a smartphone) Minutes (billed per second) SMS Data (MB) Price
Smart S 75 150 75 R199
Smart M 120 240 120 R299
Smart L 250 500 250 R499
Smart XL 400 800 400 R699
Red Advantage 700 unlimited 700 R999
Red Premium 1200 unlimited 1200 R1,599
Red VIP unlimited unlimited 1500 R1,999

Source: Moneyweb

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Vodacom’s new Smart, Red contracts compared