Increased traffic to offset mobile price cuts

By Damaria Senne, ITWeb senior journalist

Johannesburg, 02 Sept 2005

Vodacom expects cellular traffic to increase to offset some of the recent price reductions, says group CEO Alan Knott-Craig, commenting on another price cut announced by the company yesterday.

In addition to the increased traffic, the rapid growth in the industry is expected to bring in more users, further increasing revenue and offsetting the cost of the price cuts.

According to Knott-Craig, the mobile industry is growing more rapidly than it ever has in its 11-year history, with Vodacom registering 1.3 million new customers in July alone.

Vodacom recently said it had 17.2 million subscribers overall and 14.3 million in SA. MTN reported 17.039 million subscribers overall and 8.407 million in SA.

Cell C recorded a 39% growth in subscribers year-on-year, with 252 000 prepaid subscribers and 68 000 post-paid subscribers connected in the past three months, boosting subscribers from 2.17 million to 2.5 million.

More tariff cuts

The mobile industry is growing more rapidly than it ever has in its 11-year history, with Vodacom registering 1.3 million new customers in July alone.
Alan Knott-Craig, group CEO, Vodacom

In the latest round of price cuts, yesterday Vodacom announced a tariff cut for prepaid calls made during peak times from 7am to 8pm. The new rate of R2.99 per minute, based on per second billing, is applicable to Vodacom-to-Vodacom calls, as well as calls to Telkom and other cellular networks.

According to Vodacom, the new rates represent a reduction of up to 17% and will impact 13 million of its subscribers. The Independent Communications Authority of SA approved the cuts on 1 September and the new tariffs are effective from 5 September.

Vodacom says prepaid customers who already pay less than R2.99 per minute will continue at their current rates. The company also announced an increase in the off-peak prepaid call rate of R1 per minute to R1.05 per minute, which will become effective on 1 October.

Other tariff adjustments that will take effect this year include the 1.5% increase in the Talk 500 package and a 2.2% increase in the Talk 1000 package. These increases will be effective from 1 October.