Vodacom revives 4U
At the weekend, South Africa’s largest cellphone operator advertised the introduction of “new monthly packages” for customers not wanting to sign two-year contracts. However, the concept has been around since 2001 in the form of the 4U contract concept, says Chris Ross, the executive in charge of products and services at Vodacom.
“In October 2001, we launched the monthly contract and [the new offering] is just an extension of those contracts, to try and cover a greater section of the marketplace,” Ross told Moneyweb Radio .
Moneyweb was told earlier this week that the pricing of the “new” offerings would be made available on Wednesday. However, Ross said existing tariffs on ten (not 11 as advertised) two-year packages are now being offered on a month-to-month basis.
“The reason that there is nothing specific on the website is because we are just taking existing tariffs, which have been around for many years, and we’ve allowed the consumer the choice to either take on a month by month [contract], or to in fact engage in a 24-month contract for which we will subsidise a handset as we’ve always done,” said Ross.
Vodacom has used the entry of no-fuss service provider Virgin Mobile as an opportunity to remind the market of its month-to-month offering, and extend it to some of its current contract packages. One of Virgin Mobile’s major selling points is the “no lock-in” concept – where a customer can walk away from the services with 30 days’ notice, as a phone is not bundled in with the minutes bought from the service provider (the amount used in a month is debited off a customer’s bank account monthly).
“When the market hots up, you go out with all guns blazing and tell people about what you really have to offer, and remind subscribers, who may have got a bit staid with the advertising we’ve had over the last few years, that these products in fact are available to them,” said Ross.
He continued: “I think that we have to try and educate people and remind people of what we’ve got. With Vodacom having been around for so long, many of our products have become perhaps stale, and it always does help us to go out back into the marketplace to enhance…”
Contract subscribers are able to roam on international networks when travelling overseas and also enjoy cheaper per-minute prices than their prepaid counterparts;’ prepaid customers are unable to do either. However, handsets are typically bundled into the package; for some, it’s a way to stagger the cost of the latest and greatest handset, but others are just looking for telephony and find the add-ons unnecessary.
The month-to-month option allows customers to have the best of both worlds: cheaper call costs (when compared with what prepaid users are charged) and the ability to roam on international networks, without having to subsidise a phone.
Noting the weekend developments in the papers, Virgin Mobile CEO Sajeed Sacranie said in a statement: "The Fat Cats have become Copy Cats. They’re still nowhere close to offering our value…but at least they’re trying and customers will benefit."
"The only reason we don’t offer free phones is because we want to be upfront and not hide charges," said Sacranie. "In the case of competitor’s products you often pay through your nose for those so-called ‘freebie’ cellphones and more besides; the costs are simply covered by your subscription fees and other hidden charges including exorbitant airtime charges."
Source: Moneyweb
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