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

[Geoff.D]

How is it not relevant to the topic at hand? You seem to think that these telcos operate outside of the usual market forces. They don't.

But, I digress, you are right. Telcos operate in a free market, and basic economics dictates that demand will set the prices. If you want lower prices, get people to move to other telcos forcing MTN and Vodacom to reevaluate their pricing model.

Telcos have NEVER operated in a "Free Market". Telcos were and in many countries are still, the largest and most pervasive Cartel outside of the oil industry the World has ever seen.
I should start another thread to provide some history on how prices were determined in the good olde golden days of telco services in this country!

 

[Emjay]

Telcos have NEVER operated in a "Free Market". Telcos were and in many countries are still, the largest and most pervasive Cartel outside of the oil industry the World has ever seen.

Yet Cell C, Rain and Telkom are quite a bit cheaper as confirmed by a number of people here.

 

[Geoff.D]

Yet Cell C, Rain and Telkom are quite a bit cheaper as confirmed by a number of people here.

And even their cost structures are NOT cost-related!

 

[rpm]

From what I can gather there are two strong themes in this discussion:

• Many people feel they have a right to receive affordable, high-quality mobile data services.
• Many people support the government’s interference in the operations of private companies.

I think this is where I have a different view.

• I have trust in a free market system and in competition being the best way to achieve better quality services at lower prices.
• I do not believe the government should interfere in private companies, especially when it comes to things like price and property rights.
• The government can regulate state-sanctioned monopolies (like Telkom in the old days and Eskom) and ensure there is competition, but not start to dictate how companies must operate or price their goods.

 

[Emjay]

And even their cost structures are NOT cost-related!

So what? Demand drives prices. You should know this.

 

[rietrot]

From what I can gather there are two strong themes in this discussion:

• Many people feel they have a right to receive affordable, high-quality mobile data services.
• Many people support the government’s interference in the operations of private companies.

I think this is where I have a different view.

• I have trust in a free market system and in competition being the best way to achieve better quality services at lower prices.
• I do not believe the government should interfere in private companies, especially when it comes to things like price and property rights.
• The government can regulate state-sanctioned monopolies (like Telkom in the old days and Eskom) and ensure there is competition, but not start to dictate how companies must operate or price their goods.

It's is always people's victim mentality. They will go and queue for a Vodacom contract, but complain that Vodacom is cheating them as soon as they leave the store with the new phone they wanted.

 

[Johnatan56]

From what I can gather there are two strong themes in this discussion:

• Many people feel they have a right to receive affordable, high-quality mobile data services.
• Many people support the government’s interference in the operations of private companies.

I think this is where I have a different view.

• I have trust in a free market system and in competition being the best way to achieve better quality services at lower prices.
• I do not believe the government should interfere in private companies, especially when it comes to things like price and property rights.
• The government can regulate state-sanctioned monopolies (like Telkom in the old days and Eskom) and ensure there is competition, but not start to dictate how companies must operate or price their goods.

But it can't be a free market system, spectrum is limited and only a handful of companies (4) can operate. Rain could possibly be added, but their spectrum range is not great for mobile phones, so they're not really a competitor.
CellC brought prices down quite a bit but basically went under because of terrible management decisions, Telkom is bringing the price down a bit but not substantially while posting quite high profit margins on mobile.

And are they truly private companies if they're using limited government resources, namely spectrum?

 

[DreamKing]

But it can't be a free market system, spectrum is limited and only a handful of companies (4) can operate. Rain could possibly be added, but their spectrum range is not great for mobile phones, so they're not really a competitor.
CellC brought prices down quite a bit but basically went under because of terrible management decisions, Telkom is bringing the price down a bit but not substantially while posting quite high profit margins on mobile.

And are they truly private companies if they're using limited government resources, namely spectrum?

I just want to know, can you tell us how "limited" is the spectrum?

does SA really have the capacity for 3 players only? how many operators we may have (max)?

 

[Johnatan56]

I just want to know, can you tell us how "limited" is the spectrum?

does SA really have the capacity for 3 players only? how many operators we may have (max)?

Well, that's a really complicated question, because each spectrum band has different pros and cons, the higher the frequency, the more throughput you can have, but signal range drops off drastically. Also putting bands together greatly increases throughput. E.g. DSS (dynamic spectrum sharing) is going to have a huge impact in the mobile and your tiny operators might be able to join then, but whoever has more blocks of spectrum will have a huge performance advantage, especially in the sub 1GHz which has really good range.
If you check: https://en.wikipedia.org/wiki/List_of_mobile_network_operators_of_Europe the max is one case of 7 and 6, some of 5, and those large ones usually sharing networks with each other. Norm is 3.

