Vodacom, MTN must reduce prices by 50% and give users free data

Not quite sure how this got thrown into the mix but ISP's have been complaining for years:

That Telkom’s wholesale business Openserve must reach an agreement with the commission on substantial price reductions for IPConnect to reduce “excessive pricing concerns that are highlighted in the main report”. IPConnect is the service bought by Internet service providers to access Openserve’s wholesale network made up of ADSL and fibre lines.

This is very interesting and a pretty good idea:

That all mobile operators must reach agreement with the commission within three months to inform each subscriber on a monthly basis on the effective price of all data consumed by such a customer.
 
Like Vodacom (-5%) and MTN (-6.4%), their shareholders also see their profits being slashed:

751205
 
Time for these companies to start scaling down business in South Africa and focus more on expanding abroad. Shrink the network capacity and offer South Africans very limited and slow access to the Internet on 3G or lesser bands. This cannot be good for any business.
 
When regulators ruled the OOB shark should come to an end, a mobile operator did so, however used a loophole to keep the OOB shark alive (send prompts to the user to auto-recharge every X mb/gb usage). Similar to this instance, Vodacom and MTN will reduce prices, but they will find a technicality/loophole to recoup the gravy spillage.

Mobile data prices should be reduced, but at the same time, regulators can't expect operators to cut their prices and expect operators to deliver the same service levels.
 
Why not start with the government monopoly on taxation?

I bet more people spend money on taxes like vat, income taxes and fuel levies than they do on a R50 data bundle.

or better yet, mandatory pricing for the taxi industry. R5 for a trip no matter the distance.


Pay's government R25000 in taxes for the month (income tax + VAT). This is fine.

Buys R200 data bundle for the month. Nope, too expensive. It must be free.
 
Not quite sure how this got thrown into the mix but ISP's have been complaining for years:



This is very interesting and a pretty good idea:
Was this also ruled upon today? Does the CC even know that ADSL is history or will they revive it by another ruling?
 
Is the CC drunk? When do they start forcing free stuff on other industries? Hint start with Eskom (monopoly), I'd like some free electricity every day, human rights and all.

Would you prefer them to handout fines and then complain about where the money disappears to in the gov kitty?

Deja vu hey? Didn’t have this argument on mybb about how these CC never directly benefit consumers.
 
Well, all I can see is more job losses, same as when the rocket scientists decided to implement regulated Call Termination rates across the industry. How many people lost their jobs when Service Providers like Nashua and Altech Autopage had to close down? Now, look at what is being asked. Reduce data tariffs with between 30 and 50%, while ensuring that all bundles lower than 500MB is priced at the same rate as the 500MB bundle. ENforce this under regulation, i.e. ICASA EUSSC, which already block OOB usage. Definitely a snake in the grass, Government pushing hard for cost control at a retail level, hence damaging the ability of the companies to show a return to its investors, share prices tank, the PIC increases its share of ownership, until the entire Telecoms industry is firmly in the grip of Government, and the prices are raised with no regard for who can and cannot afford it, because greedy does what greedy wants. Sounds very communist in approach right? Also resonates with CR's frog in a pot of water analogy. But wait, what happens when government don't collect their full 15% VAT on each data bundle bought and looses out on the 29% company tax on EBIT? More taxes required from you and I. Sad to see this happening...this country is in a nose dive beyond correction.
 
Well, all I can see is more job losses, same as when the rocket scientists decided to implement regulated Call Termination rates across the industry. How many people lost their jobs when Service Providers like Nashua and Altech Autopage had to close down? Now, look at what is being asked. Reduce data tariffs with between 30 and 50%, while ensuring that all bundles lower than 500MB is priced at the same rate as the 500MB bundle. ENforce this under regulation, i.e. ICASA EUSSC, which already block OOB usage. Definitely a snake in the grass, Government pushing hard for cost control at a retail level, hence damaging the ability of the companies to show a return to its investors, share prices tank, the PIC increases its share of ownership, until the entire Telecoms industry is firmly in the grip of Government, and the prices are raised with no regard for who can and cannot afford it, because greedy does what greedy wants. Sounds very communist in approach right? Also resonates with CR's frog in a pot of water analogy. But wait, what happens when government don't collect their full 15% VAT on each data bundle bought and looses out on the 29% company tax on EBIT? More taxes required from you and I. Sad to see this happening...this country is in a nose dive beyond correction.

Cool.. but where is the capitalism and competition is awesome argument? Remember capitalism goes hand in hand with competition. But do we have an open market?

No. So can you claim that it should be regulated as such?

Ironically this sort of regulation has happen in India, Kenya, Tanzania.. exactly the places where data was holding back their economy and once regulation put in place to force the hand of business, MNOs, which didn’t want competition nor price controls.. their respective IT sectors boomed.

So yes.. telecoms firms will take a knock but there will be growth in other services.

Lastly.. let’s get real about IT in SA. Who is it for? To me, who has travelled in Africa and India.. SA is one of the stupidest countries you can find. We have 58m people but we try very hard to cater for a narrow populous without realizing that we need to expand. You see this argument play out over, over and over.. and honestly it’s dumb.

Wrt Eskom.. yes, it’s a monopoly and yes it needs to be opened up and I’m sure that’s coming. Unions gonna cry.
 
