MTN South Africa Raises Price of WhatsApp Bundle, Keeps Twitter Use Free

MTN South Africa Raises Price of WhatsApp Bundle, Keeps Twitter Use Free

MTN South Africa has repriced its WhatsApp social media bundles, which it launched in April 2018, while affirming its commitment to continue its Free Twitter promotion, which it launched three years ago.

The monthly WhatsApp bundle provides 1 GB of WhatsApp data for ZAR 10.00 (US $0.76). In the time since it was introduced, WhatsApp usage on the MTN network has increased by 300 percent. The price of the WhatsApp bundle will now rise to ZAR 30.00 (US $2.27), but the operator says the most vulnerable customers—those who are currently consuming less than 1 GB on WhatsApp per month—will be protected from the change in pricing and will still have access to the original low-cost WhatsApp bundle.

To use Free Twitter, customers do not need to opt in, and no minimum balance is required. A review by the operator of its customer usage patterns revealed that 99.1 percent of all Twitter users on MTN are using substantially less than 500 MB every day, and 80 percent are using no more than 10 MB of Twitter data per day.

In the coming months, MTN says it will offer more personalized products through its MyMTNOffers service. These offers will be designed around a customer’s unique needs and offered directly to the customer, based on location, usage, affordability and network capacity available.

Tarifica’s Take

Discounting and zero-rating of data for various popular apps has been a go-to strategy for mobile operators for quite some time. The strategy involves some give and take between the advantages gained by the operator (stimulation of customer data use over time and increased loyalty) and possible loss of revenue due to discounting or giving away data. This case from MTN South Africa is interesting and instructional because it quantifies the impact of a WhatsApp promotion on usage patterns and sheds some light on just how much, or rather how little, the operator is sacrificing by launching and continuing it.

In only a very short time, MTN’s WhatsApp bundle had a strong effect—tripling the overall usage of WhatsApp by the operator’s subscribers. So it is clear that in this instance, discounting data for this OTT messaging app directly moved subscribers’ usage patterns in a very positive direction. For the operator, this means that increasing the price is now a good next step, by which it can capitalize on the change in usage. The usage tripled, and now the price of 1 GB is being tripled. The operator was willing to offer data at a loss in order to get customers to consume more data for this particular, very popular app; now it is time to cash in, on the expectation that those consumers will continue to use WhatsApp at an elevated rate even after the price of the bundle goes up. And exempting the lowest-level users from the price increase shores up the operator’s image among customers without exposing it to any significant revenue shortfalls.

When it comes to Twitter, MTN is taking a different approach, opting to continue zero-rating indefinitely. This makes sense, because the operator’s survey shows that Twitter (presumably unlike WhatsApp) accounts for very little data consumption.