On Thursday, the 15th of August 2013, internet service provider Afrihost unveiled a new 5GB mobile data deal that costs just R145 per month. They also announced that out-of-bundle rates for this particular bundle would be charged at the same rate as the per-gigabyte cost of original package deal – just R29 each.
Furthermore, the first 1000 people to sign up for the special offer will get a free “MiFi”, a tiny battery-powered wireless router that distributes mobile data over a Wi-Fi network that’s worth about a thousand bucks on a first-come, first-served basis.
Of course, there is a catch. The deal is only being offered to existing Afrihost clients and their friends, at least initially. It will go live on the 20th of August.
Mobile data has historically been a lot more expensive, and as such this deal almost seems unbelievable. Also, Afrihost switched over to MTN’s network earlier this year, which means that now they are essentially re-selling MTN’s bandwidth, yet MTN isn’t offering anything near as competitive a price for their own 5GB (3GB + 2GB) mobile data package. As a result, the question on our minds ever since the announcement has been how can Afrihost afford to do this?
We got in touch with Tyler Theron, Afrihost’s Brand Manager for some official commentary on the matter, and this is what he had to say.
When asked “How is Afrihost able to offer such a low-priced deal, considering MTN, whose bandwidth Afrihost resells has a similar package for just over twice the price?” he said “We’re using our marketing budget to subsidise this price in the interim similar to what we did back in 2009 with R29/GB DSL data. Our actual cost per GB for mobile data is a number of times higher than what we’re selling for.”
He says that back in 2009, the average price of a single gigabyte of ADSL data was between R70 and 80, and that particular offer was what ignited the broadband war “long before uncapped was even on the table”.
As for when this incredible mobile data deal will be available everyone, he said “Commercial launch will be on the 3rd of September, at which point we’ll announce all our mobile data packages and devices.”
So there you have it. Nothing sells products quite like word of mouth, and Afrihost is clearly hoping to repeat the success of their 2009 strategy, but this time in the mobile space.
As for MTN, who we also approached for comment on the matter, they had not come back to us by the time of publication. Should they offer anything significant, we’ll update the story.