Zero rating

Dr. Alison Gillwald and Ariel Futter from Research ICT Africa provide a useful overview of the status of the zero rating debate and reduces the level of hysteria on the topic. You can read more here: http://www.researchictafrica.net/docs/Facebook%20zerorating%20Final_Web.pdf

Are recent post-paid price increases by SA operators justifiable?

• CellC provides the best value on their mobile contract offerings (postpaid) followed by Telkom Mobile.
• Disgruntled contract subscribers may move to prepaid where some excellent high-value products are now offered or simply buy data bundles to use Over-the-Top services such as Skype and WhatsApp for voice and text services.
• The claim by operators that increased input costs that necessitate price increases is not reflected in current annual financial statements. Revenue has increased faster than operating expenditure for Vodacom while both revenue and OPEX are in decline for MTN.
• Capital expenditure (CAPEX) per subscriber has been in decline for several years. The test will be whether the big three will use the extra revenue from price hikes to reverse this trend.

Mobile Money: What’s next?

One of the most exciting functions of mobile phones in recent years has been Mobile Money. In this presentation, Christoph Stork investigates the obstacles to serving the poor more profitably.  The conclusion of the presentation is that:

• Banks need to get back to basics and focus on making money through financial intermediation rather than through transaction fees
• Convergence of two such heavily regulated industries means that challenges are unlikely to be met unless policy-makers lay the ground rules for innovation
• Policy-makers and regulators need to safeguard that evolving systems serve the broader objectives of economic growth and development as well as protect consumer interests, while creating an environment that encourages and rewards innovation

Do consumers benefit from lower mobile termination rates?

Mobile termination rates no longer pose an obstacle to competition. Cell C and Telkom Mobile have continued to place pressure on MTN and Vodacom to reduce their prices, even at the new higher rate of 20c.

While mobile prepaid voice prices in South Africa have come down significantly in the last year, from 99c to 66c per minute. The 50c promotion may just have been an attempt by MTN and Cell C to test the price elasticity of its subscribers. Vodacom, the dominant operator, is currently the most expensive operator and Telkom Mobile the cheapest for mobile prepaid voice.

South Africa is in 14th position on the RIA Mobile Pricing Index in terms of the dominant operator and 9th in terms of the cheapest product. This is a major improvement on their rankings in the 30s in previous years, but they still are not leading on the continent as South Africans have come to expect.

Regulation of wholesale mobile prices has brought down retail prices. The question that remains is what can be done in the broadband wholesale market to bring down the cost of data so that the internet becomes accessible to more people.

Operators are already adjusting their business plans to deal with the changing broadband landscape, regulators will need to keep up.