 

[Geoff.D]

Spectrum is a natural resource, administered and regulated by governments in terms of rules and regulations developed by consensus by the ITU.
Spectrum in itself does not determine or limit the number of operators possible. It is economics that does that.
Some countries are better at regulation their markets than others ---- that is all. Here we have a situation where free market forces are not being allowed to operate efficiently. Who must step in and get that fixed if not government???
We all "need" connectivity to survive. We can't do without it. Something has to happen to correct an imbalance -- and that is the job of the competition commission. The CC should only step in when required and if there ever was a time in our history where that is nec, it is now. The country is on the edge of a catastrophe. Market forces will not fix it. We cannot afford to see a total economic collapse before the corrections are made.

 

[Swa]

I just want to know, can you tell us how "limited" is the spectrum?

does SA really have the capacity for 3 players only? how many operators we may have (max)?

From what I know most of the lower sub 2GHz bands have already been assigned. Apart from the limited digital dividend there isn't much left. They have to start using spectrum more efficiently with investment and reassignment. In countries with like 7-8 operators most of them have to make due with 20-40MHz of spectrum.

 

[Geoff.D]

From what I can gather there are two strong themes in this discussion:

• Many people feel they have a right to receive affordable, high-quality mobile data services.
• Many people support the government’s interference in the operations of private companies.

I think this is where I have a different view.

• I have trust in a free market system and in competition being the best way to achieve better quality services at lower prices.
• I do not believe the government should interfere in private companies, especially when it comes to things like price and property rights.
• The government can regulate state-sanctioned monopolies (like Telkom in the old days and Eskom) and ensure there is competition, but not start to dictate how companies must operate or price their goods.

All perfect in a perfect World where Democracy works as intended and where the free market works because ALL believe in it. We do not live in that World in this country.

So, here is a challenge to all of those bemoaning the move by the CC. Show us your displeasure by immediately giving up your mobile connectivity! If you do, tell us why you are going to do it and what alternatives you have available other than going to a live in a cave somewhere where connectivity becomes irrelevant to your lives.

 

[rietrot]

Spectrum is a natural resource, administered and regulated by governments in terms of rules and regulations developed by consensus by the ITU.
Spectrum in itself does not determine or limit the number of operators possible. It is economics that does that.
Some countries are better at regulation their markets than others ---- that is all. Here we have a situation where free market forces are not being allowed to operate efficiently. Who must step in and get that fixed if not government???
We all "need" connectivity to survive. We can't do without it. Something has to happen to correct an imbalance -- and that is the job of the competition commission. The CC should only step in when required and if there ever was a time in our history where that is nec, it is now. The country is on the edge of a catastrophe. Market forces will not fix it. We cannot afford to see a total economic collapse before the corrections are made.

What if the answer to a problem that government creates is not more government?

 

[Swa]

What if the answer to a problem that government creates is not more government?

Has none government worked till now?

 

[Geoff.D]

What if the answer to a problem that government creates is not more government?

Sure --- Zimbabwe phase 2.

Those that know and attended some of the satellite courses I used to run will know that way back in 2001 I had a slide entitled "Zimbabwe is a Basket case". History has shown that slide and its contents to have been spot-on correct.

 

[rietrot]

Has none government worked till now?

Uptil now we've only had government involved.

 

[Urist]

Sure there is price fixing but 50% sounds like a disaster causing thumb-suck. Why not bring it down gradually so these companies and shareholders can plan ahead and absorb the shock

 

[Geoff.D]

Sure there is price fixing but 50% sounds like a disaster causing thumb-suck. Why not bring it down gradually so these companies and shareholders can plan ahead and absorb the shock

Because they have already been given plenty of chances and everyone knows they won't. No, only drastic action will kick them into doing something.

 

[Swa]

Uptil now we've only had government involved.

Right, let's make it unregulated. 100 networks with a free for all on spectrum. Let's see how that works for everybody.

 

[rietrot]

Right, let's make it unregulated. 100 networks with a free for all on spectrum. Let's see how that works for everybody.

Yeah choice is a bad thing. Image having to choose between a 100 networks. Obviously people need the government to pick 1 or 2 for them.

That's just such a fscking ridiculous strawman.