Few days ago, Safaricom CEO, Bob Collymore announced that the company discontinued its unlimited internet on the modems and handsets. What shocked was the announcement that the company is not making money from the unlimited data sales and usage.
Collymore announced that Safaricom was amending its policies to provide data limits (commonly known as caps) and put in place a fair use policy, that can allow them to limit the speeds if a user is seen to be flouting the rules.
The announcement received a lot of criticism against Safaricom for not considering; the falling cost of connectivity, that users crave cheaper bandwidth and that there were some people who were hooked on the system and had to hog the bandwidth, while others thought that Safaricom was maximizing on the profits and that it was making lots of money on the data end.
For those who are not aware, Safaricom was offering unlimited connectivity at speeds of 512 kilobits per second at a cost of sh. 200 per day, sh.500 for three days, sh. 1000 per week and sh. 3000 per month.
Assume the internet link is a pipe of water, running at a permanent speed of 512, meaning that you do not expect the speed to go down because it is unlimited. The word unlimited is also interpreted that that pipe can be opened and left running for whatever time.
Now, the speeds have been limited to 128 kilobits per second once you reach the limit- this is commonly known as throttling. That means that the cost remains the same but daily you are limited to 250Mb of data, 700Mb in three days, 1.5Gb per week and 4.5Gb per month. After you reach the limit, the speeds fall from 512 to 128 for the remainder of the subscribed period. You can read more about bits and bytes conversion here.
Generally, what does unlimited mean? According to the dictionary definition: “having no restrictions or control” or “having or seeming to have no boundaries”. But in telecommunication terms, this word seems to have elastic meaning.
Most global providers who have tried to provide the unlimited connection have had to cap it after a few bandwidth hoggers, usually 10% or less, prove too much. Comcast in the US ran into trouble after capping its home monthly data at 250gigabits per second.
And Safaricom folks wondered why people were busy on twitter asking for wifi gadgets with 3G capabilities and others that had a USB or modem port, can you see what I am seeing? Well, I can see why I should be paying more attention to prepaid offers. This was an insanely ambitious offer 🙂
Its easier to speculate but I thought it was better to get it from Safaricom, after all, they were the architects of the unlimited offer and they must have anticipated the uses. Much of the info I got from Rita Okuthe, head of consumer proposition and her team of experts.
Enter tech savvy business people in Nairobi and other areas….
So, what did people do with the unlimited offer?
1. Start a cyber cafe
With the wifi, it is easy to get wifi enabled PCs and laptops and in the neighborhoods with limited connectivity, people will surf and you can make some money, and they did.
2. Open a DVD shop
According to Safaricom, the modems were feasting on the internet while the handsets were merely snacking on the net. In their network, 85% of users were on the mobile phones, on facebook, Gmail and other websites that in most cases are optimized for developing countries while 15% were modem users who were running bandwidth hungry applications and downloading movies, commonly known as torrents.
Indeed, Rita says that the modems were sucking all the internet because the torrents were running for 24 hours, and it is now understandable why its now easier to open a DVD shop.
And of course I suggested that throttling the internet would lead to fewer businesses and the price of bootleg copies may go up. If a guy pays 3,000 for internet and downloads porn, movies, games, series, and music, you can understand why people are furious with Safaricom.
3. Share internet in the office
With this connection, I am sure many small offices were running on the wifi enabled gadget and that meant that offices can now afford cheaper internet. This meant that other Safaricom packages were not selling as much as they should.
4. The simplest was to just tether the phone to your computer and browse 🙂
You can add other possible uses here 🙂
So, does Safaricom give you a meter to measure when you exceed your limit? I am not sure who will be the judge, some people say they leave 1gb only to find 500mb next time they switch modem on. But again, some people leave websites and applications running on the back end, not knowing that data is running.
With all the infrastructure, should Safaricom be charging better? Read part two in a day or two.