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MTN and Vodacom are charging up to 2639% MORE on out-of-bundle rates. How do network providers justify this and how will they fix it?
The network provider industry in South Africa is a constant headline-grabber. If we’re not reading about the government’s plan to hijack all the spectrum, it’s something to do with the Big Four. Pointing fingers, arguing about one another’s adverts, fighting over towers, disappearing data – the list goes on.
With all the ups and downs going on at Vodacom, MTN, Telkom and Cell C, it may be difficult to stay up to date. As consumers who all use the services these companies provide, staying informed is critical.
In this article we take a look at the news going around. How many subscribers do they have? What’s going on with the ridiculous out-of-bundle pricing? And of course, MTN reveals its new data packages and prices.
We warn; some of this article may incite phone-throwing.
It was reported that, at the most extreme, out-of-bundle data rates could be 2639% more expensive.
While on contract, a 20GB data bundle with Vodacom costs R329. This works out to 2c per MB. Out-of-bundle rates, though, work out to 44c per MB. The same amount of data on prepaid costs R999.
Vodacom attempted to counter this by saying it is normal business practice to offer discounts to clients who make longer term commitments. A spokesperson for the company also said that voice and data prices have declined by more than 40% over the past three years.
MTN’s Jacqui O’Sullivan said that contract data offers include a fixed commitment. Once-off and recurring bundles are consumed when needed. So, customers are able to add and remove data at any time.
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Which Service Provider Has The Most Subscribers?
Network service providers, as listed companies, are required to reveal their financial results every year. These results also detail the amount of mobile subscribers the company had at the end of the year. So, which of the Big Four has the most subscribers in South Africa? Vodacom emerged on top, by quite a substantial amount, with 37.1 million subscribers. MTN came in second with 29.5 million. MTN also noted that the results did not reflect its postpaid or prepaid subscriber share. The company has changed how it reviews subscriber definitions. In the past, subscribers were defined as all customers whose MSISDNs are active on the network. Now, only customers who recharge on the network are counted.“The new subscriber definitions that MTN has rolled out is to ensure that MTN is consistent across operations for defining subscribers,” said MTN spokeswoman Jacqui O’Sullivan.Third on the list saw Cell C come in with 16.3 million and last, Telkom declared a subscriber base of 4.4 million. Compared to 2016, Cell C and Telkom have both seen a bit of growth – whereas MTN has lost some ground. Vodacom has maintained its dominance of the market, despite MTN being named the most valuable telecom brand in SA this year. The top two account for around three quarters of the 89 million SIM connections in South Africa. With the growth in Telkom and Cell C – as well as the rise of Mobile Virtual Network Operators such as FNB Connect, Lycamobile or Afrihost – the giants are beginning to face some aggressive competition.
Out-Of-Bundle Data Rates 2639% More Expensive
Data bundles, for reasons which make very little sense to the average consumer, work out way more affordable than using your airtime. But how much cheaper do data bundles actually work out? My Broadband recently revealed that Vodacom and MTN are completely out of their minds. The data rates on both of the top two service providers were reported to be astronomically higher when poor souls ran out of data bundles.
It was reported that, at the most extreme, out-of-bundle data rates could be 2639% more expensive.
While on contract, a 20GB data bundle with Vodacom costs R329. This works out to 2c per MB. Out-of-bundle rates, though, work out to 44c per MB. The same amount of data on prepaid costs R999.
Vodacom attempted to counter this by saying it is normal business practice to offer discounts to clients who make longer term commitments. A spokesperson for the company also said that voice and data prices have declined by more than 40% over the past three years.
"To encourage customers to remain in-bundle, Vodacom has introduced a variety of initiatives in recent times including auto allocate, safety bundles and smart notifications.”Correspondingly, MTN’s 25GB prepaid bundle costs R1250 – so 5c per MB. Out-of-bundle, it costs 99c per MB. That’s 1928% more.
MTN’s Jacqui O’Sullivan said that contract data offers include a fixed commitment. Once-off and recurring bundles are consumed when needed. So, customers are able to add and remove data at any time.
“This degree of flexibility comes at a price premium and this is why recurring data bundles are somewhat more expensive,” said O’Sullivan.Right. MTN, it may be noted, has announced changes.
MTN’s New Data Bundle Prices
In a move deemed “in line with customer needs and market trends”, MTN has announced adjustments to its prepaid data bundles. These new bundles, and their prices, are effective from 5 March 2018. Some bundle sizes have been removed, such as the entirely pointless 5MB monthly bundle. What are you supposed to do with that? Download an email attachment? New packages have also been introduced across the board, in both monthly and weekly bundles. The best news here is that prices on all monthly data bundles have decreased. Here are the changes:
We Know What You’re Up To, Big Network
Consumers have been waging war against network providers for some time now. It’s glaringly obvious that these companies are essentially ripping us off, while at the same time, forcing us to commit to them in the long-term. Long-term commitment is the only affordable option. It is also obvious that these operators want us to purchase data bundles. We get better rates and they gain insight into customer demands. According to both Vodacom and MTN, the purchasing of bundles allows them to forecast data demands, and plan and provision network capacity with greater accuracy. This makes sense, but the fact that we know we’re being herded around like cattle leaves a bitter taste in the mouth. Minister of Economic Development, Ebrahim Patel, has stated that the government will prioritise lowering the cost of data, as well as expanding the infrastructure. Regulator ICASA also insisted on extending the validity of data bundles. For once, we’re on their side.