Cell C to Raise Price of WhatsApp Bundle

South African operator Cell C has announced that on 1 February it will increase the price of its WhatsApp bundle from ZAR 12.00 (US $0.97) to ZAR 15.00 (US $1.22), according to a report. The bundle provides access to the OTT messaging and voice service for 30 days and has a fair usage limit of 600 MB.
 
The operator introduced a WhatsApp bundle in October 2014 as a promotion. When that promotion ended in August 2015, the company launched a WhatsApp bundle that cost ZAR 5.00 (US $0.41) a month, with a fair usage limit of 1 GB. In May 2016, Cell C raised the price of its WhatsApp bundle from ZAR 5.00 to ZAR 7.50 (US $0.61) but increased the fair use limit to 1.2 GB. On 1 February 2017, the operator raised the price of its WhatsApp bundle from ZAR 7.50 to ZAR 12.00 per month; on 1 October 2017, it lowered its fair usage limit to 600 MB.
 
Zero-rating is one of the strategies mobile operators have employed to deal with the competitive challenge presented by OTT players like WhatsApp. By discounting data for the use of a free (or nearly so) messaging and voice service, MNOs have been able to recoup some of their lost business, as well as mitigating the harm done to their customer relations by essentially bringing the OTT apps under the aegis of their brands. Offering better deals on messaging data has also been a way for operators to gain a competitive edge against each other.
 
In the case of Cell C’s WhatsApp bundle, we see a trend of raising prices and falling included-data limits. First offered on a promotional basis, the bundle became long-term. What we can conclude from the changes in pricing and data allowance is that over the past several years, Cell C’s plan to incentivize customers to use more data on WhatsApp has been effective. Now, it is expected that having grown accustomed to doing so, that subscribers will now be willing to pay more for the packages; the February 2017 increase almost doubled the price, and the current hike, while less drastic, is still substantial.
 
Furthermore, after slightly increasing the included data, Cell C then cut it in half, to 600 MB per month, and is keeping it there in the present pricing change. In short, the operator evidently believes that subscribers will be willing to purchase the package even if the data amount is significantly smaller. Most likely, with more overages occurring as a result, the operator will be able to derive more revenue from WhatsApp use.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

Cell C to Address Concerns Over Data Expiration

South African operator Cell C plans to tackle the problem of expiring mobile data, according to a report. CEO Jose Dos Santos said that the operator is committed to doing the right thing, following proposed changes to national regulator ICASA’s End-User and Subscriber Service Charter Regulations. ICASA (Independent Communications Authority of South Africa) wants mobile operators to warn customers when their data bundles are about to expire, to block automatic out-of-bundle billing for data, and to allow data bundles to last longer.

Under the proposed regulations, mobile operators Vodacom, MTN and Cell C will have to stop customers from continuing to use data and being billed after a bundle is depleted. The operators must also extend the validity of a data bundle if a subscriber loads a new one before their current one has expired, and must warn subscribers before their bundle expires.

As a general principle, it is a good idea for operators to “get out ahead” of impending regulatory changes, voluntarily changing their own behavior before they are actually forced to do so by law. Such an approach serves as a demonstration of goodwill to customers and therefore shores up loyalty and helps with retention. In addition, the operator that makes the change first achieves a kind of first-mover advantage in terms of public images, especially if the change involves something that is particularly dear to customers’ hearts.

Not running out of data and not being charged excessively are certainly in that category. If Cell C in fact implements data-expiration warnings and stops out-of-bundle billing, it will most likely get an image boost. Deferring making changes and waiting for the inevitable cannot genuinely help an operator in the long run. And speaking of the long term, by building customer goodwill on the subject of data use, operators will actually encourage greater data use, which stands to increase revenue more than a strategy that relies on hoping that customers will run out of data unexpectedly and then be charged for it.



Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

     

Cell C MVNO Deals Bring in 1 Million New Customers

Cell C’s partnership with MVNOs has resulted in 1 million new customers for the South African network operator. Over the last few years, Cell C has created a focused strategy to embrace sound partnerships with exceptional brands, it said. Cell C CEO Jose Dos Santos says this approach has allowed the company to grow its MVNO base substantially. He added that in a demanding market such as that in South Africa, customer-specific offers are essential to grow market share, and MVNOs bring much-needed competition and value to the telecommunications industry. Cell C has invested significantly in a sophisticated MVNE platform, which allows the company to launch MVNOs efficiently. The company believes it is currently the only mobile network operator in South Africa to offer a dedicated MVNE platform. In addition to the growth in the MVNO customer base, Cell C has also nearly tripled its total subscriber base in the last four years, bringing its to more than 24 million customers. Since 2006, Cell C has taken the lead in developing the MVNO sector in South Africa. While it ranks third behind Vodacom and MTN in terms of subscribers, it is the only operator in the country with a dedicated platform for MVNOs, of which there are currently nine. Among them is FNB Connect, which leverages the clientele of First National Bank (launched in 2015), and MRP Mobile (launched in 2014), which is offered by the retail chain Mr. Price. Their success is a reminder that MVNOs do best when they can bring a ready-made customer base and brand loyalty to the table and offer value-added mobile services that are related to their core businesses. Cell C’s first MVNO venture, a decade ago, was with Virgin Mobile, a successful U.K.-based global brand.  By offering not only access to its network but the full support system of an MVNE platform, Cell C has fostered the development of the South African MVNO sector, and lately the process has been accelerating, with four MVNOs launched in 2015 alone. The operator’s success shows clearly that establishing an MVNE business can drive significant amounts of revenue to an operator, and that taking the initiative to gain first-mover advantage can be decisive. However, we should note that Cell C’s success appears to have motivated one of its competitors, MTN, to go and do likewise; in mid-2016, the company announced that it, too, would begin hosting MVNOs. Cell C will now have to step its game up one notch more to meet this impending challenge.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. To learn more about Tarifica, please visit www.tarifica.com

Tarifica Global Insights Series

The pace of change in the mobile services industry is constantly accelerating. This means new opportunities will arrive faster than ever before and are likely to play out more quickly as well. Operators must watch carefully for these ‘waves of opportunities’ and quickly take advantage of them before they either become mainstream (and no longer have special value) or become obsolete as new disruptions impact the market.

The Tarifica Global Insights Series analyzes and reports on innovative practices in the development and marketing of consumer mobile plans. Each report describes a significant opportunity in mobile plan development and how operators are creating new plans in response to that opportunity. The series provides comprehensive, in-depth information that identifies best practices across more than 25 countries representing every region in the world, and enables operators to quickly and successfully take advantage of new strategies in plan development and marketing. The reports include case studies in multiple regions that describe best plan implementation and marketing practices that have enabled operators to quickly and successfully take advantage of new opportunities through innovative mobile plan development and marketing.

This series of reports is an important resource for operators that are searching for new and better ways to increase revenue and profits, desire to be perceived as leading edge ‘first movers,’ or need to defend their market share against disruptive offers from competitors. These reports enable operators to take advantage of Tarifica’s unique global vantage point to more quickly bring leading edge offers to market that capture new revenue opportunities.

The Tarifica Global Insights Series is an annual program comprised of four quarterly reports as shown below.

2016 Report Series 

QUARTER 1 (FEBRUARY 2016): Designed for Success – Developing Plans for the Youth and Student Demographic
 Globally, over half the world’s population is under the age of 30. While this percentage varies from country to country, the youth/student market segment has unique needs that must be understood in order to take advantage of this revenue opportunity. Moreover, when young people transition into adulthood and begin to make independent financial decisions, incumbency presents a unique opportunity for mobile operators to win long-term customers. This report will focus on the plans, promotions and other initiatives undertaken by operators to win and hold this key demographic.

