Mobile network contracts: Will they be increasing?

By Staff Writer
In light of Vodacom announcing its contract increases last week, Justmoney contacted the other mobile network providers to see if there are any plans for increases.
According to a spokesperson for Telkom Mobile, the company is not aware of any prices increases at the moment. However, “as soon as there are changes it will be announced.”
MTN also does not appear to have any price changes currently on the table.
Larry Annetts, chief marketing officer at MTN South Africa said: “MTN does not comment on competitor activity.  MTN shall continue to remain competitive and committed to its strategy of developing attractive and tailored products and solutions that will enhance customer experience and lead to the delivery of a bold, new digital world.”
Cell C price changes
A Cell C spokesperson pointed out that in February of this year, the network provider “rationalised its product suite”, with some of its prices increasing while others products that had performed above expectations decreased.
The spokesperson added: “However, despite some increases, Cell C’s packages remain competitive and in many cases below most of the rates charged by the larger players.
“The unfortunate move by the regulator in the mobile termination matter, providing smaller players with an insignificant asymmetry has forced the company to relook product offerings that it has subsidised since 2012.
Cell C went on to say that the rising inflation rates, economic pressures, and significant additional costs caused by loadshedding were also factors in the mobile provider upping their prices.
“Cell C will continue to bring innovative products that offer exceptional value to the market,” said the spokesperson.
To view the different Cell C packages and their fees, click here.
Vodacom’s contract increase
Richard Boorman, Vodacom spokesman told Justmoney: “This is the first time that we’ve had to do this in more than 10 years and reflects the unprecedented circumstances of having a squeeze on both revenue and costs. We’ve obviously not taken the decision lightly and have looked at the potential reaction from customers.
“It’s worth keeping in mind that unlike other everyday expenditure items like food, electricity, and TV services, the mobile industry has managed to absorb inflationary cost increases up until now and continue to reduce prices.”
He went on to say that price increases are a standard feature across most industries and it’s unfortunate that Vodacom has to also do the same thing.
Boorman explained that the reason for the increase is that “the average effective price of both voice and data on Vodacom’s network is down by around 50% over the last two years.”
He added: “This kind of deflation is unprecedented when compared to other daily expenditure items such as food and electricity. It also contrasts sharply with the massive increase in investment going into our network, with almost R30 billion spent over the past four years.
As with Cell C, the new regulation in termination rates have also had an effect on the provider.
“On top of this, mobile termination rate cuts have had a major impact on our revenue, and costs meanwhile have increased due to among other things electricity supply issues. Given the squeeze from both sides, we have had to review our tariff structures in tandem with implementing cost reduction programmes within the company.
“Our expectation is that the average effective price per unit of both voice and data will continue to come down, making services more accessible, but that as individual customers consume more voice and data that their overall spend will either be flat or increase.”
Boorman highlighted that customers have been informed of the price changes through a press release that was sent out, as well as via email or letters, and SMSs.

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