Vodacom slashes prepaid call rates

South Africa’s largest mobile operator is chopping prepaid call rates, barely a week after Cell C stepped up the price war with its bigger rival. By Duncan McLeod.

Shameel Joosub

Shameel Joosub

Vodacom has just thrown down the gauntlet to its competitors, signalling that it won’t take attempts by rivals to take away market share lying down.

The mobile operator, South Africa’s largest, has announced it will take an axe to the cost of voice calls: from 10 February — this Sunday — it will cut prepaid rates to R1,20/minute to all networks. The calls will be charged for on a per-minute rather than a per-second basis.

In addition, on-network calls between Vodacom subscribers will be charged for the first three minutes only at the R1,20/minute rate, after which the rest of the hour will be free. The new price plan is called Vodacom Daily Free Calls.

Vodacom’s aggressive move comes just a week after smaller rival Cell C — headed by former Vodacom boss Alan Knott-Craig — moved to offer prepaid customers free value for recharging.

Cell C customers who recharge with R100 of airtime, for example, are offered 150 free Cell C to Cell C minutes, 150 on-network SMSes and 150MB of data for use within seven days. The operator is even offering unlimited free on-network calls for 30 days for those who recharge with R500 or more.

Vodacom’s new plans are part of what it’s calling “Free4Sho”, a product portfolio that offers “guaranteed free benefits to customers”. It hinted at the new products in newspaper advertisements at the weekend.

The new plans are not promotional in nature, meaning they have been filed with the Independent Communications Authority of SA, and any future changes to these rates will require regulatory approval.

“Customers will pay as little as 6c/minute, and this not a promotional offer, it’s a brand new prepaid price plan suitable for customers who make longer calls,” says group CEO Shameel Joosub.

For on-network calls, if a call exceeds an hour, the first 3 minutes of the second hour is billed at R1,20/minute and the rest of the second hour is free.

Prepaid customers who want to sign up for the new plans must dial 1181 or dial *111#, select FreeChange and follow the prompts.  — (c) 2013 NewsCentral Media

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  • Jeeves

    The article does not say if the calls are billed per minute or per second.

    Still does not beat 99c.

  • http://www.techcentral.co.za/ Duncan McLeod

    Per minute (see second para).

  • http://twitter.com/rmaclean Robert MacLean

    And yet, no major changes to contract customers – the impression from all networks I get is being a contract customer is being a second class citizen. If I want great deals that get better all the time – prepaid is the way to go :(

  • Jeeves

    You get a FREE cellphone when you renew your contract. Pre-paid users don’t get free phones.

  • coolkudu

    This means Vodacom felt some pain due to CellC rate cuts. Else there was no need to respond like this. I am sure MTN will also respond sooner or later. 8ta will follow. Then what will Cellc do? Will they still get the volumes to remain alive? I think the market is financially big for only 3 players if the costs are cut massively. Look at what is happening in India, operators went down in a price war, and now all of them are hiking the prices. Still a long way to go in SA though.

  • Jeeves

    MTN (My Thursday Network) re-launched their free calls on Thursday promotion.

  • BritinSA

    Cell C
    99c per min, anytime, to any network, per second billing with Supacharge benefits.

    Vodacom
    1.20 per minute any time, to any network, per minute billing, (talk for up to 57 mins free – IF – you are calling another VC sub) Otherwise nothing extra.

    MTN
    Who knows? Mahala Mystery Tour. R2.5 plus is real-world likely.

    8ta
    Wow! Has anybody noticed that they have quietly removed the old 1.50 anytime, anywhere rate?

    Their new prepaid rate sheet looks almost exactly like MTN & VC! When did that happen??

  • Jeeves

    MTN has Mahala Thursdays.

  • Gary

    competition benefits the consumer greatly. Wish I could say the same for Telkom, hope wireless kills them in future.

  • Wonga James

    Be that as it may, you are locked on a 24 month contract upon getting that subsidized phone, prepaid offers the flexibility to move with who ever offers the best value at any given time

  • Anti_Trust

    funny how unethical they can be … you have to dial in and make the changes, not that it is done automatically for everyone. In other words there is a big splash in the so called marketing tat we are cutting costs but the majority wont know that they must dial in. So indirectly they are screwing their customer base. They did this with the per second switch over also. As Cell CEO said STOP SCREWING YOUR CUSTOMERS VODACOM !!!!!

  • BritinSA

    Jeeves, unless you ONLY make calls on Thu, you must realise anything called Mahala from MTN is a fig-leaf for their outrageous prices

    Liberate yourself. Port to Cell C and say hello to low prices.

    You can always go back to MTN if it doesn’ t work out for you.

