No new pre­paid tar­iff at Vo­da­com

Prices to re­main steady

Sunday World - - Business - XO­LILE MT­S­HAZO

VO­DA­COM has not launched a 55c new tar­iff, as was widely be­lieved, af­ter the an­nounce­ment of its ac­qui­si­tion of fixed­line com­mu­ni­ca­tions com­pany Neo­tel this week.

Our aver­age ef­fec­tive price per minute for pre­paid in South Africa over the past year was 55c, and it will re­main so. That num­ber is ar­rived at by di­vid­ing voice rev­enue by the num­ber of min­utes car­ried,” Vo­da­com spokesman Richard Boor­man said.

When asked why Vo­da­com viewed the Neo­tel ac­qui­si­tion deal as an al­ter­na­tive to Telkom, if the com­pa­nies would, from now on, com­pete as equals with a big­ger and more cost-ef­fec­tive foot­print, Boor­man said there were two seg­ments to con­sider: the busi­ness ser­vices (re­ferred to as en­ter­prise ser­vices) and the con­sumer busi­ness.

By over­lay­ing Neo­tel’s fi­bre net­work with our own this is the fi­bre-op­tic net­work that con­nects our base sta­tions we in­crease our foot­print and phys­i­cally get closer to more homes and businesses.

This makes it much eas­ier to sup­ply fi­bre to the busi­ness and, ul­ti­mately, to the home ser­vices.

R/ bil­lion tund­ing

In the en­ter­prise seg­ment, by com­bin­ing Neo­tel’s fixed prod­ucts and skills with our own strengths in mo­bile, we can of­fer a wider range of ser­vices.”

Boor­man said the R7-bil­lion fund­ing for the Neo­tel ac­qui­si­tion trans­ac­tion came from ex­ist­ing fa­cil­i­ties.

Vo­da­com had a very low level of debt, so the fund­ing isn’t an is­sue”.

He said the ac­qui­si­tion would not af­fect Neo­tel cus­tomers and there would be no changes un­til Vo­da­com got the req­ui­site reg­u­la­tory ap­provals.

Boor­man as­sured sub­scribers that the tele­coms mar­ket was not be­com­ing more con­sol­i­dated as a re­sult of the ac­qui­si­tion, be­cause Vo­da­com was a mo­bile player and Neo­tel was pri­mar­ily a fixed player”.

The deal is bound to put Vo­da­com in a bet­ter po­si­tion to in­vest in Neo­tel’s fixed busi­ness to help make it more com­pet­i­tive, thus break­ing the mo­nop­oly held by Telkom over the fixed-line tele­coms mar­ket.

He said the no­tion that the pop­u­lar­ity of fixed-line com­mu­ni­ca­tions was wan­ing was not true as fixed-line data was alive and well in the rest of the world.

That was one of the key op­por­tu­ni­ties that stemmed from the ac­qui­si­tion trans­ac­tion.

Vo­da­com said SMMEs were look­ing for con­verged so­lu­tions, which the com­pany would now be able to pro­vide.

Boor­man said the new deal would re­duce re­liance on mo­bile voice rev­enue.

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