The simple reason Telkom’s contract prices are cheaper than prepaid

Telkom is known for offering excellent value-for-money when it comes to mobile products.

The company has topped MyBroadband’s customer satisfaction rankings for many years, thanks, in part, to its SmartBroadband Wireless contracts and prepaid products.

These offer large data packages at prices as low as R5.24 per GB.

However, this is not the case when subscribers purchase once-off data bundles for their smartphone – priced at R99 for a 1GB data bundle.

MyBroadband asked Telkom for feedback regarding the large price difference, and it said this is linked to network planning and capacity management.

“Contract agreements allow for better network planning and volume management over a fixed period of time,” said Telkom.

“Prepaid usage is, however, difficult to predict, due to its flexible structure. To ensure that the network has sufficient capacity to accommodate the unpredictability, it is charged at a premium.”

In-bundle vs OOB

Telkom also has the lowest out-of-bundle rate in the South African mobile industry, at R0.29 per MB.

Telkom offers this low rate across all its data and voice plans, with no exclusions or limitations.

The operator is a good example to others, but its out-of-bundle rates are still much higher than its in-bundle rates.

The reason for the higher out-of-bundle prices are the same as for prepaid usage, it said.

“The out-of-bundle rate of R0.29 per MB is based on a pay-as-you-use principle and the customer does not commit to a specific volume of data,” said Telkom.

“Data contract rates or data bundles are priced cheaper, since there is a commitment from the customer in terms of volume of data spend.”

To give users control over this, Telkom offers spend limit functionality that can be assigned, and enables customers to manage and control OOB spend.

Now read: Samsung Galaxy S9 – Telkom FreeMe contract prices

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The simple reason Telkom’s contract prices are cheaper than prepaid