8ta rethinks prepaid

The new tariffs are not a reaction to Cell C's recent price cuts, says senior managing executive Amith Maharaj. By Duncan McLeod.

SA’s fourth mobile operator, Telkom-owned 8ta, is upending its prepaid tariff model, ditching the plans it’s had in place since its launch nearly two years ago and introducing new rewards-based tariffs clearly designed to improve the loss-making brand’s average revenue per user (Arpu).

8ta senior managing executive Amith Maharaj says the new prepaid plans are not a reaction to Cell C’s recent price reductions and are the result of 12 months of planning and market research that shows customers don’t worry so much about how much they pay per minute for calls but rather the rewards they receive when purchasing airtime.

Under the new tariff plan, called 8ta More Prepaid, consumers will receive 20% “free” airtime, which they must use within seven days, if they recharge by between R10 and R29. Purchases between R30 and R49 will attract 50% extra airtime and those of R50 or more will get double the airtime. The additional airtime can be used for voice calls, SMSes, MMSes, data and BlackBerry subscription plans, although it can’t be used to load data bundles.

The extra airtime is valid from the moment of recharge and will be used up first. Up to R1 000 of airtime can be earned per day. 8ta More Prepaid will be launched on 12 August.

Maharaj says the new product is the result of intensive market research that shows there is “generally low awareness” among consumers of what they pay for their calls. “The typical South African doesn’t know what they pay per minute,” he says. “Rather, what they want is instant gratification.”

The new plans should help 8ta lift Arpu, where it trails its bigger rivals.

“Our new offer cuts straight through the clutter in the market around prepaid rewards and provides customers with free airtime they can bank on,” Maharaj says. “All the customer has to do to instantly earn the free airtime is recharge with R10 or more. Therefore, the more you recharge, the more you get free.”

Maharaj says that after the launch of 8ta More Prepaid, the brand’s current prepaid plans will no longer be available. Under the current prepaid structure, 8ta customers are rewarded with airtime for receiving calls. Customers on existing tariff plans can choose to remain on them, or they can migrate to the new plan.

Under the new plan, peak-time calls to mobiles and fixed lines, which are billed per second, will cost R2,78/minute. Off-peak calls will fetch 98c/minute. SMSes and MMSes will cost 50c each, while data is billed at R1/MB.

As of July, 8ta had 2003 of its own base stations nationwide, up from 1 782 at the end of March. It has 1,5m active users on its books.

Telkom plans to spend as much as R2,5bn on the 8ta network in the current financial year, compared to R1,37bn last year. Some of this spend is being directed at a fourth-generation network based on long-term evolution technology.

Maharaj says 62% of voice calls are carried on 8ta’s own network. The figure for data is 93%. The rest of the traffic is carried by roaming partner MTN SA.  — (c) 2012 NewsCentral Media