QUARTER 2 (MAY 2016): Adapting to Changing Expectations – New Strategies for Pricing Smartphones and Pairing Them with Mobile Plans 
The practice of offering heavily subsidized devices tied to long-term plans no longer meets users’ needs for faster upgrades and shorter or more flexible contracts. As a result, operators are experimenting with numerous other models for selling high-end smartphones to their subscribers. This report will examine financing options, new phone replacement programs and other strategies aimed at helping consumers obtain smartphones and ramping up customers’ monthly mobile spend.

QUARTER 3 (AUGUST 2016): New Frontiers of Mobile Offerings –Partnerships with Streaming Audio and Video Services 
Operators around the world are exploring new revenue sources beyond mobile data. One approach is to partner with streaming media companies such as Spotify and Netflix. Mobile operators are increasingly offering plans with these services included or available as add-ons. This report will focus on the demographics and unique needs of this target market and their impact on plan structures, promotions, marketing practices and pricing. It will also analyze the differences among the various streaming services in terms of consumer perceptions.

QUARTER 4 (NOVEMBER 2016): Avoiding the ‘Dumb Pipe’ Trap – Innovative Approaches to Packaging and Pricing Data 
The decline in calling and messaging revenue has made many operators ever more dependent on data. This has made it difficult for operators to differentiate their offerings without lowering their per-GB price. Many mobile operators have been experimenting with new pricing models for their data to overcome this challenge. Among the many initiatives employed are offering time-limited data, having zero rated or dedicated data allowances for specific services/apps, offering rollover data, etc. This report will identify and analyze all of these tactics, with particular focus on their impact on consumer satisfaction, churn reduction and ARPU.

Analyst Support 

Every subscription comes with five hours of analyst support. Subscribers also receive one-on-one briefing sessions with Tarifica’s Analysts each quarter. Sessions, which include a Q&A format, are designed to help subscribers gain a further understanding of the strategies, innovations, trends and opportunities occurring worldwide in mobile plan development. A subscriber’s colleagues are welcome to attend these briefings.

Subscriber Benefits

The Tarifica Global Insights Series provides subscribers with two distinct layers of analysis:

First, the reports analyze how each service/strategy was deployed, branded and marketed. The reports dive deeply into every element of these plans (their included service volumes, one-time costs, recurring charges, restrictions, marketing campaigns, and more) to provide a comprehensive look at precisely how these plans are being designed and launched. This level of specificity is critical for operators seeking to create successful programs in their own market.

Second, these reports bring to bear worldwide examples and case studies analyzing the factors behind the success or failure of these new strategies. Subscribers to The Tarifica Global Insights Series will be able to learn from operators at the forefront of innovative practices and strategies. Subscribers will be able to view and compare many different versions of these strategies and understand the regional factors involved.

The Tarifica Global Insights Series provides meaningful business intelligence that can be used to design plans that decrease churn and win new customers. Each report evaluates the success/failure of strategies based on key performance indicators, assesses the ease/difficulty of replicating each approach and provides detailed sets of best practices for adapting the program to other markets.

The Tarifica Global Insights Series will facilitate subscribers’ efforts to increase revenue and profitability, gain market share, demonstrate innovative leadership and rapidly take advantage of new market opportunities.

Subscription Fee
The price for an annual subscription that includes all four quarterly reports, five hours of enquiry support and quarterly one-on-one briefings is US $15,000. The subscription fee will be reduced to US $10,000 for orders placed by 15 February 2016, representing a 33% early purchase discount.

