{"id":549336,"date":"2006-06-28T07:27:31","date_gmt":"2006-06-28T07:27:31","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/549336-the-branson-flair.html"},"modified":"2006-06-28T07:27:31","modified_gmt":"2006-06-28T07:27:31","slug":"the-branson-flair","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/549336-the-branson-flair.html","title":{"rendered":"The Branson flair"},"content":{"rendered":"

It was a jet for the cellphones and a foofie slide for the credit card launch. And Branson didn\u2019t mince his words this week as he accused SA\u2019s banks of ripping off credit cardholders to the tune of R1,5bn a year and predicted his credit card would lead to the biggest shake-up yet in SA\u2019s credit-card market. <\/font><\/p>\n

Branson\u2019s strategy is to attack what he calls fat and bloated industries everywhere, as he\u2019s now aiming to do here. Virgin Mobile, a joint venture with Cell C that will piggyback off Cell C\u2019s infrastructure, offers a prepaid product and two contracts that are pitched as being much simpler and cheaper than the offerings of Vodacom, MTN or Cell C itself. <\/font><\/p>\n

The Virgin Money credit card carries no annual fees or loyalty fees and will charge more competitive interest rates than those of the big four banks, which have a 92% share of the 4-million credit cards in issue in SA. <\/font><\/p>\n

Virgin is a sexy brand with a high profile in the South African market and there\u2019s no question the cellphone and credit card offerings will have a big impact. Nor is there much doubt that the headline packages on offer will indeed be cheaper than rival offerings. Equally though, there is a good deal of smoke and mirrors, and if you take the tariff structures to pieces carefully, <\/font><\/p>\n

Virgin\u2019s offerings aren\u2019t necessarily quite as competitive as the marketing hype would have us believe. It all depends on how they are used. So, for example, Virgin Mobile\u2019s prepaid tariff is more expensive than that of rivals for the first five minutes of call time per day, but cheaper after that. <\/font><\/p>\n

The problem, though, one analyst notes, is that this means it benefits only customers spending at least R352 a month \u2014 which cuts out the vast majority of prepaid cellphone users. Similarly, the contract packages (which don\u2019t offer the free handset upgrades South African customers are used to) may work out cheaper or more expensive than those of rivals, depending on your usage pattern. The quality of service, of course, depends on Cell C. <\/font><\/p>\n

The credit card clearly is cheaper than those offered by the major banks \u2014 as long as you behave as the package intends, using it strictly as a credit card. But try going into a bank branch and using your Virgin card to make a deposit or withdrawal and you\u2019ll find you\u2019re ripped off at R30 a transaction, compared to, say, R7,50 on a Standard Bank card. The ATM charge on a Virgin card withdrawal, at R8,75, is also pretty high. <\/font><\/p>\n

So customers and potential customers should certainly be doing their sums and reading the fine print \u2014 as good consumers always should. But in a way, none of these comparisons matters fundamentally. The point is that Branson, with his gift for marketing and Virgin\u2019s talent for innovation, is going to shake up two industries that could certainly do with it. <\/font><\/p>\n

There clearly is something wrong in a cellphone industry in which charges are demonstrably higher than they are in many other similar markets \u2014 and whose regulator seems reluctant to take action on pricing. We\u2019ve already seen the cellphone operators respond to Virgin\u2019s entree by cutting and changing some of their tariffs. <\/font><\/p>\n

And for SA\u2019s banking industry, the entree of a new credit card competitor can only be a healthy sign that market forces are helping to keep the industry honest, countering any notions that it\u2019s not a competitive industry. <\/font><\/p>\n

That\u2019s particularly important right now, given that bank charges are under scrutiny at the Competition Commission. Virgin\u2019s entree could well prompt more innovation and greater price competition in a market that is already fiercely contested. That\u2019s good for consumers. It\u2019s good for banks, too. <\/font><\/p>\n

INet-Bridge ||\u00a0 <\/font>Discuss this article<\/font><\/a> <\/font><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

NOT only is he a showman of note, but Virgin\u2019s Richard Branson is also refreshingly rude. Both traits have been on display in SA lately as Branson has launched, in quick succession, cellphone offering Virgin Mobile and the Virgin Money credit card. <\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-549336","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/549336"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=549336"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/549336\/revisions"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=549336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=549336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=549336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}