Vodacom has said that its superior network performance, extensive network coverage and strong distribution channel means that consumers can expect to pay a premium for its services.
Vodacom’s new chief consumer officer, Phil Patel explained that Vodacom is investing large amounts of money in its network which has to be recuperated with potentially higher rates than its competitors.
Patel added that most of Vodacom’s prices are in-line with its competitors, and that people who move to Cell C or 8ta may not necessarily save money. Here Patel was referring to special promotions from Vodacom to add value to specific user groups (like Vodacom’s prepaid Day-Night Double free airtime promotion).
Cell C recently slashed the price of its standard data rates to 15c per MB, undercutting Vodacom, MTN and 8ta’s standard data rates.
Cell C and 8ta are also running aggressively priced data promotions which offer better value for money than Vodacom.
Patel said that, despite the lower prices from Cell C and 8ta, they are not losing market share to these two companies.
Patel highlighted that, while pricing is important, it is not the only consideration. He said that issues like network quality and service availability are also important considerations to consumers.
Despite the fact that Vodacom is still showing strong growth in the data market, Patel said that they will continue to ensure that their pricing remain competitive, and may even go to 15c per MB like Cell C if they “have to”.
However, Patel said that there is currently no need for Vodacom to match Cell C’s 15c per MB to remain competitive.
R5 for 5MB Internet Daily
Vodacom’s 5MB of data for R5, and 20MB of data for R12 Internet Daily products drew sharp criticism from consumers, with accusations that Vodacom is trying to capitalize on an uneducated market.
Vodacom’s R5 for 5MB product offers 5MB of data for a maximum of one day (until 24:00 on the day of purchase), with an out of bundle rate of R2 per MB.
Cell C, in comparison, offers 50MB for R7.50, with an out of bundle rate of 15c per MB. Cell C’s bundled data life is also 30 days (instead of the 1 day maximum from Vodacom).
Patel said that Vodacom’s Internet Daily products should be seen as merely a start for the company, explaining that these products will evolve in time.
He added that they are looking at Internet Daily packages which will add more value to feature phone users.