There is a new Airtime App that targets Kenyans that’s under development – it is called OCharge. Right now, to get any details about the App you need to read this article by Techmoran or visit the App’s website and sign up to be one of those people who will receive the Beta release. According to what I have gathered so far, OCharge will simply be a platform through which you can purchase Airtime, be it for your Safaricom, Airtel, Orange and Yu mobile number.
It gets better than that. As Techmoran reported, purchasing Airtime through OCharge App will earn users loyalty points with equal value to the amount spent on airtime. “Airtime recharge constitutes the largest share of expenses for an average young adult Kenyan. Youth is spending more than 50% of their disposable money on airtime and data, and so have to cut corners on other expenses. At OCharge, we want to enable them to do MORE with what they have, without having to compromise. The thought was simple — spend KES 200 on airtime, and get KES 200 off on your next pizza purchase.” OCharge founder Pratik Kumar who is a former analyst at JP Morgan Chase in India explained to Techmoran.
Going by what Ocharge has posted on its website so far, the discount rewards are not some form of promotion but rather a business model that’s here to stay. This reinforced by the site that states as follows: –
- Get Rewarded with Deals, every time you Recharge with OCharge!
- Get Rewarded with Discount Vouchers from your Favourite Brands, every time you Top-Up your Mobile with OCharge!
The brands that have so far signed with Ocharge from where one can exchange the reward points for a product include CakeVille, Aqua, Africa Safari Adventure, Caribea, Game Watchers Safaris, and possibly a few others.
After reading the article I had two questions to ask: 1. Is the business model sustainable and 2. Who wants another App for buying Airtime? On sustainability, I guess there is a likelihood the App can make a business case for itself as, by and large, Ocharge is nothing but a free advertisement platform for different products and services. To better understand their business model, think of those numerous free Apps you normally use e.g. Facebook, Twitter, or even this website. The free Apps rely on reliable traffic and it is the traffic they monetize. A blog site like ours generate traffic using content creation. Facebook generates traffic by allowing social interactions, and several other Apps generate traffic by allowing people to engage with the App either to play games, monitor health, track phone calls, or simply sit there to guard the phone against malware.
OCharge also intends to rely on traffic but through an indirect method of offering free Airtime. Take for example a case where you buy Airtime for shs 200 then immediately walk to Cake Ville and redeem your Airtime for a shs 200 piece of cake. After balancing your books, you’ll realize that you have spent zero shs on Airtime. Given that there are about 10 million Kenyans who own smartphones and buy Airtime on almost a daily basis, OCharge seems to have a huge market potential from which it can make a very strong business case.
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Yes, OCharge could be having a market potential worth some 10 million potential customers, but is there anyone willing to buy Airtime through the App? Consider this first – those who have smartphones are also able to buy Airtime directly from their mobile money toolkits like M-PESA at no charge. Secondly, although buying Airtime through OCharge could be free, when it comes to paying for that Airtime I do believe you will be required to do so through either a Pay Bill number or through a Lipa na M-PESA till number. If the payment will be through a Pay Bill number, then one will be required to part with some Airtime charges at the range of about shs 15. Lastly, the process one will have to go through in order to make an Airtime purchase through OCharge will be cumbersome as first you’ll have to access the OCharge App, perform some arbitrary steps 1 through x, then go to some mobile money platform like M-PESA, and again perform further steps to make payment for the Airtime. I can already feel that very few will opt for Airtime purchase through OCharge.
Even if a significant number of the 10 million potential customers will go ahead and install OCharge and subsequently remember to be using the platform for buying Airtime, the benefits of using OCharge will not be immediate. This is because I do not think someone like Cake Ville will allow users to redeem points at will. Most likely, points will only be redeemed after a certain minimum number of points have been acquired and there will also be restrictions on the number of points one can redeem at a time. The other point of concern is how practical a partner like Cake Ville will be able to serve potential claims that may run into millions of shillings just within a month in exchange for advertisement space on OCharge.
On average, those with smartphones could be spending roughly shs 500 per month on Airtime (voice calls, text messages and data). If 1 million of them are interested in Cake Ville products and decide to buy that Airtime through OCharge, then we are talking about shs 500 million worth of points – points of which the entire pool may decide to go and redeem from Cake Ville within the same month. In the long run e.g. a year, this type of claim per month will be the normal rather than the exception and the question an OCharge partner like Cake Ville ought to ask themselves is whether they are ready to spend something to the tune of shs 500 million or more per month on advertisements.
Thus, unless there is something OCharge hasn’t revealed so far, I highly doubt if offering Airtime for free will ultimately work as a sustainable business model – and this I say based on the famous saying, “there is nothing like free lunch!”.