Capitec has taken another shot at SA’s telecom industry, offering new large data packages at half the normal rate.
On Wednesday, the bank announced that its mobile unit would now be offering a 10GB prepaid data bundle priced at R199, through its Capitec Connect unit. The bank says it has launched “a new offering providing larger data bundles at more than 50% less than the standard industry prepaid rates”.
Capitec Connect is a mobile virtual network operator (MVNO), a market that includes Standard Bank Mobile, Mr Price Mobile and previously Virgin Mobile.
The largest player in the space is rival bank FNB, with close to
1-million customers. Capitec says it has issued over 1-million SIM cards since its launch in 2022.
MVNOs constitute about 2% of total mobile services in SA. They are usually non-telecom businesses that lease network infrastructure from mobile operators to sell data and voice services to their customers.
Cell C has been the largest MVNO provider for a number of years but is facing growing competition from MTN, which has been mandated by the government to offer similar services in the market.
When Capitec launched its mobile unit, it stood out by offering flat rates and data that does not expire. Now it hopes to stand out further with its latest offering.
“When we launched Capitec Connect, most people needed data and airtime at much lower rates that didn’t expire. This was an industry first, and we made it happen. Now, some of their needs have shifted,” said Francois Viviers, Capitec group executive of marketing and communications.
“Clients that use large amounts of data within a month do not need non-expiry but value lower prices on large bundles,” he said.
While Capitec says the price of its new “large bundles” is 50% below normal industry rates, mobile data prices are difficult to compare. This is because mobile operators often make use of promotions and special pricing to give the impression of lower prices.
For example, SA’s largest operator Vodacom offers 10GB of data, expiring after a month, for R469. MTN offers a promotion for fixed wireless use at R99 for 10GB of data. Similarly, Telkom is offering a 20GB package for R149. This is all against an official average of about R80 for 1GB of data.
To put 10GB of data into context for SA, this equates to about 64 hours of uninterrupted music streaming or 32 hours of connectivity for WhatsApp video calls, Microsoft Teams meetings or Zoom conferences. In addition, customers can download up to 10 movies or browse the internet for 500 hours.
After a long-awaited recapitalisation of its business in late 2022, Cell C is looking to expand its offering and defend its position in markets like MVNO.
As part of the expansion narrative, Capitec is the latest on its roster of MVNOs. For SA’s fourth largest cellphone provider, this piece of business accounts for about 10% of its customer base and 15% of revenue.
Outside MVNO services, Cell C is investing in fixed-internet products, aiming to take advantage of growing demand for such services in the home and business market.
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