BlackBerry has been a strong revenue-driver for mobile operators in South Africa for years, but with higher smartphone data usage the BlackBerry Internet Service (BIS) value proposition for operators is diminishing.
Most operators are providing a flat-rated BIS offering for R59 per month which includes all data for email, web surfing and other applications.
In the early days of BlackBerry the monthly usage hovered around 20MB per user, which means that operators made a good margin on their flat-rated BIS packages – even after paying the compulsory Research in Motion (RIM) license for their BlackBerry offering.
The explosion in smartphone applications (apps) and general smartphone data usage means that the average BlackBerry usage is now multiple times what it was two years back.
Growing monthly data usage – at the same price
The average BlackBerry data usage figures are not publically available, but there is reason to believe that it is around 200MB per month.
RIM SA managing director Alexandra Zagury told BusinessTech that the typical BlackBerry user consumes between 100MB and 150MB of data per month. However, some industry sources indicated that the average usage is closer to 200MB per month when including “abusers” which can consume up to 300GB per month.
This means that the cellular operators are essentially selling a 200MB data bundle for R59 per month. A portion of this revenue goes to RIM for BIS licensing.
Considering that Vodacom sells its 250MB data bundles for R99 and MTN charges R149 for a 300MB data bundle, it is clear that the cellular operators are not making as much money from their BlackBerry services as it does with other smartphones.
With Android devices, Windows Phones and iPhones there is not only the benefit of high data usage, but these subscribers may also consume out of bundle data which further generates revenue for the operators.
With smartphones, the more data you use, the more you pay. This model works well for operators trying to drive data revenue to compensate for a slowdown in voice revenues.
BlackBerry users, in comparison, only pay R59 per month independent of their data usage. Considering the fast growth of smartphone data usage, this is bad news for operators.
There are two main options for operators to try to solve the problem of high (and growing) BlackBerry data usage for the same price: increase the price or place a usage limit on BIS.
Increasing the price of BIS is likely to be met with a massive backlash from BlackBerry users. The affordable R59 flat rate for data is one of the main value propositions of BlackBerry in SA, and a price increase will not go down well with consumers.
The other option is placing a cap on monthly data usage, but again a user backlash will accompany this decision. The mere mention of a monthly BIS data cap of 100MB by Vodacom was met with tremendous opposition and forced the company to retract its plans within hours.
MTN recently introduced new low end BlackBerry packages with strict monthly usage limits (in line with their standard data bundles), but the company was not brave enough to introduce a cap on its standard BIS offering.
This may seem like good news for RIM, whose BlackBerry users in South Africa get a great data deal, but if the operators are not making money through selling BlackBerry packages they may simply stop promoting the service.
It currently makes more financial sense for operators to sell Android devices or iPhones; and unless things change we may see Vodacom, MTN, Cell C and 8ta punting Android, Windows Phone and Apple smartphones over BlackBerry devices.