{"id":342949,"date":"2020-05-04T11:00:36","date_gmt":"2020-05-04T09:00:36","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=342949"},"modified":"2020-05-04T11:04:16","modified_gmt":"2020-05-04T09:04:16","slug":"the-power-is-in-your-hands","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/cellular\/342949-the-power-is-in-your-hands.html","title":{"rendered":"The power is in your hands"},"content":{"rendered":"

\u201cVodacom and MTN are ripping South Africans off\u201d. This is the view of many people who pay R99 for 1GB of prepaid data.<\/p>\n

The perception that Vodacom and MTN are charging too much for data is so pervasive that it sparked the social movement #DataMustFall.<\/p>\n

This movement gained so much momentum that it resulted in parliamentary hearings and investigations by ICASA and the Competition Commission into mobile data prices.<\/p>\n

Last year, the Competition Commission released its Data Services Market Inquiry report, saying there is scope for Vodacom and MTN to cut their mobile data prices by 30% to 50%.<\/p>\n

The Commission further said all mobile operators must offer South Africans on prepaid packages \u201ca lifeline of daily free data\u201d.<\/p>\n

Consumers rejoiced. After all, there is no sympathy for these two telecoms giants which have been making billions in profit.<\/p>\n

Vodacom and MTN subsequently reached an agreement<\/a> <\/strong>with the Competition Commission to reduce their data prices.<\/p>\n

Differentiated products<\/h3>\n

Following Vodacom\u2019s price cut announcement, many consumers complained this was still not enough.<\/p>\n

Telkom\u2019s executive of regulatory affairs Siyabonga Mahlangu climbed in<\/strong><\/a>, saying Vodacom\u2019s prices after the latest cuts are still far higher than theirs.<\/p>\n

Vodacom CEO Shameel Joosub hit back<\/strong><\/a>, saying they charge more than Telkom for mobile data because they offer a superior service.<\/p>\n

\u201cTelkom\u2019s positioning has always been to try and be the cheapest. Ours is to give the most value and provide a quality service,\u201d said Joosub.<\/p>\n

The Vodacom CEO said their value proposition is a balance between coverage, speed, price, and service.<\/p>\n

Joosub is right – this is how a competitive market works.<\/p>\n

The incumbents typically charge more for quality products, while newcomers try to wrestle market share away from them through lower prices.<\/p>\n

The table below provides an overview of what Joosub described in terms of quality and price.<\/p>\n

\n
\n\n\n\n\n\n\n\n
Network Operator<\/strong><\/td>\nNetwork Quality<\/strong><\/td>\nCoverage<\/strong><\/td>\nAverage Speed (Mbps)<\/strong><\/td>\nPrice<\/strong><\/td>\n<\/tr>\n
Vodacom<\/strong><\/td>\nExcellent<\/td>\nExcellent<\/td>\n32.23<\/td>\n“Expensive”<\/td>\n<\/tr>\n
MTN<\/strong><\/td>\nExcellent<\/td>\nExcellent<\/td>\n40.64<\/td>\n“Expensive”<\/td>\n<\/tr>\n
Cell C<\/strong><\/td>\nGood<\/td>\nGood<\/td>\n16.48<\/td>\n“Good”<\/td>\n<\/tr>\n
Telkom<\/strong><\/td>\nGood<\/td>\nGood<\/td>\n21.63<\/td>\n“Good”<\/td>\n<\/tr>\n
Rain<\/strong><\/td>\nGood<\/td>\nPoor<\/td>\n16.44<\/td>\n“Cheap”<\/td>\n<\/tr>\n<\/thead>\n<\/table><\/div>\n<\/div>\n

Network investments<\/h3>\n

Network investments – capital expenditure (capex) – provide a good indication of the network quality and coverage of mobile operators.<\/p>\n

Vodacom and MTN\u2019s capex dwarfs that of Cell C, Telkom, and Rain’s, which means that Vodacom and MTN have far better coverage and network quality.<\/p>\n

These network investments also benefit smaller operators. Cell C and Telkom can offer their subscribers country-wide LTE coverage thanks to roaming agreements they have with MTN and Vodacom.<\/p>\n

Rain, in turn, benefits from Vodacom\u2019s large network investments through an agreement which is helping it to roll out a 4G network.<\/p>\n

The chart below compares the network investment of the four major mobile operators in South Africa. Rain does not report its annual capex.<\/p>\n

\"\"<\/a><\/p>\n

You have a choice<\/h3>\n

Companies should be allowed to build a business model which they believe will create a sustainable business. This is how a free market works.<\/p>\n

If Vodacom and MTN want to build world-class networks and charge consumers high prices to use their networks, it is their choice.<\/p>\n

If Rain decides to only provide coverage in selected areas, and not have battery backup during load-shedding to save costs, it is also their choice.<\/p>\n

The most important thing is that consumers have a choice. They must be able to choose the service or company which suit their needs.<\/p>\n

This is the case in South Africa. Consumers can choose Vodacom or MTN\u2019s high-quality services at higher prices or opt for Telkom or Cell C\u2019s more affordable products.<\/p>\n

People also have a choice between affordable big data packages on 24-month contracts or less affordable prepaid products.<\/p>\n

They can even get an affordable, unlimited mobile data package from Rain for R479 per month<\/strong><\/a>.<\/p>\n

The mobile operators are also, for the most part, good at telling consumers what they get. This means there are no surprises.<\/p>\n

For example: If you buy 1GB of prepaid data which lasts for a month, that is exactly what you will get.<\/p>\n

So, if you are not happy with the product from one of these companies, choose another product. Or choose another provider. It is up to you.<\/p>\n

What does not make sense is complaining about a company, but when it comes to spending your hard-earned cash you still choose them as your preferred provider.<\/p>\n

This is an opinion piece.<\/em><\/p>\n

Now read: Mobile data prices \u2013 Why Vodacom is more expensive than Telkom<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"

People often complain that Vodacom and MTN\u2019s data prices are too high – but they refuse to move to more affordable options.<\/p>\n","protected":false},"author":2,"featured_media":200194,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[14],"tags":[355,35,42,109,41],"class_list":["post-342949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cellular","tag-cell-c","tag-headline","tag-mtn","tag-telkom","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/342949"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=342949"}],"version-history":[{"count":2,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/342949\/revisions"}],"predecessor-version":[{"id":350510,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/342949\/revisions\/350510"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/200194"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=342949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=342949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=342949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}