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By Moneyweb

Moneyweb: Journalists

Capitec aims to disrupt mobile market with data that doesn’t expire

And is sold at a single price per MB whether clients buy small or large amounts …

Capitec has taken the wraps off its own mobile virtual network operator (MVNO) – Capitec Connect, which uses the Cell C network, which itself roams on MTN.

The fact that its data never expires – provided the SIM card is used at least once every six months – is likely to upend the market. Operators traditionally sell data bundles with validity of up to 30 days.

Data rates are also flat-rated, meaning that large bundles (1GB) are priced at the same per megabyte as smaller bundles, such as 100MB.

Rates are R45 per gigabyte (GB), which the bank says is “on average 50% below the market price”.

This equates to R4.50 per 100 megabytes (MB) or 4.5c per MB. There is no out-of-bundle pricing.

Playing fair

Operators have long been criticised by regulators for pricing larger bundles at a lower effective rate per megabyte than smaller ones. This means lower income customers tend to pay more per unit of data than those with more disposable income.

On Capitec Connect calls are charged at 90c per minute and SMSs cost 25c.

“South Africans have been complaining about the cost of data. It’s expensive and complicated,” says Capitec CEO Gerrie Fourie.

“Bundle pricing, off-peak and peak rates, and the fact that your data expired are all things that make no sense.

“We’re changing this by giving our clients access to a mobile solution that is simpler to understand, much more affordable and can be recharged easily on our digital channels,” he adds.

“Our vision is to bring connectivity to all. We want to help create opportunity for everyone to be able to connect with access to affordable data and digital banking anywhere, anytime.”

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The entry makes Capitec the third bank to launch an MNVO, following FNB (launched in 2015) and Standard Bank (2018). Both of these use Cell C’s network.

Retailer TFG launched its own MVNO (TFG Connect), which piggybacks on MTN, this month. Although marketing it to customers, it has not officially announced the proposition.

Mr Price was the first retailer to enter the mobile market, launching its MVNO (also using Cell C) in 2017. The group said earlier this year that its revenue from financial services and telecoms topped R1 billion in the 2022 financial year, out of total revenue of R28 billion.

Supermarket groups Pick n Pay and Shoprite (k’nect) have also entered the MVNO space. Both efforts have been fairly muted, although Shoprite has been offering double the recharge value as a promotion to customers who do so with its new bank account, the Money Market Account.

Connecting with Capitec

Capitec Connect SIM cards are available at the bank’s branches and are only for Capitec customers – in other words, you need an active Global One account.

Airtime and data bundles are only available on the bank’s own channels (app, internet banking and USSD). Clients can get up to 5 SIM cards linked to their profile.

Given that it is a prepaid product, Capitec Connect does not allow international roaming.

The bank says “international call and data rates are expensive” and that customers should “rather buy a SIM in the country you are travelling to … the call rates will be much lower”.

There is no tie-in to its Live Better rewards programme yet, but this will surely be integrated once the rollout of Capitec Connect has been bedded down.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.

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