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Vodacom to slash data prices by at least 30%, clients to get free access to some websites

Mar 10 2020 11:47
Londiwe Buthelezi

All Vodacom customers are set to pay at least 30% less for their data bundles, as the mobile operator has agreed to slash its prices and provide free internet access to the poor, as demanded by the Competition Commission in December.

READ | Competition Commission wants Vodacom, MTN to reduce data prices

The mobile operator’s CEO Shameel Joosub said the company will sacrifice R2.7 billion a year as part of the agreement. From 1 April, a one gigabyte of Vodacom data will cost no more than R99, compared to the current R149, translating to a 34% price decrease.

The company will further decrease its bundle prices in April next year, which will mean more than a 40% price reduction, said the minister of trade and industry, Ebrahim Patel.

Tembinkosi Bonakele, Commissioner of the SA Competition Commission, said talks were underway with all the other mobile operators, and that negotiations were in at "quite advanced" stages with some. Bonakele expects to conclude new price deals with other operators "sooner [rather] than later". 

Free access to sites 

Vodacom will also, from next month, zero-rate a number of websites. This means that its subscribers won't have to use their internet bundles to access university portals, Wikipedia, and certain government e-service portals and departmental websites, like those of the department of home affairs and school enrolment platforms.

Job seekers will also have free access to seven approved job portals.

Vodacom's Facebook Flex, which allows subscribers to access a "data light" version of the social platform on their phones for free, will also be extended to all subscribers.

About 2 000 suburbs and villages living below the poverty line will get personalised discounts, over and above the zero-rating and discounts given to all customers. The commission did not disclose the value of these pro-poor discounts to protect "competitive elements" of the deal.

Bonakele said customers buying low-value bundles would benefit the most from these discounts.

"Shameel [Joosub] has been a very tough and robust negotiator, but has handled these negotiations with the necessary compassion for his clients," said Bonakele.

Joosub said the mobile operator chose to "constructively engage" with the commission instead of fighting it following the release of its final report into data pricing in December.

The Competition Commission's demands

The report slammed Vodacom and MTN for using their market dominance to maintain "price discrimination strategies" in South Africa, and contended the two operators did not do the same in other African markets where they operate.

The Commission said lower income consumers who purchased smaller data bundles were the biggest losers under these price discrimination strategies because they paid "inexplicably higher costs" per megabyte compared to high-income earners, who could afford to buy much larger data bundles at once.

The Commission asked Vodacom and MTN to independently come to an agreement with the competition body within a month or two after publishing the report.

At the time, the commission said evidence suggested that there was scope for these mobile operators to reduce their data prices by between 30% to 50%. 

The commission also wanted all mobile operators to offer all prepaid subscribers a "lifeline package of daily free data". The free data would be given to all citizens on a continual basis, regardless of their income levels.

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