The big cellphone rip-off

[BTTB]

The big cellphone rip-off
Willem Steenkamp
September 03 2005 at 09:10AM

South African cellphone charges are astronomical, in some cases 10 times more than in comparable countries, an official report has disclosed.

The multi-billion rand profits of the three South African cellphone companies are boosted by the poor, the Icasa report states

About 70 percent of South African cellphone users are pre-paid clients who pay substantially more for their calls than wealthier contract consumers

It also wanted to know why the introduction of a third cellular operator did not lead to lower prices, as was expected.

 

[AntiThesis]

 

[ebendl]

There are even suspicions the cuts were timed to ward off action by Icasa.

I have heard from three totally different sources that the network companies meet once a year or two to discuss tariffs so that 'everyone is happy'. Not really reliable sources, but things do seem to indicate something like this...

 

[antowan]

I also think they are playing ICASA. Why are their calls on a general basis not falling and only in house iside their own networks and not inter network?

Clever but not smart!

ICASA knock them hard! They are playing you for fools!

 

[noswal]

when you do the leanest maths of one day's revenue; vodacom with their 12 million subscribers, MTN about 10 million and cellc with 3 million and each subscriber only makes one call in one day costing R1

And still your signal breaks up when you're on an important call!

 

[Turtle]

I have heard from three totally different sources that the network companies meet once a year or two to discuss tariffs so that 'everyone is happy'. Not really reliable sources, but things do seem to indicate something like this...

Of course they meet ... does anyone really think that both Vodacom and MTN decided independently at the exact same to both offer a similarly structured token, minimal, limited "price cut"? It's just impossible. The carefully timed press releases make it sound like one "responded to" the other (trying hard to make it look like there is competition in the market, but it's all theater) ... think about it, how could either one have responded so quickly? It takes time to plan and implement new pricing structures like this, they both started long before either one announced it to the media ... so they both basically MUST HAVE planned this together.

Cartels putting on a show in order to pretend to compete is nothing new, it's very common.

I don't buy the "step in the right direction" argument at all. It's quite possible to continue making these tiny, token "steps in the right direction" without ever getting near the "destination" ... but the angry mobs are appeased because it gives the appearance that there is progress - bah, we're being played like puppets.

when you do the leanest maths of one day's revenue; vodacom with their 12 million subscribers, MTN about 10 million and cellc with 3 million and each subscriber only makes one call in one day costing R1

The average revenue per customer for Vodacom is over R150/month (slightly down from a few years ago, when they passed the 10,000,000 subscriber mark they were earning R184/month average per subscriber). They earn roughly R2 billion revenue per month, IIRC. (Don't they have 17 million subscribers now, or is that including the whole of Africa?)

 

[Vio]

Add 2 more cellphone operators with 6 virtual providers too the mix and watch thows prices fall.

 

[Debbie]

I second everything Turtle said.

This little move to reduce prices by both operators was obviously a carefully planned step The cell operators know that ICASA is on their tails, so I think this is a move to pacify Icasa a bit.