Neotel, Cell C will not up prices

Johannesburg, 25 Jun 2008
Read time 2min 00sec

Neotel has no plans to raise its tariffs in the short-term, says Stefano Mattielo, the second national operator's head of enterprise business group and the Network Operations Centre.

Mattiello's statement follows an announcement by fixed-line operator Telkom, last week, that it has applied to the Independent Communications Authority of SA (ICASA) to raise its tariffs by 2.4% overall.

If approved by ICASA, the new tariffs will become effective from 1 August.

Mattiello says Neotel does not see any particular reason to raise prices at this stage, as the economy has not affected the company that badly.

Neotel will watch economic developments and review its decision if the need arises, he says.

Frost & Sullivan ICT industry analyst Lindsey Mc Donald previously noted that, while Telkom's price increase may be warranted, the true test would be in Neotel's response.

"The two companies are working in the same economic environment, and if Neotel doesn't raise prices, we will have to rethink Telkom's increases," she said.

Mc Donald said consumers are already under pressure in terms of the cost of telecoms and the decision will put even more pressure on them.

Shenanda Janse Van Rensburg, Cell C's executive head of corporate communications, says the mobile operator also has no plans to raise its prices.

"We do not envisage increasing our tariffs in the short term. However, we continuously review this position based on market and economic fluctuation and environmental changes," she says.

Forced to follow

Virgin Mobile SA CEO Peter Bruce also notes Virgin Mobile will not proactively raise its prices.

However, it may be forced to do so if Vodacom, MTN and Cell C raise their prices. Virgin Mobile SA is a follower, not a trendsetter in the local mobile market, he says.

Bruce notes that, internationally, voice tariffs are going down, despite the current economic situation.

In addition, local telecoms prices do not yet fit in with international trends. SA does not yet have a flat tariff rate, he points out.

MTN and Vodacom were unable to respond by the time of publication.

Related stories:
Bandwidth costs must come down
Telkom profits under pressure

See also