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How the new BlackBerry could kill the company’s market share in South Africa

There are three words for why the Blackberry dominates market share in South Africa: BlackBerry Internet Service (BIS). Despite the fact that it’s actually run by local mobile carriers, BIS is essentially a flat-rate data plan.

This makes Blackberry the cheaper option over, say, the iPhone, where you pay for every minute of data used. But now with the arrival of the BlackBerry 10, there is speculation that the newest model might no longer offer this service. The BlackBerry 10 with touch screen, so-called Z10, is expected to launch in South Africa in March, and the Q10, which has a touchscreen and a physical keyboard, in April.

But if neither offers BlackBerry Internet Service, the device’s days in South Africa are numbered, says Jan Vermeulen, technology journalist and web developer at the largest IT website in South Africa, which also is the only emerging market with the BIS service offering.

So while the rest of the world talks about the sleek features of the newly launched Blackberry 10, consumers in South Africa want to at least hang onto one old thing: BIS. The flat fee gives them access to unlimited browsing, and unlimited chat through BlackBerry Messenger, and email at a flat rate of R59 every month, an amount that has stayed fairly constant.

For South Africa, where BlackBerry was voted the coolest brand by its youth last year in the weekly newspaper Sunday Time’s survey awards, and other key emerging markets in Africa, the BlackBerry 10’s success will also be dependent on maintaining its competitive price. The company has 70% market share in South Africa; in Nigeria it is the No. 1 smartphone vendor. (Compare this to the estimate that only 2% of Americans were still using the phone last fall.

While BlackBerry’s makers—the company formerly known as RIM—haven’t confirmed any changes to service, Vermeulen says BIS has been under scrutiny for some time. South African mobile operators have not been happy with the BlackBerry service. In two years alone, between 2010 and 2012, South Africa’s usage has soared from 20MG a month to 160MG. For the consumer, this is attractive constant data package, but operators who had to pay RIM for access to the service, face ballooning subscription costs.

Another issue, says Vermeulen, is that the new BlackBerrys are a premium offering with high-end features such as a high megapixel camera and fast processors. “It is a good smartphone experience and it is competitive. Whether it is better than the others on the market is to be seen,” he says. This likely also means the new devices would have to sell at a higher price. The BlackBerry Curve 9320 (the newest selling on the market) will cost a user on contract R189 a month over 24 months, including BIS (if they want to use the prepaid service they will have to buy the phone outright at about R2,800). Compare this to the iPhone 5 (16G) at R399 for the cheapest contract (prepaid, the phone would cost R2,800). It’s no surprise that these economics have helped propel BlackBerry toward the young and aspirational.

There’s still a month to go before the new BlackBerry even arrives in South Africa and many details are yet to be released. But without BIS, its fall here could be as fast and familiar as the US and Europe.

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