    My friend, who ported from MTN to Cell C, never stops thanking me for talking him into it & keeps on about how much he is saving.

    Heh, and we havn’t even talked about 99c international calls either!

  • BritinSA

    Jeez Jeeves!

    There is NO such thing as a FREE LUNCH!

    ‘Contracts’ are financial servitude, with 2 year sentences (but pay to get out of gaol cards).

    At the end of your sentence, you are bribed with some phone, and happily ‘ go back inside’ for another 2 years.

    You’re a gaol-bird…

  • Nicki de Wet

    “In addition, on-network calls between Vodacom subscribers will be charged for the first three minutes only at the R1,20/minute rate, after which the rest of the hour will be free.”

    “For on-network calls, if a call exceeds an hour, the first 3 minutes of the second hour is billed at R1,20/minute and the rest of the second hour is free.”

    So What the Hell is it actually? Very confusing article for me

  • coolkudu

    Sorry man, but are you from Cell C? cant help asking after reading this comment..”Liberate yourself. Port to Cell C and say hello to low prices.” :-)

  • ixhd

    They could give away R1mil if you can get a call to stay connected into the second hour, with zero risk.

  • http://twitter.com/RogueCode Matt

    I’ve never been happier than with Cell C.
    Seriously, they are cheap and actually really good.

  • BritinSA

    Nope, retired and watching the pennies.

    I go where the best deal is. I mean I use Neotel as a landline!!

  • The Spark

    Uhm. Isn’t Cell C 99c to all networks? And per second so you pay 99c/60 per second?

    Another FAIL by VODACOM

  • Dave

    The swap to per minute from per second nullifys the so-called price drop. Vodacom are so dishonest, another epic fail from a greedy rip-off artist of note. Can’t be believed ever!

  • The Spark

    100% correct

    You’re tied into a 24 month contract so they don’t give a hoot. They just sweeten the deal when it comes up for renewal by giving you a “free” phone (which you actually pay for) and the customers fall for it hook line and sinker every time.

    I have a Cell C Top Up month-to-month contract (i.e. I can cancel at a month’s notice) For R200 I get 200 anytime minutes to any network, 200 smses/mmses, 200MB of data. Once that’s finished, if I need to, I can pop to my online banking and load more cash on. And then it’s 99c per minute from then on.

    Don’t know how much you talk in a month, but I don’t do more than 3hrs 20mins in a month. I also don’t do 200 smses. The 200MB may be a little tight if I do a lot of surfing, but if that is recurring, I have the option to bolt on more data for R15 for 50MB.

    I’m not complaining.

    I do know that Vodacom sucks sh!t though.

  • http://www.facebook.com/profile.php?id=647483241 Archie Makuwa

    85 cents per – current promotion extended for another month or so…

  • http://www.facebook.com/bowersza Christian Bowers

    Interesting shake-up in the market. I agree with Robert MacLean that contract customers are second class citizens and realize no cost savings from the operators when these specials are launched. i do understand why, and i will definitely not be renewing my contract at the end of the term.

    It’s all well & good having free “on-net” calls, but with MNP (mobile number portability) it’s increasingly difficult to tell who’s on your home network. Are there apps or websites that do this? I think that flat fees to all networks offer true savings… How many people will first check the destination network before calling? And without this functionality (i stand corrected), it does not assist the end user in managing their costs and realizing the true benefits of these specials.

  • http://twitter.com/rcgmobi Richard Nobody

    Remember a contract customer has to subside for his handset :) If you not happy how they do business with contract users, then purchase the smartphone outright. Contract customers won’t ever benefit from such promotions that’s why many people buy their handsets outright to take advantage of the many promotions that are out there on offer. Example you can get SIM Contract on 8ta unlimited phone calls to any network in South Africa :)

    They just brainwashing consumers to stay with them. I am happy with CELL C and if that means I have to buy a phone that can carry 3 simcards so be it. Competition and tension is grown at a rapid rate.

  • http://twitter.com/rcgmobi Richard Nobody

    That’s correct and remember that contract users have to subside their own phones they decided to get on contract cause the networks put the money upfront while they receive their monthly portion from the customer.

  • http://twitter.com/rcgmobi Richard Nobody

    That’s why if you recharge you get free airtime but you’ve to migrate to that package if you on the old package cause you would receive free complimentary minutes every time someone phoned you. So 8ta were running at big substantial loss to promote their network. and it worked to such an extent.

    65 cents land line rentals

  • stannsh

    Folks,

    This is a massive move by Vodacom. I don’t know about you all but I am a big Cell C fan/subscriber.

