Don’t believe that Vodacom and MTN will give up massive OOB profits

When ICASA releases regulations preventing mobile operators from billing for out-of-bundle usage without subscriber consent, it will likely cause mobile data prices to increase, stated the Rapport.

According to the report, mobile networks generate at least a third of their revenue from data usage.

Citing Vodacom’s latest annual report, Rapport stated that a significant portion of those revenues come from out-of-bundle usage.

It is naive to think that mobile operators will give up the significant profits they generate from out-of-bundle charges, added spokesperson Koketso Moeti.

“70.6% of mobile contract revenue is in-bundle, reducing exposure to the risk of discretionary spend in out-of-bundle usage,” said Vodacom.

However, this means the remaining 29.4% of contract revenue is out-of-bundle. This also doesn’t take into account the out-of-bundle spend of prepaid subscribers, stated Rapport.

For Vodacom, data makes up nearly 40% of service revenue in South Africa. At the end of March 2017, it had 16.4 million subscribers who were using data bundles – 83% of all its data customers.

Vodacom said that as a result of initiatives such as its Just 4 You bundles, it has significantly increased bundle sales and driven down the effective price of data on its network.

During its last financial year, it reduced the effective price of data by 16%. Over the last four years, the decrease was 54.1%, said Vodacom.

Now read: The R21,729 difference between in-bundle and OOB data prices

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Don’t believe that Vodacom and MTN will give up massive OOB profits