South Africa’s third cellular network operator Virgin Mobile says low data tariffs and voice calls charges were not sustainable and warned charges would rise.
Responding to questions, Virgin Mobile Chief Strategist and Marketing Officer, Jonathan Newman, said that the current low voice call and data tariffs were a result of promotional competition among mobile companies, arguing that prices would go up soon.
“South Africa has just built an HSPA+ network and has run promotional pricing on dongle data bundles to ramp up volumes. This started a promotion-price war of sorts — now all the network operators are offering unsustainably low prices on dongle data bundles,” Newman said.
He said such low promotional tariffs on both data and voice were not sustainable for sound business. “We expect dongle data bundle pricing to rise again in the short term,” said Newman.
Virgin Mobile believes that the low tariffs were partially a result of the arrival of both WACS and EASSy “to some extent, but not to the artificially low level prices are currently at”.
Until national backbone operators such as Telkom have reduced back haul prices, sustainable low prices cannot be achieved,” said Newman.
South Africa has six mobile network operators comprising MTN, Vodacom, Cell C, Nashua Mobile, 8.ta and Virgin Mobile. Apart from the six mobile operating companies the country boasts two telecommunications companies in Neotel and Telkom.