Mobile tariffs may increase
Speaking at the recent Vodacom results presentation CEO Alan Knott-Craig said that while there was a downward trend in cellular and telecoms pricing, inflation, potentially higher electricity prices, a lack of electricity and higher fuel costs were putting telecoms prices under pressure.
The Vodacom CEO said that Vodacom had decreased tariffs over the past five years, but that factors such as inflation, electricity supplies and costs were “becoming an issue”.
Knott-Craig said that with inflation rates of between 5% and 6% it was possible to keep tariffs stable or even decrease prices, but that current inflation levels is putting pressure on all companies.
Knott-Craig said that people often underestimate the impact of factors such as electricity costs and inflation on the cost of providing a communications service, and that a continuation of current economic trends may see an increase in cellular tariffs.
Knott-Craig said that he really hoped that tariffs would decrease as it was the “way it should go to increase communication and penetration, but if the cost base continues to increase at the rate we have seen over the last few months it will be difficult for any industry to maintain tariffs and not increase rates.”
Knott-Craig said that Vodacom did not have any plans to increase tariffs, but that it was the first year in over five years that it was thinking about increasing rates.
Telkom CEO Reuben September also hinted that the current high inflation rates were influencing operational costs and tariffs. September said that with inflation going up and prices going down “in real terms, prices have reduced substantially”.
Cellular prices – give your views
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