Safaricom Offers Bigger Data Bundles Without Price Increases

Safaricom Offers Bigger Data Bundles Without Price Increases

Kenyan operator Safaricom announced a revamp of its data plans, with customers set to enjoy up to 100 percent more data on daily, weekly and monthly plans, as well as some all-in-one plans. This will see both postpaid and prepaid customers browse more at no extra cost.

The changes include the KES 20.00 (US $0.17) daily plan, which has increased to 100 MB from 50 MB; the KES 99.00 (US $0.85) weekly plan with 500 MB, up from 350 MB; and the KES 1,000.00 (US $8.63) monthly plan, which now offers 7 GB, up from 5 GB.

The new data plans follow the success of the operator’s Mwelekeo Ni Internet campaign, which was introduced in November 2021 to showcase the transformative power of the internet, provide data offers and enable customers to acquire affordable 4G/LTE smartphones via the Lipa Mdogo Mdogo device financing plan. Customers can dial a short code or visit the MySafaricom app to access the full suite of revamped bundles.

Tarifica’s Take

According to Safaricom, the decision to offer customers more data within bundles without corresponding price increases was made in response to developments in Kenya’s national economy, which is currently experiencing increases in the cost of living.

Under these circumstances, and wishing to avoid losing subscribers—especially lower-tier subscribers—the operator could have simply chosen to lower the prices on some or all plans, offering the same amount of data for less money. If customers have to pay higher prices for other goods and services, this solution would make it easier for them to stay in their plans, so from the point of view of customer retention, it would have been the easiest thing for the operator to do—or at least it would have been the policy with the least likelihood of losing subscribers.

However, Safaricom’s approach here is to keep the prices stable while increasing the data allowances, making each megabyte of data cheaper rather than making each plan cheaper. For the subscriber, there are still savings, but in order to access them, the subscriber would have to use more data. Psychologically, this could very well be persuasive, and if it works, it could end up habituating the subscribers to using more data, and this habit could continue indefinitely. If so, it could end up driving more revenue for the operator in the future. In the near term, the only down side for Safaricom is offering more services without a revenue increase; however, the policy also benefits the operator by bringing about fuller utilization of its 4G/LTE network.