Cellular networks being ‘hypocritical’

Cellular network operators were being “hypocritical” by cancelling subscribers while they were urging the Independent Communications Authority of SA (Icasa) to look at access to the service rather than interfering in the pricing model, James Hodge, a partner at economics consulting firm Genesis Analytics, said last week.

Hodge said Vodacom’s decision to delete 3.5 million SIM cards from its system was contrary to what the group had told Icasa during the hearings on mobile pricing and the decision should be "questioned".

"They told Icasa to look at ways to get people on the network and keep them but now they are doing the contrary."

Vodacom said last week it would cut off 3.5 million SIM cards from its network because the users were spending less than R1 a month.

The company said those SIM cards did not have any revenue that generated activities because calls were forwarded to voice mail and the messages were never retrieved.

If the messages were retrieved, the SIM cards were not going to be cut off because the customers would be deemed active.

Vodacom said last week that local subscribers increased by 6.4 percent to 20.4 million.

MTN lost 36 000 subscribers in the first quarter of this year. MTN and Cell C disconnect inactive subscribers after 90 days and 120 days, respectively. MTN has just more than 10 million subscribers and Cell C has 2.8 million active customers.

An analyst who requested anonymity said the subscriber numbers were misleading because networks counted SIM cards that were not active.

Cell C said it "has always reported active customers". Hodge said the subscriber numbers "were absurd" and uniformity on how subscribers were counted was needed.

MTN managing director Maanda Manyatshe called for transparency to "ensure the accurate, impartial statement of the market share of each cellular operator".

Manyatshe said the industry should apply a uniform measurement that would "allow like-for-like comparisons when judging market share and ARPU [average revenue per user] performance. Clearly, this will result in a more credible view of network operator performance in South Africa."

As operators increased subscribers, ARPU was declining. Vodacom’s ARPU declined to R121 a month in the first quarter of the year from R139 last year. MTN’s ARPU declined to R155 from R169 last year.

However, analysts agree that a reduction in subscriber numbers will increase ARPU, which has declined because operators signed up low-end users.

Vodacom’s move to delete SIM cards will also reduce the burden of having to register more than 17 million prepaid subscribers as required by the Regulation of Interception of Communications and Provision of Communication-related Information Act.

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Source:  Business Report

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Cellular networks being ‘hypocritical’