Policy Brief 3, 2016
Pent up demand for internet service has driven strong growth in data revenues for operators throughout Africa. Traditional voice and SMS revenues have, in turn, been shrinking but have yet to lose their significance. Operators are launching promotional and personalised data products as a means of adapting and gaining revenue. With Over-the-Top (OTT) services increasingly acting as substitutes for the traditional voice and SMS services, operators are opting not to resort to raising prepaid prices on their cheapest tariffs as a means of making up lost revenues. Regulatory interventions such as cost-based termination rates have created consumer expectations of continued price reductions. Although some operators called for regulation of OTTs in the South African mobile market at Parliamentary hearings held earlier this year, their innovative new pricing strategies suggest responsiveness to this fast-changing environment. South African operators, in line with operators in other markets, have responded to these disruptions by introducing new products such as bundled data, voice and SMS, or service-specific promotions. Are these new products easier on the pockets of consumers and are they transparent enough for consumers?
1. Vodacom, MTN and Cell C are competing more and more on customised products for subscribers instead of strict service pricing.
2. Telkom fails to exert pressure on other operators in spite of undercutting competitors’ voice tariffs and monthly data prices.
3. Cell C’s strategy to champion best-value products, cheapest voice and SMS products, and subsidising an exclusive zero-rating strategy with a global social networking platform makes it the leader of the prepaid pack.
Chair, C. (2016). Top operators for personalised prepaid products (Policy Brief No. 3). Research ICT Africa. https://researchictafrica.net/polbrf/Research_ICT_Africa_Policy_Briefs/2016%20Policy%20Brief%203_Top%20operators%20for%20personalised%20pre-paid%20products_South%20Africa.pdf