Expect data price cuts of 20% per year: Vodacom

Vodacom CEO, Pieter Uys insists that data will play an important role in the company’s future, and that lower data prices will not have a negative effect on the company’s performance.

On Monday (21 May), Vodacom released its results for the year ended 31 March 2012 recently, revealing a data revenue increase of 23.6% to R7.639 million. This growth was supported by a 35.4% increase in active data customers to 12.2 million.

While data volumes are rapidly increasing, data prices are decreasing.

Competitive pressures in the data market resulted in a 18.2% reduction in the effective price per megabyte.

Despite the declining data prices, Uys remains upbeat about the potential of data to be a strong revenue-driver for Vodacom for years to come.

Uys explained that the group’s faster network and lower prices mean that subscribers use more data, making up for the lost revenue because of price declines. Uys added that they are prepared for future price cuts in the data market.

“We have factored in price competition on both voice and data for our business plans going forward,” said Uys. “On the data side we have factored in a decrease of around 20% per year for the next few years.”

However, Uys downplayed the recent price cuts by Cell C, steering away from the term ‘price war’. “Competition is good for us – it keeps us on our toes,” the company head concluded.

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Expect data price cuts of 20% per year: Vodacom