Telkom is catching Cell C

[Swa]

Once again and as in general I agree to disagree. Telkom Mobile is doing just fine and growing by the day even charging at higher than R10/GB. Please don't conflate voice revenue with data revenue. Uncapped data on mobile is definitely not the norm - it's marketed as such but as almost always it is severely constrained especially off-device (ie. mobile hotspot/tethering etc). The drop of speed to 3G is usually around 64-128kbps as a fallback and even when you are within FUP they'll drop your video to 1-1.5mbps for streaming. I'm not sure where you're getting your numbers from but you seem to love to oversimplify the cost. But please, as I've asked before, point me to an uncapped offering without the fine print and FUP for a mobile offering from a regular mobile operator with 10 million subscribers or more that costs less than R1000 even at our crappy exchange rate?

Never said they weren't but they could have done a lot better and so could Cell C. They never took advantage of it both with data and voice. Telkom even cancelled their competitive Smartdata packages. These are all facts if you look back. MTN and Vodacom was able to match them at every turn which wasn't the intention with the lowering of the mobile termination rates.

I'm not going to argue with you about the uncapped part as every time these conversations pop up people post the cheap uncapped packages but next time everyone AGAIN acts like they don't exist. True not all of them are but a lot of them are true uncapped.

I'm not oversimplifying the cost of data. There are competent bodies studying these things and even with 3G they put the cost at only a few bucks per GB. Since then we've had HSPA and LTE-A which makes better use of spectrum and the cost has dropped dramatically. We should be paying no more than R2/GB if they took advantage of volumes but instead they hold on to this idea that they must recoup network costs. When in truth if they offer it people will use it.

 

[quovadis]

Never said they weren't but they could have done a lot better and so could Cell C. They never took advantage of it both with data and voice. Telkom even cancelled their competitive Smartdata packages. These are all facts if you look back. MTN and Vodacom was able to match them at every turn which wasn't the intention with the lowering of the mobile termination rates.

I think you're underestimating the power of MTN and Vodacom's duopoly and general market share and footprint. The price isn't the only determining factor which is obvious by the fact that cheap players don't translate into any massive market share.

I'm not going to argue with you about the uncapped part as every time these conversations pop up people post the cheap uncapped packages but next time everyone AGAIN acts like they don't exist. True not all of them are but a lot of them are true uncapped.

The challenge remains. You're stating it's the norm and I'm disagreeing with you as uncapped means very different things in every market. What IS clear is that voice and text is becoming secondary to data which requires a much higher fee commitment monthly for a pseudo-uncapped product.

I'm not oversimplifying the cost of data. There are competent bodies studying these things and even with 3G they put the cost at only a few bucks per GB. Since then we've had HSPA and LTE-A which makes better use of spectrum and the cost has dropped dramatically. We should be paying no more than R2/GB if they took advantage of volumes but instead they hold on to this idea that they must recoup network costs. When in truth if they offer it people will use it.

All data is not created equal. The cost per GB is debatable but the obvious differentiating consideration with mobile is the access portion - ie. the link between the tower and the mobile device is constrained. Without triggering the whole "spectrum spectrum spectrum" or "5G 5G 5G" debate again the towers can only deliver as much data as the technology and spectrum allows which is many factors less than a single fibre pair. Increasing tower density allows for the same spectrum to be used with lower power per tower adding more capacity but each tower has a base cost which doesn't necessarily decrease even at scale.

 

[quovadis]

We can all debate tower and spectrum constraints but the reality is that they're still overcharging. Vodacom hasn't had a reduction in their 500MB-2GB bundles in 5 years. I think the hope is secretly that Cell C will fold or increase prices so they won't have to compete. Vodacom's ceo has even stated that with the needed spectrum data will only fall by 50% while they're charging 15x more than the best offer on the market. The real problem here is culture. We're living in a data centric world and while the rest of the world has caught up SA has not and we're still paying for usage.

Cell C at the current rate will face serious economic realities imho which is why comparing their deals to competitors is kind of an odd argument especially comparing extremes.

It's not much of a debate if a tower can only deliver a finite throughput which is why there's always going to be a balance or else VC could drop the price and then not be able to service the demand due to these limits unless you consider the 5G approach of a tower every few hundred metres which as I mentioned adds cost and complexity.

What it boils down to is competition. If you want Vodacom and MTN to drop their prices then stop using them. Move to Cell C or Telkom or Rain for data only and convince everyone else to do so as well. The problem is that ZA loves their contracts and upgrades and free phones 2 months before the end of the contract and the cycle continues.

 

[DXL]

They would need to do a whole lot of 5 before offering 4. And speaking of 4, I know the networks are greedy but those prices seem too extreme the other way round and maybe I've just been brainwashed to believe that. I see the price war as a negotiation and there's no way they'd take that offer.

A recent drive around the Durban area from Toti to King Shaka Airport I was able to have a continuous call without dropping the call on Telkom Mobile. This surely speaks Volumes.
But I can say that we have decent Telkom Mobile Coverage in Durban and I am sure the rest of the country is quite the same. If the prices are low more people use the network and more money comes in to re-invest where there are constraints. Data at a cost of between R5 - R10 a Gig will by no means ever choke up the network.

Data at R1 & R2 a Gig will certainly do that.

R150 a Gig is daylight robbery considering the cost of Mobile Data is in the range of R1-50 to R2 a Gigabyte.

 

[Gudnews]

But I can say that we have decent Telkom Mobile Coverage in Durban and I am sure the rest of the country is quite the same. If the prices are low more people use the network and more money comes in to re-invest where there are constraints. Data at a cost of between R5 - R10 a Gig will by no means ever choke up the network.

Data at R1 & R2 a Gig will certainly do that.

1. Durban is a big three city, no surprise the
immediate surrounding area is also well served. I live in Pietermaritzburg (not exactly the boondocks) and I experience a dead zone at 2 very popular shopping centre.
2. More people using the network at lower prices doesn't necessarily equal more profit, the number of people it would take to equal more profit would probably clog up the network.

 

[Swa]

Cell C at the current rate will face serious economic realities imho which is why comparing their deals to competitors is kind of an odd argument especially comparing extremes.

It's not much of a debate if a tower can only deliver a finite throughput which is why there's always going to be a balance or else VC could drop the price and then not be able to service the demand due to these limits unless you consider the 5G approach of a tower every few hundred metres which as I mentioned adds cost and complexity.

What it boils down to is competition. If you want Vodacom and MTN to drop their prices then stop using them. Move to Cell C or Telkom or Rain for data only and convince everyone else to do so as well. The problem is that ZA loves their contracts and upgrades and free phones 2 months before the end of the contract and the cycle continues.

Well for some reason throughput isn't a problem in other countries. They lowered prices regardless. Sure even if spectrum is released they'll come with the excuse of having to erect more towers. The problem has always been corporate culture. They could erect more towers now if they wanted to.

I agree on the last point. Just as corporate culture is a problem so is consumer culture. People have become too complacent and accepting of the status quo.

 

[quovadis]

Well for some reason throughput isn't a problem in other countries. They lowered prices regardless.

Different markets and once again all wireless data has limitations - and yes it is also a problem in other countries. Give us some examples of countries that dropped their data costs to less than 10% of what they were within 5 years?

 

[Swa]

Different markets and once again all wireless data has limitations - and yes it is also a problem in other countries. Give us some examples of countries that dropped their data costs to less than 10% of what they were within 5 years?

Vodacom never properly dropped prices why it has catching up to do. Again, 0% in 5 years. My issue isn't about countries that dropped their rates by 90% in 5 years. It's about Vodacom charging +1000% what other countries do, or even 15x what others in SA charge.