Vodacom CEO explains why mobile data expires

Will you not sell more than enough data bundles to easily match/exceed the current usage, right?
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You'll probably easily hit the same profits and those consumers leaving for e.g. Telkom because they're cheaper would stop leaving.
Elasticity is obviously a huge driver. But surely it's already built in? No sane company would not embrace it.
 
Indeed it the real reason why investors will invest the massive amounts needed to build and operate these networks.

With double the margin of your competitors, you shouldn’t have too much trouble finding investors and funding no?

Funny that the same investors say nothing on the fact that your CEO (and probably the rest of the management) is paid on the same scale than the CEOs of international competitors 10 times bigger.

But these competitors are able to provide unlimited calls, data, SMS for the price of a meager 5Go bundle at Vodacom. It sure makes life easier when customers accept to pay this.
 
No, french bank account, proof of address and real address to ship the sim are required.
Ok.

But this makes me think it should be possible with some networks around the world surely ...
 
As I said, it's quite hilarious that for 19.99€ a month, I get 25Go per month to use roaming on Vodacom with my French sim card...

I doubt that Vodacom sells it at loss to my french operator, sign that they are clearly fleecing South Africans.

I just checked, Orange's profit margin is 7.5%, Vodacom almost 19%...
I call BS. What service provider is this?
 
I call BS. What service provider is this?

Free Mobile. I let you translate:

EN VOYAGE
Depuis Europe, DOM, Etats-Unis,
Canada, Afrique du Sud, Australie,
Nouvelle-Zélande et Israël :
Appels, SMS, MMS illimités

Depuis + de 50 destinations :
25Go/mois d’Internet (en 3G)

Avec 25 Go/mois d’Internet en 3G depuis plus de 50 destinations,
profitez de votre forfait à l’étranger pour partager vos photos et vidéos.
Depuis Europe, DOM, Suisse, Guernesey, Jersey, Ile de Man, Etats-Unis, Canada, Mexique, Brésil, Algérie, Israël, Turquie, Afrique du Sud, Australie, Nouvelle-Zélande, Thaïlande, Russie et Ukraine.
(au-delà : 0,0072€/Mo depuis Europe, DOM et facturation au tarif en vigueur pour les autres pays)

http://mobile.free.fr/fiche-forfait-free.html
 
Free Mobile. I let you translate:

EN VOYAGE
Depuis Europe, DOM, Etats-Unis,
Canada, Afrique du Sud, Australie,
Nouvelle-Zélande et Israël :
Appels, SMS, MMS illimités

Depuis + de 50 destinations :
25Go/mois d’Internet (en 3G)

Avec 25 Go/mois d’Internet en 3G depuis plus de 50 destinations,
profitez de votre forfait à l’étranger pour partager vos photos et vidéos.
Depuis Europe, DOM, Suisse, Guernesey, Jersey, Ile de Man, Etats-Unis, Canada, Mexique, Brésil, Algérie, Israël, Turquie, Afrique du Sud, Australie, Nouvelle-Zélande, Thaïlande, Russie et Ukraine.
(au-delà : 0,0072€/Mo depuis Europe, DOM et facturation au tarif en vigueur pour les autres pays)

http://mobile.free.fr/fiche-forfait-free.html
Bloody hell. Am asking my French friends if they can get me one. I pay £10 a month for my UK one already, and barely use it unless I am there
 
Bloody hell. Am asking my French friends if they can get me one. I pay £10 a month for my UK one already, and barely use it unless I am there
Certainly a business opportunity here. Similar to re-shippers bypassing geo-location restrictions.
 
Certainly a business opportunity here. Similar to re-shippers bypassing geo-location restrictions.

Probably a bit complex, I doubt they’d accept to open 10 contracts under the same name so you’d need a network of people subscribing to it in France and pay them to use their name and bank account and then a network to resell it here and manage monthly payments.

If the use is too widespread, I guess they’d also change the offer or block the people who use it only overseas for example.

Lots of efforts.
 
“For example, if you use the Gautrain and you buy the 7-day package, you get a discount,” he said.

“This discount is possible because the Gautrain already calculated that, on average, consumers only use it for five days per week.”
Poor example. The only reason anyone buys a weekly pass is because it still works out less than the single trip. It is time based and not usage based like data.

What Shameel was talking about is pricing, not expiry.

Data bundles expire because it's a service, not a physical product.

Milk, petrol, etc. are all physical products and don't expire. Once you bought it, you take it home and consume it at your leasure.

Access to a data network is a service, just like you pay for access to a gym, DSTV, etc.

I've been saying on this forum for many years, the first person that can turn data into a physical product you can buy and take home for later consumption will win the Nobel prize for Physics. :)
And data happens to be the only tracked non time based service that expires. All other services are either time based (not counting actual usage) or usage based. If I go to Makro and buy a six pack they don't charge me more when I only buy another one after 6 months even though they can. They only make 4 or 5 months of profit from me for buying in bulk but they're happy with it because some people will use it up in 3 months and come back so they're willing to take the chance I may stretch it over 6 months and pay less.

I've been saying this from now, the first Vodacom marketing person who understands bulk economics I'll give a noble prize myself.

You're not completely wrong as I described above.

