TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Google’s Equiano cable lands in Namibia

      3 July 2022

      More stage-6 load shedding on the cards for this week

      3 July 2022

      Load shedding nears previous annual record – with six months to go

      3 July 2022

      Unlawful Eskom strike costing South Africa three stages of load shedding

      1 July 2022

      Striking Eskom workers will face consequences: De Ruyter

      1 July 2022
    • World

      EU to impose wide-ranging new rules on the crypto industry

      3 July 2022

      Crypto hedge fund Three Arrows files for bankruptcy

      3 July 2022

      Meta girds for ‘fierce’ headwinds

      1 July 2022

      Graphics card prices plummet as crypto demand dries up

      30 June 2022

      Bitcoin just had its worst quarter in a decade

      30 June 2022
    • In-depth

      The NFT party is over

      30 June 2022

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Editor's pick»Price increases could bite mobile operators

    Price increases could bite mobile operators

    Editor's pick By Duncan McLeod21 May 2015
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    inflation-640

    South Africa’s big three mobile operators have taken a “short-term view to satisfy their shareholders” by increasing the price of their post-paid packages, a decision that could come back to haunt them in the longer term.

    That’s one of the conclusions contained in a new research brief by Research ICT Africa, which examines which of the country’s four mobile operators offers the best value for money for contract users.

    The research said claims by operators that increased input costs necessitated recent price increases for contract customers are not reflected in current annual financial statements.

    “Revenue has increased faster than operating expenditure for Vodacom, while both revenue and operating expenditure are in decline for MTN,” it said.

    Capital expenditure per subscriber has been in decline for several years, it added. “The test will be whether the big three will use the extra revenue from price hikes to reverse this trend.”

    The researchers said that internationally, telecommunications prices have either fallen or remained constant and thus declined in real terms. “The increase in post-paid prices by South Africa’s operators are contrary to global trends,” they said.

    “The three biggest operators increased post-paid prices more or less at the same time because they can. If only one had increased prices, then consumers could have switched at the next opportunity to one of the other operators. Post-paid subscribers are locked into contracts with high termination fees, leaving them with no choice but to accept the price hikes,” the report said.

    But Research ICT Africa believed the price hikes could backfire in the long term in two ways: by decreasing the trust of consumers and by harming operators’ bottom line by increasing the move to so-called over-the-top (OTT) providers such as Skype, WhatsApp and FaceTime.

    “The trend toward OTT is inevitable, but accelerating it through price increases that are going to drive consumers away from traditional communication mediums does not make much business sense while they remain significant revenue streams,” the report said.

    “Instead, operators should aim to maintain constant Arpus by providing more value to customers through more minutes, SMS and data,” it said. Arpu is average revenue per user and is a key financial metric used by operators.

    The report found that, even after its recent price increases, Cell C provides the best value for post-paid users, followed by Telkom Mobile.  – © 2015 NewsCentral Media

    Cell C MTN Research ICT Africa Telkom Telkom Mobile Vodacom
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleSA mobile contract price hikes unjustified: study
    Next Article DStv grows SABC News footprint

    Related Posts

    Huawei, MTN to help build 5G-powered ‘smart mine’

    30 June 2022

    The NFT party is over

    30 June 2022

    The great crypto crash: the fallout, and what happens next

    22 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Billetterie simplifies interactions between law firms and clients

    30 June 2022

    Think herding cats is tricky? Try herding a cloud

    29 June 2022

    How your business can help hybrid workers effectively

    28 June 2022
    Opinion

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.