Telkom announced on Wednesday that it has concluded a new roaming agreement with Vodacom that will allow its customers access to the latter’s 4G/LTE network with no restrictions.
This is significant, because Cell C’s recently concluded roaming agreement with MTN has one big limitation: its customers will only be able to use MTN’s network outside the cities where its coverage isn’t as well developed. Telkom customers, on the other hand, will be able to roam on Vodacom, even if they are in the middle of Sandton or Cape Town and have excellent Telkom coverage.
This has the potential to change the dynamics of South Africa’s mobile market, because it is likely to convince a significant number of consumers to switch to Telkom’s mobile offering. Why? Because Vodacom has a great network, but its data prices are eye-wateringly high.
There is simply no beating Telkom’s aggressively priced FreeMe plans. For example, it is currently running a promotion on its 20GB plan, which offers consumers 20GB of data a month, zero-rated music and video streaming, free calls to six million Telkom numbers, free Wi-Fi at Telkom hotspots, free SMSes and WhatsApp messages, free itemised billing and basically unlimited off-network calls (within reason) for 500 bucks a month. Even the regular price of R605/month is a winner. No other major operator offers anything like it (that I’m aware of).
The only “problem” is that Telkom doesn’t have the best network. Its network isn’t bad at all, but on average it’s slower than the networks of bigger rivals Vodacom and MTN. And its coverage is spotty. Where it doesn’t have good signal — or where it has no signal at all (outside the cities) — consumers have been able to roam onto MTN. But its agreement with MTN extended only to 2G and 3G technologies, not to the speedier 4G, and there was no “seamless roaming”, so calls dropped when moving out of a Telkom coverage area as it took time to switch across to MTN (a problem for people who travel a lot, especially on the periphery of the cities).
The Vodacom deal not only gives Telkom seamless roaming, but there are also no restrictions on where Telkom customers can use Vodacom’s network. Unlike the Cell C/MTN arrangement, a Telkom customer will be able to connect to Vodacom anytime they want from anywhere they want.
Roaming on Vodacom
The implication of this is that many consumers may choose to set their smartphones to roam on Vodacom’s network all the time, given that it offers superior speeds (on average). One assumes this isn’t the behaviour Telkom would like to see from its customers (presumably, a customer roaming on Vodacom’s 4G network will cost Telkom more than the same customer roaming on its own 4G network), so it will be interesting to see how it manages this once the switch away from MTN has happened.
But it could entice many more people to give Telkom a try.
I asked Vodacom spokesman Byron Kennedy about this, and he told me it’s up to Telkom to manage traffic flows “as it will be a cost for them to have customers roam on our network”. He added that there will be “measures in place to manage congestion to ensure optimal service for both Telkom and Vodacom customers”. He didn’t elaborate on what those measures might include.
With Cell C about to migrate its roaming to MTN, presumably there will be spare capacity on Vodacom available for Telkom to use, but one does wonder how much, especially given that Vodacom has often warned that it urgently needs access to new radio frequency bands to deal with growing demand for data on its network.
Perhaps it’s factoring in the fact that it is likely to get new spectrum in the first half of next year, with communications regulator Icasa finally expected to license the 700MHz, 800MHz and 2.6GHz bands. The 2.6GHz band should become available immediately after it is licensed (700MHz and 800MHz will only be available after South Africa has completed its long-delayed digital television migration project).
There’s no doubt that this is a significant development in South Africa’s telecommunications market, one that could have a big impact in a short space of time. Telkom will fill the gap on Vodacom left by Cell C’s decision to move to MTN, but the big winner here, I predict, will be Telkom, which is likely to see a big uptick in customer acquisitions. Its challenge may be keeping its customers on its own network, though, instead of having them switch their phones to roam on Vodacom. Consumers should benefit broadly, too: as Telkom becomes a more attractive option for consumers, the other operators may be pressured to reduce their data prices.
This article was originally published on TechCentral here.