Mobile data specials – why not permanent?

Vodacom recently announced that it will extend its mobile data promotions, which were set to expire on 6 September, until 6 February 2014.

Vodacom has also migrated some of its subscribers on legacy to much higher data packages at the same price. This basically brings them in line with current data prices.

Vodacom explained that it is in the process of reviewing tariffs by getting rid of some of the higher price structures and at the same time launching new products with much lower prices.

“On the other hand, we balance this with promotions since they give us flexibility in that they allow us to quickly respond to changing market conditions,” Vodacom spokesperson Nomsa Thusi said.

Vodacom said that their promotional prices will not be made permanent – for now.

Why not go permanent?

The latest extension means that Vodacom’s contract data promotion would have run for nearly a year after it was first launched in March 2013.

Vodacom is not alone here. MTN, Telkom Mobile, and Cell C have also been running numerous mobile data promotions for some time.

This raises the question of why cellular operators do not make their promotional prices permanent.

According to a well-placed industry player, the reason is simple: If the promotional data prices from Vodacom and MTN are made permanent, they may face predatory pricing complaints from their competitors.

The Independent Communications Authority of South Africa (ICASA) sees Vodacom and MTN as companies with significant market power, which means that they may not drop prices to a level which may represent margin squeeze and predatory pricing.

Curiously this means that current regulation may prevent Vodacom and MTN from permanently dropping mobile data prices, which will benefit consumers.

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Mobile data specials – why not permanent?