“We have notified affected customers via SMS about certain price changes that will take effect on 1 February 2017,” stated Cell C in response to an email.
In a statement released to Cell C subscribers, it noted that the price changes include applicable connection fees, subscription fees, usage charges, SIM card fees, goods fees and other charges relating to the provision of Cell C’s services.
The reason for the price increases
There are a number of factors that have contributed to the price increase. Cell C highlighted that these include rising inflation and the Rand/US Dollar exchange rate which have contributed to an increase in the cost to provide mobile services.
“The single biggest input cost is network equipment, which is procured from international vendors. This equipment is priced in US Dollars and any change in the Rand has a significant impact on a company’s capital expenditure and operating expenses,” explained Cell C.
It added: “Planning, Investment and implementation of network expansion happens in long lead cycles. In many cases our costs are linked to the value of the USD from years before implementation. The impact of Rand to the USD should be looked at over a three- to six-year investment cycle, not month-to-month. The broader economic environment including GDP growth and inflation plays a role in rising costs. Additionally, annual increases to support costs and operational expenditure have a large impact on our costs. Despite our best efforts to keep our prices unchanged, the rising cost to supply mobile network services has necessitated an increase in the price we charge the end consumer.”
However, while Cell C will be increasing some of its prices come 1 February, rival MTN has launched a payment break plan allowing customers who sign up for a 24 month contract in the months of January and February this year to get a two month payment ‘holiday’.
The new product prices
Cell C provided the following breakdown of its products and the relevant pricing changes. However, in an emailed response to Justmoney, Cell C highlighted: “Customers who signed up for any of the EPIC or Pinnacle contracts and who are still within their 24-month contract will be exempt from the price increase.”
Source: Cell C, effective from 1 February 2017