The single biggest stuff-up in selling data is when we switched from bits/second to bytes. Removing the time element from a service that actually runs on it, introduced alien concepts like data bundles.

It was needed to make data affordable for consumers. Corporates have always bought their data in bits/second. I.e. they buy a speed and there is no concept of a cap.
And I've been saying the same thing for years. There was never a switch to usage based but SA for some reason went with it from the start where the world norm is bandwidth based. It's impossible to calculate a cost when the metrics aren't the same. The most you can do is calculate one on average usage that's higher than the network costs but Vodacom is further screwing the metrics by introducing expiry.

Telkom has an uncapped LTE product but the problem is they match the price to entry level adsl. They can easily have a 4mb adsl comparable product marketed to 10 times more customers but shortsightedness prevents it.
 
Any business will abuse it market dominance for as long as possible and find all justifications for what it is doing.
Telkom did it for a long time with ADSL force feeding us 3gig caps whilst doing its best to stop competition and international capacity increasing. I believe many people in VC used to come from Telkom.

The problem is what do you do about it, telkom/cellc doesn't have the network coverage and MTN/Vodacom is more then happy where they are especially with long roaming agreements, if telkom were to improve their network coverage and towers. Considering their pricing on their network it would force mtn/vodacom to shift the daylight robbery practices, to more consumer friendly pricing.Why on earth they aren't doing that right now to keep telkom at bay is beyond me.


But prices will come down. As it has been, year on year, for two decades.
@jannievanzyl
Seriously year on year fallen. In fact data bundles have not fallen ONE bit 500mb monthly bundle IS still R99.00 for the past 3 years.Adding weekly or additional cheaper bundles or cutting out of bundle rates DOES not mean you have actually cut your data rates at all.

https://mybroadband.co.za/news/cell...id-data-prices-cell-c-vs-vodacom-and-mtn.html

https://mybroadband.co.za/news/cell...id-data-prices-cell-c-vs-vodacom-and-mtn.html

https://www.vodacom.co.za/vodacom/shopping/data/prepaid-data
 
Rain also tried it. You think they stopped it because it seemed like a cool thing to do?

The physics are the physics. Irrespective if you agree with it or not. Or try and force a commercial model onto it.

But I'd be keen to see how much spectrum these TW MNO's use for how many subs. Do you have some links?
Physics are physics yes, but for some reason we keep hearing that SA is "special" when it comes to things that work in the rest of the world. Couldn't it perhaps be that Rain just had a poor model and still has which is why nobody is interested in it?

Ah, so tons of spectrum available. Thanks for answering the question and explaining the SA problem in one go, which answers your question.
Actually it's the other way around. The few MHz of extra spectrum they have is poorly suited to their dense cities and almost useless. Whether you service 1000 customers over 1km or 10km is exactly the same in terms of capacity. To use the low frequency spectrum in a dense large city would be disastrous.

Market won't accept the pricing, I believe.
Nice excuse when nobody has tried.

The only reason why other providers don't enter are the huge capital requirements and no spectrum allocation open by government. I still wonder what would happen if Digital Migration opens up more spectrum and it is given to competitors instead of you, how quickly your margins will probably fall.
Which is what I and a lot of others have been arguing. But every time the issue pops up they keep arguing about being the only one more suited to fully use it. The truth is afaic none of them should get any of it as that would have the most beneficial effect.
 
What Shameel was talking about is pricing, not expiry.

Data bundles expire because it's a service, not a physical product.

Milk, petrol, etc. are all physical products and don't expire. Once you bought it, you take it home and consume it at your leasure.

Access to a data network is a service, just like you pay for access to a gym, DSTV, etc.

I've been saying on this forum for many years, the first person that can turn data into a physical product you can buy and take home for later consumption will win the Nobel prize for Physics. :)
On that subject of physical products why do airtime vouchers expire.
 
Vodacom net profit last year was only R15.6 billion (R15 600 000 000). Obviously they can't afford to have bundles roll over.

R15,600,000,000 / 365 days / 24 hours / 60 minutes / 60 seconds = R495 / second

Doesn't sound that bad per second. :twisted:
 
Data bundles expire because it's a service, not a physical product.

I've been saying on this forum for many years, the first person that can turn data into a physical product you can buy and take home for later consumption will win the Nobel prize for Physics. :)

This is such a nonsense argument. If you sell it by quantity, it is defined, measurable, and consumption is measurable. As such it is no different to a physical product.

You old arguments were some waffle about the risk of your network getting overloaded if everyone all-of-a-sudden decided to use all their data: a completely unrealistic scenario. People will mostly use their data at a predictable rate. Don't know what happened to that line of justification.

And, who would believe slimy Scameelperd any more that they would believe Zuma?
 
With double the margin of your competitors, you shouldn’t have too much trouble finding investors and funding no?

Funny that the same investors say nothing on the fact that your CEO (and probably the rest of the management) is paid on the same scale than the CEOs of international competitors 10 times bigger.

But these competitors are able to provide unlimited calls, data, SMS for the price of a meager 5Go bundle at Vodacom. It sure makes life easier when customers accept to pay this.

French still on analogue TV?

The customers want to pay those high prices, or else they'd be with Telkom.
 
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