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Cape Town - Telkom [JSE:TKG] has announced on Friday that it will raise the cost of its line rentals for a straight 13th year in a row.
The real price increase is above the inflation rate, despite Telkom claiming the opposite, warned Arthur Goldstuck, founder of World Wide Worx and editor-in-chief of Gadget.co.za.
The real impact of the increase may, in his opinion, therefore be that the cost for the average customer will rise by above the inflation rate.
Telkom is to hike its basic voice and data connectivity services by an overall 1.3%. However, it will increase the cost of line rentals, its most heavily used services, for consumers by 5.8% to R157 per month and for businesses by 6.2% to R216.00 (incl. VAT) per month.
The fixed line customer base of Telkom has, ironically, also fallen for the 13th year in a row.
Telkom usually claims that it costs more to maintain the fixed line infrastructure than it generates in revenues.
"What we need to do is manage revenue migration to mobile," said Telkom’s chief operating officer, Dr Brian Armstrong.
"While we think there is a small amount of price elasticity, it's too slow to justify a price-based strategy to recover subscription volumes."
He acknowledged, however, that price should ultimately be driven by market forces.
Manelisa Mavuso, Telkom's managing director: consumer services and retail, said that low or no increases across a basket of services showed Telkom had customers’ interests at heart.
DSL and Telkom Internet monthly subscription charges, for example, would remain unchanged.
Other tariff announcements included a drop of 3.1% to R1.30 (incl. VAT) per minute in the tariffs for outgoing fixed to mobile calls during peak time and a decrease of 2.7% to R1.05 (incl. VAT) per minute during off-peak time.
There will be a significant drop for current long distance calls due the combining of on-net local and long distance call tariffs for postpaid and WorldCall into a single tariff of R0.46 (incl. VAT) per minute during standard time and R0.23 (incl. VAT) per minute during Callmore time.
The minimum charge will be R0.63 (incl. VAT).
PrepaidFone on-net local and long distance call tariffs will be combined into one and charged at R0.70 (incl. VAT) per minute during standard time and R0.33 (incl. VAT) per minute during Callmore time.
The minimum charge will be R0.96 (incl. VAT) and the surcharge for PrepaidFone and Top-up increases from R0.66 to R0.70 per call.
Installation charges will increase by 6%. Line rental for PrepaidFone also increases by 6%.
Postpaid analogue residential line rentals will increase by 5.8% to R157.00 (incl. VAT) per month and business line rentals will increase by 6.2% to R216.00 (incl. VAT) per month.
The monthly subscription for the Telkom Weekender Plan (previously Closer 1) increases to R176.00, Telkom Evening and Weekend Plan (previously Closer 2) increases to R194.00 and Telkom Unlimited Anytime Plan (previously Closer 3) increases to R350.00.
- Fin24
The real price increase is above the inflation rate, despite Telkom claiming the opposite, warned Arthur Goldstuck, founder of World Wide Worx and editor-in-chief of Gadget.co.za.
The real impact of the increase may, in his opinion, therefore be that the cost for the average customer will rise by above the inflation rate.
Telkom is to hike its basic voice and data connectivity services by an overall 1.3%. However, it will increase the cost of line rentals, its most heavily used services, for consumers by 5.8% to R157 per month and for businesses by 6.2% to R216.00 (incl. VAT) per month.
The fixed line customer base of Telkom has, ironically, also fallen for the 13th year in a row.
Telkom usually claims that it costs more to maintain the fixed line infrastructure than it generates in revenues.
"What we need to do is manage revenue migration to mobile," said Telkom’s chief operating officer, Dr Brian Armstrong.
"While we think there is a small amount of price elasticity, it's too slow to justify a price-based strategy to recover subscription volumes."
He acknowledged, however, that price should ultimately be driven by market forces.
Manelisa Mavuso, Telkom's managing director: consumer services and retail, said that low or no increases across a basket of services showed Telkom had customers’ interests at heart.
DSL and Telkom Internet monthly subscription charges, for example, would remain unchanged.
Other tariff announcements included a drop of 3.1% to R1.30 (incl. VAT) per minute in the tariffs for outgoing fixed to mobile calls during peak time and a decrease of 2.7% to R1.05 (incl. VAT) per minute during off-peak time.
There will be a significant drop for current long distance calls due the combining of on-net local and long distance call tariffs for postpaid and WorldCall into a single tariff of R0.46 (incl. VAT) per minute during standard time and R0.23 (incl. VAT) per minute during Callmore time.
The minimum charge will be R0.63 (incl. VAT).
PrepaidFone on-net local and long distance call tariffs will be combined into one and charged at R0.70 (incl. VAT) per minute during standard time and R0.33 (incl. VAT) per minute during Callmore time.
The minimum charge will be R0.96 (incl. VAT) and the surcharge for PrepaidFone and Top-up increases from R0.66 to R0.70 per call.
Installation charges will increase by 6%. Line rental for PrepaidFone also increases by 6%.
Postpaid analogue residential line rentals will increase by 5.8% to R157.00 (incl. VAT) per month and business line rentals will increase by 6.2% to R216.00 (incl. VAT) per month.
The monthly subscription for the Telkom Weekender Plan (previously Closer 1) increases to R176.00, Telkom Evening and Weekend Plan (previously Closer 2) increases to R194.00 and Telkom Unlimited Anytime Plan (previously Closer 3) increases to R350.00.
- Fin24
