- Vodacom says it now has just under 10 million users of its Airtime Advance service, a use-now-pay-later scheme for airtime and data.
- Airtime Advance is an interest-free way to borrow from Vodacom – but it isn't free.
- Thanks to a service charge and higher rates, the cheapest data package comes in at around 60% more expensive than paying upfront, though bigger packages attract almost no premium.
- Visit Business Insider South Africa for more stories.
A little under a quarter of Vodacom's South African customers now borrow airtime and data from it, its latest numbers show – and those borrowing small amounts of data are paying richly to do so.
Airtime Advance, where even pre-paid users can get airtime and data now but only pay for it later, "is now used by just under 10 million customers" in South Africa, the cellphone company said in its annual financial results on Monday.
That is just over 23% of the total South African customer base of 43.1 million it reported at the same time.
See also: Vodacom is spending billions on 'SA’s cheapest data network' Rain, while its own data prices continue to plummet
Airtime Advance is available to customers who have been active on the Vodacom network for at least three months, and who have spent a minimum of R29 with it every month. Those with a high enough credit rating can borrow small amounts of data and airtime – a maximum of 125MB or R20 in airtime – up to 99 times. They then have up to 180 days to pay for it, with no interest accruing.
Payment is automatically deducted whenever a customer who borrowed airtime or data recharges.
Each advance comes with a R1 service fee that is applied immediately. That means borrowing R20 worth of airtime costs R21, and a customer who borrows R20 worth of airtime and then recharges to the value of R25 will be left with only R4 to use, after the advance is automatically repaid.
Both normal airtime and data advances also attract a R1 service fee per transaction – and the per-megabyte charges for the data itself is higher than Vodacom's closest comparable packages. The combination means that those who borrow the smallest available amounts of data pay up to 60% more than they would for regular data bundles. At the other end of the spectrum, however, borrowing is nearly free for those taking bigger data advances.
Like Vodacom's one-day data bundles, data borrowed via Airtime Advance is only available until midnight of the day it is borrowed.
But borrowed data is not available in the same amounts as Vodacom's standard "Internet Daily" one-day bundles, which it sells in 20MB, 60MB, 100MB, and 250MB batches. Instead the data options for Airtime Advance come in 10MB, 25MB, 70MB, and 125MB options.
Here is how much you pay for the standard, pay-before-you-use data bundles:
And here is how much you pay for the use-now-pay-later data packages on Vodacom Airtime Advance – and the premium for each tier:
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