Also remember that MTN is listed and perhaps Vodacom as well, one of these days, what does it do to the value of your company when your post paid guaranteed income contracts, were binding for 24 months as a rule, but now a large% of your base is now only bound for anything from 6 months.??
It must play havoc with the overall company evaluation.
This would have a direct impact on the frequency of Churn as well these churn averages would definitely increase greatly from the current averages reported. These companies report on churn in their results as it bears weight on the share price or value. Any investor /shareholder would pay less for such the company. This would obviously also effect any listed company that is a reseller of these products. When service providers decide to sell off their base and pack it in, they get evaluated on the average length of contracts still to run, churn rate and ARPU. if it were only 6 months on average, Churn was more frequent etc, their PE's would decline. The impact of paying or subsidising the cellphones are less of an issue for an investor, in the whole equation, as networks and SP would just subsidize the shorter contracts by less, and the clients would pay more for phones taking out shorter contracts (so that's just a hands washing exercise).
This load of bully beef we are forced to eat, has to do with the way these companies are valued. Companies with 5 year contracts are worth more than companies with 6 month contracts. etc etc.
