Monday, November 1, 2010

The most valuable SIM card ever

Newcomer 8ta's introductory offer is for life, which means I can arbitrage it forever.
Telkom mobile unit 8ta has introduced what could be the most valuable SIM card on the market. In fact, it is probably so valuable they could become cherished possessions to be handed from one generation to another.

8ta's launch offering of one free minute of call time for every three minutes of calls received is intriguing as it is. It is simply using the mobile termination rate, the charge networks levy on each other to carry calls from one network to another, to subsidise the roll out.

But, what really adds some zoom to this offer is that it is for life!

Come on, when was the last time, if ever, you have heard of an offer for life on anything? Especially one from a telecommunications company, that has earned something of a reputation for not being willing to give its clients ice in winter.

According to its terms and conditions, should I get an 8ta card now, I will be able to benefit from accumulating up to R500 worth of minutes per month from encouraging people to phone me. Fantastic!

Bundle of joy
The SMS bundle that comes with this offer is obviously designed to encourage the incoming calls. Many prepaid (pay-as-you-go) subscribers are sensitive to the amount of airtime they have available, so they send SMSes (such as the “Please call me”) to people they want to talk to and hope the other party makes the call. The practice is so widespread and accepted now that it makes commercial sense.

If I send out five paid SMSes, at 50c each, I get 50 free ones to send that day – that's a lot of “Please call me” messages and someone is sure to call. I can even resell the free ones at less than half price and still make a small profit.

Lifetime freebie
Come on, when was the last time, if ever, you have heard of an offer for life on anything?
But it is not just that, it is the arbitrage opportunity that this launch offering opens up. South Africans have for years being playing one network operator against the other in the prepaid market.

An informal, yet sophisticated, airtime trading market has been in existence for ages. People take note of the various special offers from network operators and then trade the airtime minutes among each other in order to get the best deals and someone will always end up with cash in their pockets. It is not illegal, it is just tax-free business.

I have seen such operations take place in various parts of the country. Often the participants seem to be taller than me, stronger than me and speak with some kind of accent. The conversations are more like those that took place on the old Johannesburg Stock Exchange trading floor (but politer) or at a racecourse.

However, at the end of each trading session, someone got to make a cheap call and someone got to put cash in the pocket.

Heirloom SIM
But the flaw has been to continually buy and sell the various cards and keep a close eye on the monthly offerings. Now, with the lifetime offer from 8ta, that is not as difficult as it was, as it has created a permanent arbitrage opportunity.

Now I can use my Vodacom card for outgoing cellular to cellular calls, encourage people to phone me on my 8ta card and resell that accumulated airtime and spare SMS for a small profit that should see me through beer money at least. Small profit is the way of the informal sector.

If I have more than one 8ta SIM card, I could even sell it to someone who sees value in it once the offer to the first one million customers expires. Otherwise I could hand it down to my descendants – after all, when will 8ta ever really know that I am dead?

I am sure there are those with far keener minds than mine for this sort of thing who are already finding better ways to exploit the situation to make even tidier little profits that were never envisaged by those who created it.

So I encourage you all to get an 8ta card or two. After all, this offer is for life – it says so on 8ta's Web site.

- By Paul Vecchiatto, ITWeb Cape Town

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