Several South African telecom companies received a bit of a shock in the last quarter, despite the fact that these firms had just raised prices for services on their customers, some in mid-contract. The companies have reported, according to BDLive that despite raising the cost of cellular services, they still saw a healthy bottom line when it came to revenues. While the companies promised that the price increases were something that couldn’t be helped, most felt as though the increases would hurt their revenues in the short run.
The reason for the price increases ranged from a rise in technology prices to load-shedding. The companies also pointed to the cost of rolling out new services such as LTE (News - Alert) and things that go along with that higher speed network such as VoLTE. The problem, also as BDLive points out, is that some of the reasons for the price in services are valid, but the bottom line is that customers are still getting the short end of the stick when all is said and done.
The biggest clue that these South African companies are simply using new technology as an excuse to drive up prices, when they don’t really need to, comes in the form of the mass adoption of VoLTE. The technology is basically the same as VoIP, only on the newer and quicker LTE network. While “new” can sometimes translate to “more expensive right now,” the fact of the matter is that VoLTE technology uses more cost-effective technology that networks and carriers have already invested in. This investment is something that should be written off as the cost of doing business. That cost isn’t one that should be getting passed onto the consumer just because a company knows it can get away with it.
More and more companies, especially at the enterprise level, are using VoLTE all the time. This is becoming the new “everyday” network. South African companies are rightly coming under a bit of fire for pretending this is a tech that is special and especially expensive. Continuing to do business this way could hurt the companies in the long run.
Edited by Rory J. Thompson