Vodacom charges more than Telkom for mobile data because it offers a superior service, according to Vodacom CEO Shameel Joosub.
Vodacom and the Competition Commission have reached an agreement which will see the mobile operator cut its monthly mobile data bundle prices by over 30%.
The company has also agreed to extend personal discounts to customers in 2,000 low-income and impoverished areas.
Despite the price cuts, Vodacom’s data prices will still be higher than the mobile data products offered by Telkom.
Speaking to eNCA, Joosub explained that each mobile operator in South Africa has a different commercial strategy.
“Telkom’s positioning has always been to try and be the cheapest. Ours is to give the most value and provide a quality service,” said Joosub.
The Vodacom CEO said their value proposition is a balance between coverage, speed, price, and service.
Joosub agreed that Vodacom has always charged a premium compared to Telkom, but said this is justified because they offer a better service.
He said while there will always be customers who are only looking for the lowest price, they will not get the quality of service, speed, and coverage they receive from Vodacom.
Joosub added that its consumers will benefit from mobile data price cuts of up to 40% on all monthly bundles.
He said they will also benefit from many value-adds associated with Vodacom’s mobile products.
Vodacom remains popular despite higher prices
While Joosub may be criticized for his comments, his strategy of providing a quality service for a higher price is working.
A recent visit to Vodacom and Telkom stores showed that the Telkom store was empty, while the Vodacom store was packed.
This was partly a result of Telkom not being able to assist customers because its systems were down. This is a regular occurrence with Telkom, however.
Vodacom’s financial results also show that consumers continue to support the company despite more affordable offers being available from other operators.