/ 31 August 2018

Low mobile data prices forecast

(John McCann/M&G)
(John McCann/M&G)

After years and years of complaints by South Africans about high data prices, new offering Rain Mobile is likely to shake up the market with prices as low as just 16% of that of established providers.

With prominent business leaders Patrice Motsepe, Michael Jordaan and Paul Harris as lead investors, Rain’s low-price offering may force the big four mobile networks — Vodacom, Cell C, MTN and Telkom — to offer more competitive data prices, an analyst says.

“For instance, Vodacom offers 2G for R149; previously this was the price of 1G. It also has tailor-made Vodacom-4U products, which is based on an individual’s data and voice-call usage,” says Onkokame Mothobi, senior researcher at ResearchICTafrica.net (RIA).

“In order for operators to keep market shares, the big four will have to respond to Rain’s offers because it is offering cheaper services than most South African players,” he adds.

A 100MB bundle costs R5 with Rain; Cell C, MTN and Telkom charge R29. Rain’s 500MB bundle costs less than half of Telkom’s 500MB bundle. According to RIA, Rain charges R50 for a gig of data, whereas Vodacom, MTN and Cell C charge R149 and Telkom R100.

Rain, which was launched in June, has rolled out more than 2 000 towers in the past 18 months and plans to reach 5 000 within the next three years, Rain spokesperson Nadine Arnold says.

“Rain’s coverage is currently available in most metros throughout South Africa,” she adds.

The company has not disclosed how many subscribers it has but it claims it is the fastest-growing 4G data network.

At present, Rain is offering data only. It does not include a voice option. Users buy a once-off SIM card on Rain’s website, which is delivered within five working days, according to Arnold. “We have plans to dramatically improve in the coming months.”

“You only pay for what you use at the end of the month. No contract. No bundles. No expiry of data,” she says.

Once registered with Rain, you can receive up to 90 days free unlimited data with packages, including a SIM-only, which costs R120. Other deals cost between R850 and R4 600, and these include a Huawei mi-fi, a modem that connects to any mobile electronic device. These also come with 30-, 45-, 60- and up to 90-day free data deals.

Once you reach the end of your free data, if you wish to cancel your contract with Rain, there are no costs, according to its website. The SIM can be activated with WhatsApp, Facebook Messenger or Skype. Customers can order up to three SIM cards and give each a unique name.

Last year alone, Vodacom, MTN, Cell C and Telkom generated a combined R150-billion in revenue, according to a 2018 study by RIA.

The study notes, in terms of prepaid mobile 1GB data prices, South Africa is ranked at 35 out of 49 African countries. The study found a gig in South Africa costs seven times that of a gig in Egypt and nearly three times that in Ghana, Kenya and Nigeria.

The ANC recently expressed concern about escalating data prices and said the government and mobile operators should finalise policy and regulations in collaboration with the Independent Communications Authority of South Africa.

Do Rain’s claims hold water?

Although Rain’s product offering sounds like a response to #DataMustFall, not all South Africans know about the new entrant.

“Never heard of it. How does it work?” asked @IamNkomose on Twitter.

“Excellent coverage in the main centres, lightning speed (35-60 mbps), and very user-friendly web interface,” tweeted @MarJooste.
“I struggled a bit with device compatibility on Mac but Michael referred me to Kartik and team who sorted it quickly.”

@Khonaye99 expressed satisfaction with the service but pointed to issues with the network coverage. “I have tried it out —it works but my only criticism is the inconsistent network. I had network 80% of the 15-day free unlimited days, which was a bit annoying.”

Mail & Guardian reader@ToxicSocMediasaid they were happy with the service. “It’s changed the way I work completely. I only use the off-peak feature since I have ADSL at home. I have replaced my work connection with Rain and now enjoy a 30 Mbps connection all to myself. Coverage has been very good in metro areas.”

But at least one customer was not impressed. “I ordered a SIM. They stuffed up the delivery,” said

Another user,@q_daniel, also experienced problems receiving the SIM, but was otherwise content. “Some delivery issues. But once received,very good.” 

Thulebona Mhlanga is an Adamela Trust business reporter at the Mail & Guardian