IT News Africa reporter Savious Kwinika recently fielded questions to South Africa’s newest mobile network 8.ta about mobile and data tariffs, competition between mobile networks and the ramifications of the arrival of both WACS and EASSy to the company’s Managing Executive Amith Maharaj.
Kwinika wanted to find out whether the sudden fall in data and voice pricing were as a result of the arrival of the WACS and EASSY cables, and what other contributing factors were behind the decline.
SK: Mobile and Internet data tariffs have drastically gone down as opposed to voice charges. What do you attribute this to?
AM: Multiple factors have impacted on the price of data and these include:
* Decrease of international bandwidth pricing (majority of sites are hosted outside of South Africa)
* Better understanding of data utilisation patterns resulting in better network planning and models for recovering of investments for data infrastructure.
* Modernisation of data network infrastructure.
* Increased competition is another factor.
Voice prices have also decreased. Perhaps this is not clearly visible as many customers are not aware of the rates. If one looks at the effective rates, i.e. a combination of tariffs, included benefits, bonus benefits such free minutes offered on 8ta prepaid, one free landline number on contract etc, it would be found that there are significant savings a customer can achieve.
SK: How has the competition over data price reduction been of late among telecommunications and mobile telephony companies?
AM: We launched the offer at a stage where our network was sufficiently rolled out to ensure a good subscriber experience and not as a reaction to the mobile industry’s price war.
SK: Are these current low data prices sustainable for mobile and telecoms companies?
AM: 8.ta believes in offering competitive and affordable prices. The current data package from 8ta is a promotional offering and forms part of 8ta’s plans to offer an attractive promotion as a component of 8ta’s marketing activities.
SK: Do you think the arrival of both WACS and EASSy contributed to the low prices of data and voice calls? If so, how?
AM: To some extent this has had an impact on prices; however there is the cost of carrying the traffic on the national network. Competition is always healthy and has had an effect on the market. The issue around alternatives is not always a price issue but also a reliability issue. Telkom’s value proposition is one of price and quality of experience.