In April this year, cellular giant Vodacom announced that it would be slashing data prices with as much as 40% to accommodate customers who have found themselves in dire straits as a result of the Covid-19 outbreak.

Said the chief officer of Vodacom’s consumer business unit, Jorge Mendes, “Vodacom can play a critical role in supporting society during this challenging time and we’re committed to doing whatever we can to help customers stay connected.

“Since we started our pricing transformation strategy three years ago, our customers have benefited from significant reductions in data prices and the cost of voice calls. Over the same period, we invested over R26 billion in infrastructure and new technologies, so our customers enjoy wider 2G, 3G and 4G coverage and vastly increased data speeds.”

When it comes to cellular usage, though, consumers should understand the difference between in-bundle and out-of-bundle data rates, as accessing the web when not using a data bundle can certainly hit your pocket a lot harder than you might expect. Here is a quick explanation of just what in-bundle and out-of-bundle data rates are, and how they work.

In-bundle data rates

When we talk about in-bundle data rates, we are referring to the data that is included in a customer’s monthly contract (if the user has a cellphone contract agreement with their cellular service provider), or the data that is bought by a customer using their airtime – this is also called bundle allocation.

Let’s say a user’s cellphone contract includes a specified amount of free minutes and SMSs along with 1GB of data. The 1GB included in the user’s contract agreement is a bundled amount of data that can be added to, should it run out. For contract users, the amount spent on extra data bundles throughout the month will be charged in addition to the monthly payment on their bill. Should contract customers not purchase additional data bundles, they will be charged out-of-bundle-data rates for any online usage, which will also be added to their bill at the end of the month. The same applies to voice bundles, where minutes are allocated.

Prepaid users, on the other hand, do not receive a monthly bill, but acquire their airtime or data either by purchasing it at a physical vendor, or by using banking apps or other online avenues. If Prepaid customers do not directly purchase data, they are required to purchase data bundles using the airtime loaded onto their mobile device. Said data bundles are then valid for a specified amount of time, after which they will expire if all the data has not been used. Should data bundles run out or expire, users will be charged out-of-bundle data rates, which are typically quite a bit more expensive than the rates of their in-bundle counterparts.

Out-of-bundle data rates

Data which is not a part of a data bundle is charged differently, as each megabyte that is used is charged at a separate, specified rate, set out by service providers. When comparing the cost of the same amount of in-bundle and out-of-bundle data, out-of-bundle data will consequently be significantly more expensive. In the case of contract users, out-of-bundle data will be charged extra on their monthly bill, while Prepaid customers will quickly notice the airtime on their device depleting, as out-of-bundle data is taken directly from the airtime loaded onto a device at a given time.

When browsing the web or making use of applications that require data to work, it’s easy to see why data bundles are, by far, the more affordable option for customers, whether they have an existing cellphone contract or are Prepaid users.

For more tips on managing your data, please click here.

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