No new prepaid tariff at Vodacom
Prices to remain steady
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.