Wednesday, January 14, 2015

South African Startup Offers Unlimited Data Package

A new South African company, DATA SIM, has launched a data-only SIM card offering, with unlimited internet browsing, social media access, Skype calling, and file downloads, for ZAR 149.00 (US $12.93) per month. The service is available on a month-to-month basis, with no contract, and there is no throttling of data speeds. The SIM cards also allow tethering but block certain services such as YouTube and movie and music downloads. DATA SIM claims that its service is provided via MTN’s 3G and LTE networks, although MTN has denied that it has any relationship with the company. In a statement to a South African news website, MyBroadband, DATA SIM founder Saeed Moosa said that his company has partnered with an unnamed entity that has an MTN access point name (APN).

As data overtakes voice and SMS as the key mobile commodity, demand for data-only offerings is on the rise. Especially in developing markets, data SIMs are very attractive due to their low prices and flexibility. By offering unlimited, un-throttled access, DATA SIM is presenting consumers with an appealing product, and its aggressive pricing could very well establish a niche in the marketplace for the new company. The high data speeds are achieved at least in part by eliminating certain services that can use too much bandwidth. The low price, however, appears to have been achieved by a strategy that is innovative but risky—the use of a third-party reseller to gain access to the network of a major MNO. MTN South Africa’s chief enterprise officer, Alpheus Mangale, said, “MTN can categorically state that it has no working relationship with this entity [DATA SIM], and neither has it endorsed a product offered by this company,” and advised consumers to exercise caution before subscribing to DATA SIM. So even if the use of a reseller’s APN turns out to be free of any legal complications, DATA SIM may have trouble attracting enough customers if MTN’s warning is taken seriously by the South African public.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week or to contact the Tarifica Research department:

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