Shoprite has launched its new mobile network, K’nect. The network is designed to appeal to low income consumers with a simple tariff structure promising flat call and data rates. The service uses the mobile network infrastructure of Cell C, which has a roaming partnership with MTN.
The COVID-19 pandemic has proven transformational in how low income consumers in South Africa have adopted remote shopping and online service usage, as lockdowns have limited travel options and closed physical stores.
Shoprite’s K’nect service, known as a mobile virtual network operator (MVNO), is designed to leverage the retailer’s reputation for affordability and act as a [free] gateway to its suite of services, which include the Shoprite and Checkers websites and apps, financial services products, Computicket website and the Group’s jobs portal. It will allow consumers to pay bills, buy electricity or airtime, transfer money, buy tickets or insurance.
Shoprite has promoted the service, which is due to launch in April 2021, around affordability and simplicity. It promises competitive call tariffs and data costs of 15c per megabyte. A 2020 study by Cable found that South Africa has amongst the most expensive mobile data in Africa, with average costs of R88 per GB. The new Shoprite pricing works out at R150 per GB, but allows consumers to buy micro amounts of data. Airtime, data bundles and rewards only expire after 60 days, whereas the norm in South Africa is 30 days.
Shoprite will also offer discounts of up to 10%, as well as rewards, to the 17m members of its loyalty scheme Shoprite Xtra. For the launch it is offering consumers 100MB for free, for three months, to encourage uptake.
Rival Pick n Pay launched its mobile network in November 2020, in partnership with MTN. The service was launched under the PnP Mobile and Boxercom brands, reflecting the group’s two banners. As with Shoprite’s service, it is closely tied to Pick n Pay’s loyalty scheme. Several South African companies had already launched MVNO services, including First National Bank and Mr Price Group, which both used the Cell C network.