Cool.. but where is the capitalism and competition is awesome argument? Remember capitalism goes hand in hand with competition. But do we have an open market?

No. So can you claim that it should be regulated as such?

Ironically this sort of regulation has happen in India, Kenya, Tanzania.. exactly the places where data was holding back their economy and once regulation put in place to force the hand of business, MNOs, which didn’t want competition nor price controls.. their respective IT sectors boomed.

So yes.. telecoms firms will take a knock but there will be growth in other services.

Lastly.. let’s get real about IT in SA. Who is it for? To me, who has travelled in Africa and India.. SA is one of the stupidest countries you can find. We have 58m people but we try very hard to cater for a narrow populous without realizing that we need to expand. You see this argument play out over, over and over.. and honestly it’s dumb.

Wrt Eskom.. yes, it’s a monopoly and yes it needs to be opened up and I’m sure that’s coming. Unions gonna cry.
South Africa has a mixed economy, partly government controlled.

All fair on the India example, yet, India does not have a communist based ruling party, or am I incorrect? Competition in South Africa comes at a cost, while government, who should act as an enabler in its macro economic role, in turn it acts as a detractor. Not releasing spectrum, not recognizing that the SA market is not big enough to sustain 4 Mobile players while open access fibre is only now starting to reach scale while the very same government kept on protecting their Telco of choice, Telkom.

I previously posted on my view on the application of supply and demand, especially in the Telecoms market. So in reply to your point on South Africa catering for a narrow populous, this burden should not be moved onto a MNO, but should be placed at the door of Government for failure to create jobs through adequate investment in programmes and sectors where jobs can be created, enabling active participation in the wider economy. You may not realize that MNO's contribute heavily to the informal sector through SIM and airtime sales. Informal traders are RICA agents who provision SIM cards, and dispenses airtime from their 3G feature or very entry level smart phones. Imagine what happens to these participants in the economic system when prices are controlled. Similar to the CTR impact on Service Providers. Government has then again failed the marginalized.

On Eskom, I agree wholeheartedly, but that is a discussion for another day, over a cucumber sandwich and cup of tea.

Thank you for this positive engagement, appreciated.
 
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Time for these companies to start scaling down business in South Africa and focus more on expanding abroad. Shrink the network capacity and offer South Africans very limited and slow access to the Internet on 3G or lesser bands. This cannot be good for any business.
They've already done that. What people are forgetting is that for years the only two realistic providers colluded to have exactly the same prices and it's only after other options became available that they started having differentiating products. They were never brought to book for this.

Thing is they don't actually need more spectrum to expand if they wanted to. What you can achieve with spectrum you can achieve with reduced power as well. More spectrum is actually a messy way to achieve it as now most of it lies unused.
 
Would you prefer them to handout fines and then complain about where the money disappears to in the gov kitty?

Deja vu hey? Didn’t have this argument on mybb about how these CC never directly benefit consumers.
Force free data from 2 providers, all consumers move to these two providers, kills of cellc and Telkom. Mission accomplished.

Sorry the ANC must stay away.
 
I think you're not quite understanding. They're saying that data should be affordable to the masses and that if the masses are consuming data regularly in tiny quantities due to their economic circumstances they should at least pay the same price per MB as if a 500mb bundle was purchased. The operators have been gouging the low end of the market for years.
You are mistaken. I understand perfectly. Funny thing is, a 100g tin of Ricoffy costs R18.99, but the 750g tin costs R79.99 (R9.37 per 100g). Surely they should focus on this price gouging next...
 
Yes they must fall who doesn't like it can leave
Q
 
You are mistaken. I understand perfectly. Funny thing is, a 100g tin of Ricoffy costs R18.99, but the 750g tin costs R79.99 (R9.37 per 100g). Surely they should focus on this price gouging next...

Well if Vodacom was pricing Ricoffy the 100g tin would be closer to R30. You’re also not considering that the coffee requires the tin can cost too which skews the base cost. The last I checked if I bought 50x10mb or 1x500mb over the same timeframe the difference in the cell providers cost should be negligible.
 
Well if Vodacom was pricing Ricoffy the 100g tin would be closer to R30. You’re also not considering that the coffee requires the tin can cost too which skews the base cost. The last I checked if I bought 50x10mb or 1x500mb over the same timeframe the difference in the cell providers cost should be negligible.
The tin is not close to being 7x more, so cost increase should be even less fhan linear.
Your argument about R30 is purely hypothetical and nonsensical. Also irrelevant.
Whether its 5x data packages, or 5x cans of coffee, the original argument stands. So 7 cans of 100g ricoffy should cost the same as 1 can of 700g ricoffy according to your argument. Sorry, no.
Price controls are a fundamental cornerstone of communism, and should be throroughly rejected.
 
If companies resort to predatory pricing practices over years and years, no one should be surprised when governments step in and take action. Long overdue that mobile data pricing returns to a cost related basis and that companies prove their case when required to do so.

If there is a case to be made for a higher price for prepaid versus post paid then prove it.

If their is a cost difference between managing smaller packages compared to larger packages, then prove it.

The noise the operators are making is precisely because they probably cannot and will never be able to do so.

And it has nothing to do with Communism either.

And it will be even harder to make the case based on normal supply and demand principals.
No, the only conclusion that can be drawn is corporate greed.
 
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