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

[Bewlen]

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.

So you are suggesting a "bureau" of sorts, where prices should be approved, or investigated and regulated if deemed "predatory". Negating the free market principles. And that has "nothing to do with communism"?

Fact is, players like Rain and Telkom are disrupting with lower prices, and they have seen huge growth. As the trend continues, it will force prices down if consumers see and exploit the value.

If the competition comm was serious, should they not rather force the release of spectrum?

What we are seeing now, is an experiment in populism. Sounds great to legislate prices down for data. But what if your industry is next? Lower prices legislated for building material? Or groceries? Or cars? Can you imagine the job losses? As the ANC loses grip, this is a great tool to entrench populism, but completely destroy the economy.

 

[Budza]

Watch the 500MB Bundle price.

That'll jump, so the lower tiers can "match".

Magical discounts on 750MB or 1GB bundle, as currently.

 

[Geoff.D]

The much more important debate is what the mandate of ICASA is.
In my opinion and backed up by the views of the ITU and other international organisations such as the GVF, it is NOT ICASAs job to ensure company profitability. Their job is only to define the rules and regulations for operators delivering communication services in South Africa.
It is the mandate of the CC to ensure and regulate free and fair competition. So, ICASA's views and opinions on pricing are actually irrelevant.

 

[Neuk_]

While I agree with reducing data prices, forcing a company to give anything away for free is ridiculous.

 

[DreamKing]

"competition commission" must change to "communism commission".

the real competition is to open the market and let more competitors in the field.

insane

 

[konfab]

Can the competition commission also force AMD to make Ryzen 3700s free for everyone ?

 

[Gaz{M}]

It's not like people are forced to use Vodacom or MTN. South African consumers are just uninformed and too brand loyal. They are stupid if they pay too much for small data bundles when alternatives exist.

Also, geographically, it is very expensive to cover the whole country, which is why neither Telkom nor Cell C have full population coverage.

Lastly, do Government realise that once you reduce profits of private companies, no more fat income tax cheques from those companies, and GEPF pension funds get smaller returns on shares and dividends.

I'm not saying there isn't room for reduced pricing, but Gov must do their bit first, before penalising private business. ie: licence spectrum, you muppets. Reduce the cost of doing business, reduce taxes and reduce red tape.

 

[DreamKing]

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.

from anc's perspective, that is only "evil" people with money can afford to pay taxes. so that is fine.

for the "good" people voting for anc, they are poor, so R200 for them is too much.

 

[My_King]

OH NO, techies will now have to refill the "spectrum" stores more frequently.

Expect towers to run out of "stock" soon.

 

[DreamKing]

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.

I would prefer they will force the government to something, not the private sector.

 

[konfab]

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.

Do you really believe that the CC is benefiting consumers here?

All this will eventually do is make everything more expensive for everyone. Someone has to pay for "free" stuff. Which means that Vodacom/MTN will simply increase the prices of sms and calls. Or they will simply start shutting down towers that are too expensive to keep going because the other criminals in the country also think they are entitled to MTN and Vodacom's property.

 

[Lupus]

Why not do this with dstv as well then

Because DSTV is a luxury, though cellphone data isn't anymore.

 

[Stonemason]

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.

Actually, not everyone uses the full bundle of data they get with a contract while the small prepaid bundles are usually completely utilised. That makes a very good argument for different prices.

 

[quovadis]

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.

I did a quick mental mathematical comparison of the ratio of 10mb of data to 500mb of data and applied the price ratio to the 100g coffee illustrate the point. And no, I was stating that there is a base cost of the tin container (ie. 10 small cans costs more than the equivalent mass of coffee in 1 larger can) which needs to be considered only in the case of coffee, not that the ratio should be linear - something that data does not have to the same extent.

The duopoly has resulted in a price discrimination towards poorer customers.

 

[maumau]

Price is one thing, data expiring is another - that's what they should clamp down on.

 

[konfab]

Because DSTV is a luxury, though cellphone data isn't anymore.

Pick one: a bag of potatoes for your kid's supper or a 500mb data bundle.

It is a complete and utter luxury.

We have this evil, racist, homophobic and imperialistic concept of libraries. These pillars of racism have (or should have) free wifi hotspots. With fibre connections, this can be really low cost. This is how you liberalise information for poor people.
You don't do it by expropriating the assets of private companies.

 

[quovadis]

So you are suggesting a "bureau" of sorts, where prices should be approved, or investigated and regulated if deemed "predatory". Negating the free market principles. And that has "nothing to do with communism"?

Free market principles includes regulatory intervention or do you think trade agreements and tariffs and duties don't exist? It's not communism, its to avoid predatory behaviour.

Fact is, players like Rain and Telkom are disrupting with lower prices, and they have seen huge growth. As the trend continues, it will force prices down if consumers see and exploit the value.

Tell that to someone in a rural area where there is no reception and don't have the luxury of choice.

f the competition comm was serious, should they not rather force the release of spectrum?

Once again, if you consume the same amount of data over the same amount of time but purchase on a piecemeal basis due to economic factors how would spectrum fix that? Spectrum may have an affect on overall price but why would the pricing ratio change?!?!

What we are seeing now, is an experiment in populism. Sounds great to legislate prices down for data. But what if your industry is next? Lower prices legislated for building material? Or groceries? Or cars? Can you imagine the job losses? As the ANC loses grip, this is a great tool to entrench populism, but completely destroy the economy.

Sorry to break it to you but selling 15MB of internet data so that someone can send an email or two with a CV attached or watch 1 minute of Youtube at 240p for R10 is price gouging no matter how you look at it. All the competition commission is saying is that that 15MB shouldn't cost R10, it should cost R3,33 which is still damn horrific by any standard.

 

[My_King]

Price is one thing, data expiring is another - that's what they should clamp down on.

Jip

 

[quovadis]

You don't do it by expropriating the assets of private companies.

You're not expropriating the assets of private companies - you're regulating a duopoly where competition has demonstrably failed.

 

[konfab]

You're not expropriating the assets of private companies - you're regulating a duopoly where competition has demonstrably failed.

It is expropriation as the state is taking control of a private company's assets.

And competition hasn't "demonstrably failed".

1) Nothing is stopping people from switching to Telkom.
2) The price has remained mostly the same for the past 6 years, which means it has actually been decreasing because of inflation.

So consumers have choice, they can easily switch to whomever they want and prices across the industry are decreasing. On what planet are you living on where this is a "market failure"?
And just remember, this is inclusive of load shedding (more $), stupid policies around spectrum (more $), more taxation (more $), high amounts of theft (more $).

Maybe if the government sorted out the electricity supply and crime that drives up the cost of running a business, we would see even faster decreases.