I did a snap poll to see if any of my friends had signed up with Heita, Telkom’s new-ish cellular offering, also known as ”8ta” because you get an ”081” dialling prefix. ”Frankly, I’m too scared — I’m going to wait and see,” said one. ”Do they do BlackBerry?” asked another. (They don’t.)
South Africa’s newest cellphone operator may have a job making an impact in a perhaps oversaturated market, clever ad campaigns notwithstanding. But size helps. Heita claims to have about 200Â 000 contract customers already, so it’s a force to be reckoned with. And its low-cost offerings have its competitors scrambling.
”When Cell C entered the market, with low call rates, it didn’t make quite the impact hoped for because it was too small. But with both Heita and Cell C offering a call rate of R1,50 per minute, the market had to sit up and take notice,” says Arthur Goldstuck, MD of WorldWideWorx. ”Vodacom released its new prepaid package price shortly thereafter — R1,40 — which is now the cheapest rate on the market.”
Competition is always good for consumers, so Heita has already given customers more choice. It’s also greatly simplified billing, because it doesn’t have peak or non-peak times; day or night, it costs R1,50 per minute to call another network.
Calls to landlines will be charged at 65c per minute, which is about 60% cheaper than market rates for a similar call. Of course, if you don’t make many cellphone-to-landline calls, that saving won’t mean too much to you.
What might appeal, though, is that prepaid customers will receive free talk time to any network each time they receive calls from a cellphone: one free second of airtime for every three seconds of call received (that’s an introductory offer, though, and it’s unlikely to last much beyond falling interconnect costs).
Heita has made much of its flat rate of R2,50 a minute to over 100 international destinations, but MTN charges R1,19 off-peak on MTN Call Per Second and a flat rate of R2,40 on MTN Zone, so this is not quite the unique offering it purports to be. Heita has also promised that if you send five SMSs a day it will give you 50 bonus SMSs at no extra cost to use on the same day (both prepaid and contract customers can benefit).
Heita packages include handsets and this could be tempting — for example, you can get a free HTC Smart with a R1Â 000 gift card on Contract 1, or a free Sony Ericsson X10 Mini Pro plus a Nokia 5031 on Contract 2. You’re tied in for 24 months, though, so be very sure you want to be locked into a contract. And unless you’re going to pass on one of the phones, you don’t really need two phones. But families might well appreciate this offer.
Comparing apples with apples … sort of
Comparing network offerings is mighty difficult because you’re really not comparing apples with apples. Let’s use the 100-second phone call (the average call length) as a benchmark. Heita charges R1,30 for a call to a Telkom line, R3 to other networks and R3 to Heita (this is a per-second billing rate).
How do other networks compare?
Cell C charges R1,25 to another Cell C customer and R1,67 to other networks in terms of the Family Off-Peak option. Off-Peak rates to Telkom, Cell C and other networks are all R2,16.
Cell C’s default rate on prepaid is the R1,50 flat rate (same rate applies regardless of the time the call is made or to whom the call is made, so there’s no peak/off-peak differentiation and you can phone any cellphone or landline). This compares favourably with competitors. Customers do have the option to change their billing rate. Cell C was the first network to introduce a flat rate, allowing customers to pay the same rate at any time of day or night.
Virgin Mobile has a unique set of tariffs. Rather than a ”vanilla” flat rate or peak/off-peak structure, Virgin offers a flat rate with a drop-down rate that kicks in every day after five minutes of calling. For example, Virgin Mobile’s pre-paid rate (billed per minute) is R1,99 per minute but drops down to just 99c per minute after the first five calls or 300 seconds of calling per day.
On TopUp 99, Virgin Mobile offers one of the best rates in the market — billed on a per-second basis, customers pay R2,35 per minute for the first 300 seconds of calling per day and then drop down to only R1,55 per minute. Virgin’s on-net call rate is also low — 99c per minute (billed per second or per minute, depending on your main plan).
The Heita R1,50 per minute rate is comparable to the MTN One Rate Prepaid rate of R1,75 per minute. But it should be noted that the MTN rate is per-second billing, while Heita rates are billed per minute. So a 100-second call the cost using MTN One Rate would be R2,92 while the call on Heita will come to R3.
Heita has no other offering besides the R1,50/minute rate. Heita charges 65c/minute per call to Telkom lines. This is the equivalent of an On-Net call by MTN. The MTN fixed-line traffic volumes are minuscule, therefore very few of its subscribers would benefit from this offer. In terms of prepaid options, MTN’s off-peak, call-per-second rates are best — R1,98 to MTN, Telkom or other networks. And MTN’s One Rate offering charges R2,92 across the board, during peak, standard or off-peak times, regardless of the recipient.
Vodacom’s Talk contract packages differ but the cheapest 100-second phone call will cost R2,55, if you’re calling Telkom or another network, and R2,30 to call Vodacom (peak and off-peak). Customers using these packages also get up to 180 minutes for free to call other Vodacom customers on weekends.
Everyday Off-peak S off-peak rates are lowest of all, at R1,85 for a 100-second call to Vodacom, and R2,07 to other networks and Telkom. The Business Call per second package lets you call Telkom for R1,99, off-peak.
Top-up tariff rates vary but some packages let you call Vodacom for R1,75 during off-peak. The most expensive rate appears to be R4,50 during peak hours. So choose your top-up package wisely.
In terms of prepaid rates, Vodacom has packages for different types of users. Vodacom’s All Day per minute tariff is a very fine R1,40 per minute with a 100-second call costing R2,80. This compares to R2,83 on their AllDay Per Second tariff. On the 4U Prepaid plan, off peak rates are R1,86 to Vodacom and R2,16 to other networks.
Data costs and laptop deals
Prepaid internet customers can expect an out-of-bundle rate of R1 per megabyte and prepaid data bundles will cost 25c and upwards per megabyte. Its flat out-of-bundle rate of 30c is likely to be most appealing, though. Goldstuck points out that Cell C slashed its rates to 39c out of bundle first, leading to the advent of what could be some serious price wars.
But Goldstuck points out that Heita’s cheapest bundle price for broadband is no better than its out-of-bundle rate: R195 for 650MB on its Internet 1 package, as against R280 for 1,5GB on its Internet 2 package and R500 for 3,2GB. By contrast, Cell C charges R149 a month
on the 12-month contract or a once-off payment of R1Â 499 for 2GB of data a month, including a 7,2Mbps USB modem. 5GB can be purchased for R299 a month, with modem. So Cell C’s offering is definitely more affordable.
Heita’s laptop and netbook bundles are affordable because you’ll get a modem and data thrown in but pay much the same as MTN and Vodacom customers do for a modem and data only — the downside is being tied into a 24- or 36-month contract.
MTN has a range of laptop deals which include free USB modems and monthly data starting from as little as R189/month to R659/month on a 24-month contract. MTN says it doesn’t offer 36-month contracts as this is forbidden by the Consumer Protection Act (CPA), which is due to launch in March this year. The 36-month contracts make the cost per month lower but the total commitment to get the laptop is much higher than that of MTN.
And according to Ookla’s netindex, Cell C is the fastest ISP. Its launch speedstick offers are incredibly affordable by the MTN network.
Is Heita greater? Probably not. But if it paves the way for more industry-wide price reductions, that’s undoubtedly good news for the consumer.
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