Virgin Mobile drops prices
Virgin Mobile South Africa launched its new pre-paid price plans today (2 May 2013) called “1,2,Free”, offering subscribers every third minute, SMS, or megabyte of data free.
Two “1, 2, Free” price plans are available: one focused on voice, and the other on SMS and data:
- Free Talk: every third minute is free every day.
- Free Surf and Text: every third SMS and every third Megabyte is free every day.
Both plans offer a per minute call rate of 99c, billed per second, while an SMS/MMS cost 50c each, and data is billed at 99c/megabyte.
CEO of Virgin Mobile, Jonathan Marchbank, explained that the “Free Talk” plan will be Virgin Mobile’s default pre-paid price plan, but that customers can change to “Surf & Text” by dialling *110*6# from their handset.
Subscribers can change price plans for free every 30 days.
“We have been waiting for the price wars to play out before announcing 1,2,Free just to see how low they would go – and then we launched a much simpler and transparent set of offers,” Marchbank said.
Marchbank explained that they were going to have the free voice, text, and data all on separate plans, but thought that would be too complicated.
“If you know the mobile market and you’re not a mathematician then this is the offer for you,” Marchbank said. “It’s not a promotion, it’s core offer,” he added.
Asked why they didn’t bundle the free minutes, texts, and data all together in one plan, Marchbank said that “the economics wouldn’t work” for them.
Further questioned about why they didn’t just cut their prices by a third, Marchbank said that it’s to encourage people to use.
“If you start selling at 66c I’m starting a price war I don’t particularly want to,” Marchbank said, adding that he doesn’t want to win customers only on price, but on brand.
Marchbank explained that if someone switches to Virgin because of the price, they’re easy to lose again.
“When somebody makes their price 65c [per minute] I’ll lose them as a customer,” Marchbank said.
He added that at a price of 66c per minute he would also make a loss on calls. “I would rather make money on that call and pass on value to the customer,” Marchbank said.
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