About Tarifica
Tarifica is uniquely qualified to provide this series based on its singular focus on researching and analyzing mobile plans around the world. In maintaining the Tarifica Mobile Database, Tarifica’s research team tracks and catalogs every mobile plan, rate and offer from over 250 MNOs and MVNOs in 66 countries in every region of the globe. This effort enables Tarifica’s analysts to gain a broad understanding of the latest innovations in plan development occurring worldwide. With this new report series, Tarifica leverages this focus to highlight and analyze the most impactful strategies on a global level.

sales@tarifica.com

Tarifica

Cell C to Invest ZAR 8 Billion in LTE Network

South African mobile operator Cell C has said it will invest ZAR 8 billion (US $667 million) in building an LTE network over the next three years as it seeks to improve its position in the country’s highly competitive market. Cell C is South Africa’s third-largest operator. The MNO, which has partnered with Chinese vendors Huawei and ZTE as its primary network equipment suppliers, plans to deploy more than 4,000 LTE sites; however, it will continue to use 3G service in the country’s less populated areas. According to Cell C CEO Jose Dos Santos, the operator wants to ensure that every LTE site is linked to its fiber backbone in order to provide customers with the highest level of service.

South Africa’s dynamic mobile market has one of the most robust mobile broadband infrastructures on the continent, despite its lack of LTE licensing due to a year’s delay in spectrum allocation. According to recent reports, all of South Africa’s operators have been making heavy investments in mobile networks. In addition to Cell C’s ZAR 8 billion deployment, Vodacom, which has the largest number of LTE sites (about 2,000 stations), is investing ZAR 8.5 billion (US $708 million) in its network. MTN currently has 1,000 LTE sites and it is investing ZAR 10 billion (US $833 million) to improve its grid. This amount almost doubles MTN’s capex in 2014. Telkom has around 1,300 LTE sites and a very extensive fiber network.

We believe it is not only smart but also necessary for Cell C to invest in LTE infrastructure. As the demand for data services continues to increase in South Africa, we will not be surprised to see all of the country’s operators making further investments. As South African consumers experience their first access to the internet, spurred by the uptake of affordable smartphones, and learn that mobile data can be used to access financial services as well as information and entertainment content, their demands for larger data packages are increasing. Additionally, South Africans’ increased use of OTT services has led to the need for larger data allowances. While mobile packages that satisfy users’ demands for larger data allowances will bring in revenue for the country’s operators, there is the risk that this demand will outpace investment. So while Cell C is trying to bring its level of LTE deployment up to that of South Africa’s other major MNOs, its strategic rollout, particularly in heavily populated urban areas, is a good way to justify and receive a better rate of return on its investment. As time progresses the country’s operators may engage in network sharing as a way to build out infrastructure in rural areas.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: Click here.

MTN South Africa CEO: No “Free Ride” for OTTs

Ahmad Farroukh, the CEO of MTN South Africa, in a conversation with reporters this week characterized the current relationship between OTT service providers and mobile operators as “unfair”—meaning that MNOs spend huge sums of money creating and maintaining mobile networks, which OTTs then use to take business away from them. In particular Farroukh expressed skepticism about competitor Cell C’s decision to offer its customers free data for the popular messaging service WhatsApp (as a promotion next month). “We are not saying we have to deny OTTs access, but the OTTs should be fair,” he said. “This access has a cost.” Farroukh says that while he does not believe that the cost should necessarily be paid directly by the OTT providers, some kind of global-level must eventually be worked out, perhaps through the GSMA, the organization that represents all mobile operators. Writing in these pages about the developing OTT challenge, we have often stressed the need for MNOs to accept the inevitability of OTTs’ appeal to consumers and do their best to embrace the phenomenon rather than fight it. MTN, for one, is most decidedly not taking that approach. Farroukh is right to draw attention to the imbalance in the equation whereby operators make all the investment in the networks without which OTTs cannot function, while the OTT players themselves make none. Farroukh’s pugnacious attitude is apparently shared by a number of MNO decision-makers; he recalled a recent forum in Dubai at which representatives of international operators and OTTs almost came to blows. What action could be taken by MNOs that want to fight? While OTT executives have gone on record accusing MNOs of restricting freedom of expression, Farroukh is not suggesting that mobile operators ban OTTs from their networks. Such a policy would be difficult to implement in any case. Nor is he insisting that MNOs try to get OTTs to pay for access on an operator-by-operator basis. Wisely, we believe, he is simply urging his fellow MNO executives to work together to put pressure on OTT players—which after all are fundamentally dependent on mobile networks—to reach some sort of agreement, presumably to defray the costs of infrastructure development or otherwise even up the ledger book. What form that arrangement will take is still unclear, but if the Farroukhs of the mobile world get their way, operators will be able to do better than simply collecting revenues from OTT-induced data consumption. The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Telkom Mobile and Vodacom Receive the Highest Tarifica Scores Among South Africa’s Mobile Operators

