Safaricom discontinues unlimited internet

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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.

 

 

11 COMMENTS

  1. I am an unapologetic ‘torrenter’

    On that note, you can imagine how pissed off I was at the move to end the offering. However, from a business perspective, I understand why they had to pull the plug on us.

    My main issue is that they failed to inform us! Bob ‘apologised’ for it a week ago and I was left wondering “So the lower speeds was a deliberate action and not just my modem being moody”

    They failed their customers on that sense and by trying to change meanings to words. Complaining about Kenyans hogging on internet that was meant to be ‘unlimited’ was an insult anyone who can use a dictionary.

    That said, WHO WILL COME TO THE RESCUE OF TORRENTERS????

  2. Wanjiku

    I commend you for bringing this issue up. I have tweeted about this for a while now. You see its critical that companies desist from unfair practices. For example when you talk about unlimited internet services and advertise it as much and then hide ‘Unfair Usage’ in the Fine Print of the Terms and Conditions I honestly believe it is tantamount to being economic with the truth. Truth be told Safaricom and any other company is free to set conditions for their services and products and of course customers are also free to vote with their feet and wallets. On this note I will take my own advice and vote with my feet and wallet.

    I believe Safaricom has done great stuff for this country but I also think that they risk falling from being a great company to a mediocre one. First the arrogance of being a dominant player I think has gotten into the organizations Psyche. My advice to them? Think Kodak, Compaq, IBM (before it re-invented itself) and other great brands that let success get into their heads..I love Safaricom and how it has changed the landscape worldwide and how its Bottom of the Pyramid Strategy has brought financial services (and forced banks to look again at a segment of the population that has long been ignored). However, I think they now need to learn some Humility.

  3. What is this “unfair usage”? Suppose i’m not downloading torrents. Suppose I’m downloading HD movies from a FTP site. Is that unfair usage too?

  4. Unlimited is no more? Why…I have purchased unlimited 1 day barely two hours ago and I am using it? Kwani where do I live?

  5. OK…After the advert on pg 28 of DN 0f 30th april, I have believed the vibe…had to rush and got me a monthly unlimited… Kindly Wanjiku review Airtel’s so we know what to do when the time arrives. Thanks for great article though

  6. The limited bundles are a bit overpriced; if they accuse the unlimited users of overuse, I think they also stand accused of greed on their limited offers. Using such bundles to access Youtube or educational portals with You tube content is not feasible. Yet their promotional campaigns bear such You tube stuff. #who’s fooling who?

  7. Safaricom should be allowed to do as they please.Kenyans should have a little memory here.Were it not for Airtel and Yu,calls could still be at a premium.At this rate of utterly ignoring the wishes of the majority,they are driving themselves out of the market.I wouldn’t report i saw anything even if aliens uprooted all their fibre optic cables and drove off back to mars.99% of the Kenyans who are coarsed into using safaricom broadband feel this way too 😀

  8. Guys, airtel`s unlimited offer is a rip off! The connectivity is so poor , the speed is so slow that you literally want to hurl their modem out the nearest window, and don`t get fooled about their modems. I bought the more expensive at 4,500 sh on the assertion that its 3G plus. But the thing cannot even sustain connectivity for 5 minutes, bure kabisa. Safaricom was the best. Even Orange is better than airtel by far.

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