Report On Cellular Payment Systems In South Africa

This report is republished with permission from the author, Reuel Leach. You may contact him for more advise on saving money when using cellphones and Internet access on his cell 082 211 2619

Do you know what you are paying on your cellular bill every month. Maybe you do, but have you ever wondered what the networks costs are? Would you like to see something published on this subject? Read on. Its time that people started to get answers to these questions.

Lets start off with GSM. It’s a radio signal just like any radio frequency. You have a radio? You have a television, you pay a licence which is a minimum cost to get messages ( or Signals with information) to your home, office or car. With a radio frequency you choose which signal you want to pick up the messages you want to listen to or “watch”.

So what frequencies are there? Here are but a few common ones:

1.Short wave
2.Medium Wave
3.Frequency Modulation (FM)
4.Wi-Fi (Wireless)
9.UMTS (3G) which consists of data for internet and 3G video calls

Lets focus now on the formats of some of these signals. What do I mean by that? Well, you listen to a CD with music of your favourite artist and its recorded in WAV format. You might be familiar to the more common format used called MP3. Now lets make a comparison with these two formats. WAV will give you 700 megabytes over 80 minutes and MP3 gives you about 70 MB ( megabytes ) over 80 minutes. When you record something with your cellphone, you might use AAC or a similar format which might give you around 2-4 megabytes an hour.

The format of GSM is AMR, it could be similar to AAC, but this is where the interesting part comes. Lets look at the speed of these frequencies. These are true speed real life situations, not what they tell you at the shops

True Speed example in South Africa

  • GSM – 6 to 13 kilobits per second
  • GPRS 1 to 6 kilobits per second
  • EDGE 6 to 25 kilobits per second
  • UMTS 30 to 120 kilobits per second
  • HSDPA 50 to 200 kilobits per second

But if you tried to do a voice call over GPRS or EDGE you might find it a bit choppy. Ok here is the first big issue. A voice call can be easily done one EDGE using Skype or MSN and the maximum you will use is around 2.5 MB an hour. At the current data rates an unbundled GPRS? EDGE? 3G connection will cost you R2/MB which is the most expensive DATA rate. If you use a data bundle you will go as low as R0.19/MB so an hours call on Skype voice to voice will cost you in the region of R0.46 and R5 an HOUR! But if you use your normal Cellular phone for the same time, it will cost you R90 to R180 an Hour! So lets compare R0.46 to R180 an hour which most people are paying. Are you going to do something about this….

You should resort to these forms of technology:

  1. Skype
  2. Google Talk
  3. Mxit
  4. Nimbuzz

Heres the real shocker! Do you know what the most expensive form of communication in the world is. And it probably in South Africa. Its called SMS. Yes you thought it was cheaper than a call. Think again. Here is the simple price plan comparison

Let me explain this bit by bit. 1 sms is 160 characters. That includes the spaces in between. I you type an A4 page there is place for approximately 3680 characters with a font of 10 on it. Divide 3680 into 160 and that gives ou 23 sms messages. If you pay the normal day time rate it will cost you at 85 cents R19.55 PER PAGE and after hours at 35 cents an sms it costs you R8.05 so its far more than a page.

Let compare this to Skype or mxit this one page will be only 27 Kilobytes and at R2 per megabye it will cost you R0.05 cents per page and if you are using a data bundle then it will be as low as R0.005 per page!

Ok so what does an SMS cost us per Kilobyte?
1 sms = 140 bytes = 7.3142 sms = 1kb
85 cents x 7.3 = R6.21/kb

What does an SMS cost us per Megabyte?
1024 x R6.21 = R6359/mb
(normal data costs between R0.19 to R2.00 per megabyte)

What does an SMS cost us per Gigabyte
1024 x R6359 = R6 511 656 per GIGABYTE

So if you were to write or type a 2 page letter and put it in an envelope it will cost you around R2.50 to R3.00 depending on paper and stamp costs. If you had to type the equivalent in SMSs you will pay for a 2 page letter:- R39.10 so its R40 to send a letter.

No why are the networks so expensive. If technology has become so cheap, why have they not given us the GPRS SMS function which almost every cellular phone has the function of? It will cost us a few cents only. If you connect your cellular phone to a PC or had Skype capabilities you could do a full skype call on 3G or HSDPA signal for between R0.39 and R5 per hour or a video call at R2.34 and R24 per hour!

If you had to send someone a full WAV cd over the internet at R0.19 per megabyte it will cost you 700 x R0.19 which is R133.00 and that’s 80minutes of music. If you spoke at the average cellular call of R2.50 (hidden costs excluded) at 80 minutes you will pay R200 for the call. Your bit rate for the wave 8MB per minute and your cellular call is 0.360mb per minute! So the intensity and quality is much better!

I suggest that people all cut off their smss, get Mxit and Skype and call over those mediums to make calls and send messages until the networks in the future.

I reckon that Wou-daar-Kom and Empty-N don’t pay more than R0.39 to R0.40 per hour for your call!
If they are paying more than that they should discontinue this old technology and give us the better faster stuff I mentioned above!

You may download the original report with graphics using this link: Report on Cellular Pricing Reuel Leach.


Author: RJ Thomas

RJ Thomas is an International Relationship Builder. He was born in South Africa, and moved to China in 2013.

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  • The only problem is we need a unified system, a unified skype so to speak. If someone was clever they would approach the Cellular providers and say “ok, I have a an application that uses a users number as user name, and sim-card pin as the password. The application uses data to call/message people, and will run in the background. All phones will become preinstalled with the application.”

    Once there’s a mass adoption of this, the normal GSM networks will become more and more redundant (which they already are, just no one wants to take the initiative).

    The only hindering issue with this is that the Networks won’t make the enormous amounts of money, however, it will make a step in the right direction, and could be used as a nice medium to make the world smaller than it already is (you can skype someone in Ubekizatrazastan to organize nuclear weapons… at the some cost as your mate in the backyard while asking him what beer he was asking you to get).

    The only way this will work is if there’s a mass adoption of this service. The Network providers will just become wireless ISPs, and that means all they need are massive servers and wide coverage.

  • Some good points there! Many people know about IM systems such as skype. They are very very resonable yet people do need to be informed about the great expenses of SMS and GSM in South Africa. Mxit will evolve too into Voice I believe eventually and that will cause a storm in the Cellular Market!
    Reuel Leach

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  • With the advent of nimbuzz, meebo, ebuddy all serving as connectors to yahoo, msn, facebook, twitter it makes such a world possible and everybody happy.

    ” you can skype someone in Ubekizatrazastan to organize
    nuclear weapons… at the some cost as your mate in the
    backyard while asking him what beer he was asking you to
    get ”

    “make the enormous amounts of money”

    You buy data packages and Yes you can do voice too.