Research ICT Africa (RIA) recently released a report on\u00a0mobile prices in South Africa, but some of the comments made about Vodacom may have been premature.<\/p>\n
The report found that Vodacom\u2019s price increases in May 2015 were unjustified, based on the money which Vodacom spent on its network and operations.<\/p>\n
Report author Safia Khan told Fin24<\/strong><\/a> that the mobile operators, including Vodacom, made claims \u201cthey have to increase investment\u201d, and therefore\u00a0had to increase prices.<\/p>\n \u201cIf you look at capital expenditure per subscriber, which would measure investment, you\u2019ll see that this has been on the decline over time since 2012,\u201d said Khan.<\/p>\n \u201cTo maintain a good quality of service, investment per subscriber should be increasing.”<\/p>\n \u201cSo, they claim that they\u2019re facing these increases in investment costs and what have you, but if you look at their investment per subscriber, it\u2019s actually been on the decline.\u201d<\/p>\n Vodacom\u2019s capital expenditures (Capex) for the last financial year was R8.6 billion \u2013 which works out to R269 per customer.<\/p>\n This is much higher than the previous financial year’s Capex of R6.9 billion, or R218 per customer.<\/p>\n Operating expenses have also increased. Vodacom\u2019s operating expense as a percentage of service revenue increased from 22.3% in the 2013-2014 financial year to 23.5% in the 2014-2015 financial year.<\/p>\n After MyBroadband asked RIA for feedback regarding Vodacom\u2019s financial data, an updated report was sent out. The changes are reflected below.<\/p>\n The report added the following line in its conclusion: “The increased investment by Vodacom is good news for consumers and the price hikes may be worth it for the increased quality of service”.<\/p>\n The report changes suggests that the latest financial data from Vodacom made RIA backtrack on its previous statement that Vodacom price increases were not justified.<\/p>\n However, Christoph Stork, Senior Research Fellow at Research ICT Africa, said they were not wrong.<\/p>\n \u201cWe only had access to FS2014 data and pointed out that Vodacom and MTN may have increased prices to invest more. This has now been confirmed,\u201d said Stork.<\/p>\n A warning to Vodacom and MTN: higher prices will hurt you<\/a><\/strong><\/p>\nLooking at the facts<\/h3>\n
Changes to the research report<\/h3>\n
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Research ICT Africa explains<\/h3>\n
More on MTN, Vodacom<\/h3>\n