Cell C to Raise Price of WhatsApp Bundle

Cell C to Raise Price of WhatsApp Bundle

South African operator Cell C has announced that on 1 February it will increase the price of its WhatsApp bundle from ZAR 12.00 (US $0.97) to ZAR 15.00 (US $1.22), according to a report. The bundle provides access to the OTT messaging and voice service for 30 days and has a fair usage limit of 600 MB.

The operator introduced a WhatsApp bundle in October 2014 as a promotion. When that promotion ended in August 2015, the company launched a WhatsApp bundle that cost ZAR 5.00 (US $0.41) a month, with a fair usage limit of 1 GB. In May 2016, Cell C raised the price of its WhatsApp bundle from ZAR 5.00 to ZAR 7.50 (US $0.61) but increased the fair use limit to 1.2 GB. On 1 February 2017, the operator raised the price of its WhatsApp bundle from ZAR 7.50 to ZAR 12.00 per month; on 1 October 2017, it lowered its fair usage limit to 600 MB.

Tarifica’s Take

Zero-rating is one of the strategies mobile operators have employed to deal with the competitive challenge presented by OTT players like WhatsApp. By discounting data for the use of a free (or nearly so) messaging and voice service, MNOs have been able to recoup some of their lost business, as well as mitigating the harm done to their customer relations by essentially bringing the OTT apps under the aegis of their brands. Offering better deals on messaging data has also been a way for operators to gain a competitive edge against each other.

In the case of Cell C’s WhatsApp bundle, we see a trend of raising prices and falling included-data limits. First offered on a promotional basis, the bundle became long-term. What we can conclude from the changes in pricing and data allowance is that over the past several years, Cell C’s plan to incentivize customers to use more data on WhatsApp has been effective. Now, it is expected that having grown accustomed to doing so, that subscribers will now be willing to pay more for the packages; the February 2017 increase almost doubled the price, and the current hike, while less drastic, is still substantial.

Furthermore, after slightly increasing the included data, Cell C then cut it in half, to 600 MB per month, and is keeping it there in the present pricing change. In short, the operator evidently believes that subscribers will be willing to purchase the package even if the data amount is significantly smaller. Most likely, with more overages occurring as a result, the operator will be able to derive more revenue from WhatsApp use.