 Tarifica Scores for all postpaid mobile plans in South Africa are out. The Tarifica Score is an advanced algorithm used to evaluate mobile plans based on the value they offer consumers. Overall, the top two plans were Vodacom’s Smart S (with the +1GB data promotion) and Telkom Mobile’s Completely Unlimited plan, (with-phone version). In the analysis, plans were divided into five segments corresponding to their monthly costs, as follows: under R100, R101-R300, R301-R500, R501-R1000 and more than R1000. Each segment was further split into “With Phone” and “Without Phone” categories – creating 10 segments in all.

“Telkom Mobile’s plans stood well above those from other operators. It offered the best plan in four of the 10 market segments, and had competitive plans in several others. This success was largely driven by the company’s relatively low prices and generous data allowances,” stated Melissa Mascarenhas, Research Analyst at Tarifica.

As for other operators, while Vodacom was able to land one of the top overall spots with its +1GB promotion for the Smart S plan, it was only able to capture one other market segment (under R100 per month without phone). Comparatively, Cell C scored quite well in the mid-priced plans, winning three of the four segments between R301 and R1000, while MTN and Virgin Mobile struggled in most categories. But the latter was at least able to win the honors for best plan that included a phone for under R100 per month.

Tarifica Scores were calculated for every postpaid plan across all the major players in the South African mobile market. These scores provide objective, quantitative comparisons of mobile plans based on a consumer value-oriented approach. The Tarifica Score takes into account factors such as plan allowances (minutes, SMS, MMS and data), network speeds and value added elements, including data sharing, international calling allowances and roaming benefits. It is designed to produce clear apples-to-apples comparisons even in cases where plans appear quite different on their surface, thereby helping consumers understand which plans offer the best value for the money.
Compared to its competitors, MTN’s plans simply did not measure up. Not only did the company fail to win a single market segment, but the majority of its plans were ranked near the bottom of their respective groups. This poor performance was driven by a combination of relatively slow data speeds, high costs, limited features and low allotments. “In analyzing the market, we were surprised that so many plans from the largest operator provided such low value to consumers. We predict that as growing numbers of South Africans adopt more data-heavy usage habits, as is expected in the near future, MTN will either be forced to radically rework its plans or experience significant customer loss,” said Kenneth Dolsky, Tarifica Senior Program Director.

In today’s mobile marketplace, consumers are forced to weigh many factors against cost when purchasing a plan, including allowances for minutes, text messages and data, and the speed and coverage of the operator’s network. Operators are also constantly introducing new offers, special features and promotions that serve to further complicate the decision-making process. The Tarifica Score enables consumers to cut through the clutter and identify those plans in every market segment that offer the best value for the money.
Tarifica Scores were calculated for all the published plans offered by Cell C, MTN, Telkom Mobile, Virgin Mobile and Vodacom. Plan scores are available upon request.


Tarifica, a unit of T3i Group, has been the leading provider of telecom pricing information for close to four 
decades. It maintains the most robust, in-depth and up-to-date pricing database in the industry, which 
includes mobile and fixed line rates from over 400 operators in 85 countries, as well as historical data 
going back to 1997. Tarifica also produces reports, surveys, publications and custom analyses. Its clients 
include operators, regulators, enterprises and consultants in every region of the globe. For more 
information, please visit www.tarifica.com.