THE TARIFFIC PERFECT PACKAGE TRACKER - Q2 2015

June 19, 2015

ABOUT THIS TRACKER

This is Tariffic’s second Perfect Package Tracker of 2015 and it’s designed to measure the real effects price and package changes in South Africa’s postpaid cellular market. The Tracker does this by using Tariffic’s proprietary tariff optimisation software to look at the perfect packages for four distinct users each quarter, and then shed some light on the results.

Here are this quarters key takeaways:

Vodacom and MTN price increases felt by consumers

In the past few months we’ve seen both Vodacom and MTN hike their rates for many postpaid contracts (by an average 3% -5%), and this is reflected when comparing how much more all users would end up paying for their contracts on those two networks (where the recommended contracts were the same).

MTN price increases are the most impactful

Given that MTN also increased the prices of some their data bundles (Vodacom did not) the overall effect of their rate hikes seem to generally be more impactful to users than Vodacom’s. This can be seen in the R26 increase to two of our user’s (Chris and Howard) recommendations for the exact same packages over the quarter.

My MTNChoice packages provide flexibility to savvy consumers

It is also interesting to observe that because of the flexibility of MTN’s My MTNChoice packages, the price changes often result in consumers having to re-align their entire package (including the base tariff and certain bundles) in order to ensure they’re on the optimal package. This can be clearly seen in Dineo’s MTN recommendation, which changed from a My MTNChoice 500 package with a 200 SMS bundle and a 50mb data bundle in Q1, to a My MTNChoice 350 package with a 200 SMS bundle, 100mb data bundle, and 100 minute on-net voice bundle in Q2.

Cell C offering less value on Straight Up

Where previously Cell C’s Straight Up 800 offered Susanne the best value for money and most suited her needs, now the more expensive Cell C Infinity Select comes out on top. Howard’s Cell C recommendation also changed from a Straight Up 200 to a ChatMore 200. The reason for this is that Cell C have decreased the amount of data they offer with their Straight Up packages by half. This came after they initially increased their prices in December last year and then offered double the data from February (a seeming win for consumers). It’s worth noting that Cell C did not actually refer to the doubling of Straight Up data as a promo.

It’s also worth noting that previously the Straight Up packages were Cell C’s simplest and best, but with the price increase and halving of data, now the ChatMore is often offering the best value to consumers.

MEET THIS QUARTER'S USERS

We optimise many different users every quarter, utilising the exact same parameters each time. We then select four users whose change in recommendations best encapsulate the changes to the cellular market over the period. Doing this allows our Tracker to function as a gauge of the South African cellular landscape, identifying how the cellular market is improving or deteriorating for consumers over time.

Here are the users we've had a look at this quarter:

Chris

Susanne

Dineo

Howard

HOW TARIFFIC’S OPTIMISATIONS WORK

Tariffic’s optimisations are performed using our award-winning software, which analyses cell phone bills. Tariffic is able to look at a person’s current monthly spend along with exactly how that person uses their phone, in order to calculate what their spend would look like on each network, with the optimal contract/package and bundle combination.

Tariffic’s optimisations tests what a person’s bill would look like on all the different packages and bundle combinations out there and in this way is able to calculate exactly what a cell phone bill would come to each month, taking into account the costs of subscriptions and bundles, as well as the cost of usage over and above subscription (out of bundle spend).

Tariffic’s optimisations do not expect a person to change how they use their phone, as it is based on their own actual historical usage patterns.

Tariffic optimises without a cell phone in mind so that we match a person’s usage to the most cost effective contracts, taking all the complex call rates and tariffs into account. In this Tracker we show the total monthly cost of each recommended package and assume that on each package users would be taking a phone that does not require any additional pay in. It must be noted that when a person takes a more expensive phone, not automatically supported by a package, this increases the monthly subscriptions. In order to make the recommendations as comparable as possible, Tariffic has excluded all handset subsidies (also known as a Connection Incentive Bonus, or CIB) from its calculations to ensure that we’re analysing packages on a like-for-like basis.

Tariffic does not recommend any ‘deals’ that some service providers may be offering (including SIM-only deals) and instead recommends base tariffs only. Tariffic does not take “night-surfer” or any discounted data rates into account for data contracts. Tariffic will only recommend packages from South Africa’s four networks. Tariffic includes an amortised connection fee where applicable and estimates CIB values where they are not available. Note that Tariffic’s recommendations do not take network quality into account and are purely based on price alone.

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