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How Capitec’s offer of R45 per gigabyte compares

Connectivity is becoming more affordable, as Capitec’s new flat-rate data offering to its clients proves. The outstanding feature of Capitec Connect is not only that everyone will pay the same rate whether they buy 100 gigabytes (GB) or 100 megabytes (MB), but that the offering is basic and simple.

In essence, the poor won’t be subsidising the rich any further and clients don’t need to suffer through hundreds of different options at different prices when trying to reload data.

Capitec offers data at R45 per GB – with no distinction between data for social media, YouTube, streaming or different data for day and night use.

Nor do clients have to search for the best price between data valid for one day, one week or one month.

Capitec Connect has reached an agreement with Cell C that the data won’t expire as long as the telephone number remains active by being used at least once every three months.

Capitec also says mobile users don’t need to convert Capitec Connect airtime to use it as data, voice or for messaging as it all costs the same.

All of this is a far cry from mobile companies telling you that you cannot connect to the internet because the 3GB that you have available can only be used between midnight and 5am.

Far less stress

Capitec Connect’s offering is simple and easy to understand in that clients can choose what they need and buy what they want, whether airtime minutes, SMS bundles or data. There is no need to scroll through confusing price lists, bundled offers and different expiry periods to get what you want.

The bank has provided a solution for what economists term ‘rational ignorance’, defined as consumers taking a rational decision to remain ignorant because the cost and effort of obtaining sufficient information exceeds the perceived benefits.

It is just not worth the effort to collect all the catalogues from different cellular providers and try to make sense of it all.

The current catalogues from MTN, Vodacom, Cell C and Telkom add up to 210 pages, with thousands of different offerings. Struggling through these, or the service providers’ websites, discloses confusing offerings with equally confusing names and restrictions.

Comparing the Capitec apple with just a few pears …

Comparisons are near impossible – but Capitec’s offer of R45 per GB of data that doesn’t expire looks like a game-changer following years of complaints that mobile data is too expensive, especially for those who can only afford to buy little at a time.

The base offer extends to all users –thus 100MB costs R4.50, 1GB costs R45 and 10GB costs R450.

Telkom offers mobile chat bundles at R8 for 100MB valid for a week. This can only be used on WhatsApp, Threema, WeChat, Viber, Telegram, LINE, Signal and Facebook messenger. A 1GB package that is valid for two months costs R79, and includes an additional 1GB of night-time data.

MTN charges R20 for 100MB of data that is valid for 30 days, R69 for 500MB and R85 for 1GB. Vodacom charges R29 for 200MB of data, R69 for 500MB and R85 for 1GB.

Interestingly, the latest Cell C catalogue shows that users will get a better deal through Capitec than from Cell C directly.

The closest comparison to Capitec’s R45 per 1GB offering is a Cell C offer of 1GB data (half for ‘anytime’ use and half for night-time use) at R49, which includes 500 text messages and 60 cellular minutes.

Capitec is also cheaper than FNB Connect. FNB customers pays R39 for 500MB of data and R59 for 1GB, valid for one month on a post-paid basis.

Small users

When Capitec announced Capitec Connect, it said the flat rates mean that the cost per unit for data, voice minutes or SMSs stays the same whether clients buy a little or a lot.

“Eight million clients already buy pre-paid data and airtime on the bank’s digital channels and there is opportunity to offer them a simpler solution at rates almost 50% below the average rate in the market.

“There are no out-of-bundle charges. Data costs R4.50 per 100MB, voice minutes 90 cents per minute and SMSs 25 cents per SMS. Clients do not pay transaction fees when they recharge.”

Capitec CEO Gerrie Fourie says complicated bundle pricing, off-peak and peak rates, and the fact that data expires are all things that make no sense.

“We’re changing this by giving our clients access to a mobile solution that is simpler to understand, much more affordable, and can be recharged easily on our digital channels.”

He told shareholders during a recent presentation of the bank’s interim results that Capitec’s eight million clients who buy prepaid airtime represent more than 30% market share of prepaid sales.

Read: Capitec still shaking up the establishment

“Data and airtime are expensive and complicated, and bundles expire.

“Access to affordable data is critical to support education and growth in SA,” says Fourie, adding that customers spend on average R30 when using Capitec’s channels to purchase airtime.

Big (contract) users

People using a lot of data, such as a household connecting several devices onto a wireless network, still pay much less for data if they sign a (big) contract.

For instance, Telkom offers a 24-month contract at R409 per month that includes a router, 180GB monthly data for use at any time, and 180GB for night-time use.

This equates to R1.13 per GB, compared to a Telkom prepaid customer paying R29 for 300MB for use on their cellphone.

Cell C CEO Douglas Craigie Stevenson, in a press release announcing the new initiative, said that partnering with Capitec seeks to bring digital inclusivity to all levels of society.

“It is through partnerships such as the one between Capitec and Cell C that we can make a major difference in bridging the digital divide that still exists in our country. We’re very pleased to be part of the solution that enables South Africans to access a digital lifestyle that can truly change their world.”

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