    I have been enjoying the amazing data from Cell C (15c/mb), 99c calls, 85c international calls (*promo-to the UK, etc) AND even R2.25/min call to Zim (between 8pm-7am *I have a Econet Call Home sim-powered by Cell C).

    However MOST of my friends- about 80% at are on Vodacom. So whilst I have been converting friends to Cell C bit by bit, people are resistant to change.

    This is a great deal to me when I make PEAK calls to Vodacom numbers equal or greater than 4 mins long (At the 4th min, the on-net call is (R3.60/4=) 90c/min and gets cheaper the longer I talk. If it is less than 4 mins, then Cell C’s 99c is still a way better option.

    This is a great deal when I make OFF PEAK calls to Vodacom numbers greater or equal to 8 mins. (At the 8th minute, the on-net call is (R3.60/8=) 45c/min and gets cheaper the longer I talk. If it less than 8 mins, then 8ta’s off peak rate is better at 49/cmin* to ANY network, assuming you have recharged with R50 as you would have gotten R50 free airtime and off peak calls on 8taMore are 98c/min which translates to 49c when your airtime is doubled.

    I would really appreciate catching up with my Vodacom pals on them long calls.

    My point is- this is not an unnoticeable move. I have a triple sim LG phone and will be enjoying all these benefits from Cell C/8ta/Virgin and now *Vodacom! (*2nd phone applies. lol). I have no time for MTN!

  • BritinSA

    I was with 8ta for voice calls for about 3 months (ported from Vodacom) attracted by the credit program.

    When Cell C started the 99c for real – I was off like a flash. (Don’t ya love porting!)

    FYI: The 8ta VOICE network in my area, (a.k.a. MTN) was AWFUL! Actually unusable most of the time. Cell C, otoh, works well, most of the time.

  • Guest

    “thrown down the gauntlet”
    I laughed so hard I almost fell off my chair

  • http://www.facebook.com/derik.debeer Derik De Beer

    “Vodacom has just thrown down the gauntlet to its competitors”
    I laughed so hard I almost fell off my chair. It’s like calling a Nokia 3310 a smartphone…

    “offer, it’s a brand new prepaid price plan suitable for customers who make longer calls”
    Newsflash : South African Prepaid Consumers “hate” making phone calls. They avoid it like the plague. The Prepaid SA version of making a phone call is sending a “Please Call Me” to the guy/gal with a Contract Phone.

    “Customers will pay as little as 6c/minute”
    What is curiously missing is the fact that you would have to stay on the line for the full hour to get this spectacular rate. Perhaps the only way to get this amazing rate would be to call the Eskom Call Centre…

    This is what happend if you replace a South African born CEO with a foreign CEO.

  • http://mediatraining.co.za Erich Viedge

    If I remember right, per minute billing comes in at 30% more expensive than per second billing. So the effective rate for Vodacom pre-paid is around R1,50 a minute — 20 US cents a minute. It’s extortion. I don’t know why people get excited about this. It’s extortion of people who don’t qualify — or don’t want — contracts.

  • Pingback: What if the Emperor had no Spectrum? | SwimGeek

  • http://www.facebook.com/ivor.vanrensburg.7 Ivor van Rensburg

    Pay for 3 minutes and the rest free ??? what a joke … What is the longest you’ve managed to stay connected without the call being dropped ? So, everytime the call drops, you pay another 3 minutes ???

  • http://www.facebook.com/ivor.vanrensburg.7 Ivor van Rensburg

    Oh, and Cell C offers all these wonderful discounts but they don’t have coverage … another hoax

  • http://twitter.com/rcgmobi Richard Nobody

    Vodacom feel threaten by CELL C which is a good thing cause then other network providers will respond. So far 8ta unlimited has the best deal which will expire soon but unfortunately I have no use for that cause I won’t benefit.

  • http://twitter.com/rmaclean Robert MacLean

    Only partially accurate – remember that the store has the phone already. They have paid Samsung etc… for that already, regardless of if it is put on a contract or just bought out right. So while you are correct in the process, it isn’t really a major issue for the networks as it builds off the retail pipeline.

  • http://twitter.com/rmaclean Robert MacLean

    You should see the difference if you take a contract with a phone versus without. It isn’t free at all & I would argue in the new phone space they amount you pay on contract is vastly more than buying it outright.

  • http://twitter.com/rcgmobi Richard Nobody

    Remember some franchise stores pay for the smartphones and sometimes they don’t want to be stuck with the stock. Example they bought 50 Red Berry phones but they not selling only the blue phones are moving. Unless they get the telephones on a consignment.

    Only flagship stores have stock of mobile phones. Sometimes franchise stores have to put in a special order specifically for you

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