Business Insider Edition

Vodacom says its data was suddenly a lot cheaper in the last three months – and it is thrilled about that

Phillip de Wet , Business Insider SA
 Jul 24, 2018, 09:07 AM
  • Vodacom recorded an overall price reduction of 17.1% per megabyte in April, May, and June, as it sold an enormous number of lower-cost personalised data bundles.
  • It now says new data roll-over rules from Icasa – which Cell C and MTN are fighting in court – won't have that big an impact on its profits after all.
  • It turns out more people buy more data when it is cheaper, and there is a huge pool of potential data customers waiting. 

Its average price for a megabyte of data declined 17.1% in the months of April, May, and June, Vodacom reported in quarterly results Tuesday morning – and it is very happy with that steep decline.

The drop was largely because of its push to sell more personalised data bundles on its "Just 4 You" platform, the company said, and it continues to push such bundles aggressively.

"Just 4 You" uses big data and machine learning to offer customers bundles tailored around their behaviour.

As its data became cheaper, its customers bought 32.2% more data bundles, Vodacom said, which ultimately saw its data revenues increase by nearly 10%, the big drop in price notwithstanding.

Vodacom reported much the same effect in its last full year of earnings: lower bundle prices, more bundles sold, and higher revenue.

And it expects that trend to continue, despite the new data roll-over rules from the Independent Communications Authority of SA (Icasa) that its peers are still fighting in court.

Icasa's End-User and Subscriber Service Charter Regulations on out-of-bundle data usage should have "a modest impact on data revenue growth" Vodacom said.

"We expect this to be mitigated in the short term by continued uptake of data bundles and strong elasticity in demand for these services."

By Vodacom's latest count it has some 43 million customers in South Africa, but only a little under 20.5 million of those use any data of any kind. Its numbers are roughly the same elsewhere in Africa as a whole: half its active customers do not yet pay for data.

The Icasa regulations require cellphone companies to allow customers to roll over unused data before it expires, or to transfer it to someone else. The rules also forbid companies from automatically defaulting customers to out-of-bundle data use (typically hugely more expensive than in-bundle data) once a bundle is depleted.

The implementation of the rules were suspended after Cell C, with support from MTN, went to court to challenge them. 

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