Telkom versus Neotel

By Candice Jones for Neotel
Johannesburg, 16 Jul 2008

Telkom recently filed its 2008 tariff adjustment with the Independent Communications Authority of SA, applying for an overall price increase of 2.4%.

The company cited SA's economic slowdown and high oil prices as the reasons for its need to increase its prices. If approved, the new tariffs will become effective from 1 August. However, operating in the same economic climate, second national operator Neotel opted not to apply for an increase in tariffs.

Telkom's price increase was not as dramatic as many expected, since Telkom could have filed for an overall increase of 17.2%. However, analysts commented that the biggest surprise was the increase in the broadband packages. "Telecommunications prices are meant to be going down. Throughout the world, DSL prices have dropped substantially," said BMI-TechKnowledge MD Denis Smit.

Actual package

In an earlier interview, Maneesh Mittal, head of Neotel's consumer products and services, said NeoConnect Prime 10G costs R599 per month including VAT. It provides consumers with 10GB of Internet access, 1 000 free minutes for on-network calls, 50 free on-net SMSes and an e-mail account. The offering is available to consumers in areas where Neotel has a footprint.

Telkom Closer packages provide consumers between 1GB and 3GB of data allocations, whereas NeoConnect Prime 10G gives consumers 10GB of data. Additionally, NeoConnect Prime 10G provides consumers with free SMSes, he said.

Both packages provide consumers with free minutes for on-net calls, he noted.

Bottom line comparison

With the coming changes in Telkom's tariffs and Neotel's additional consumer packages, ITWeb created a breakdown of the service offering charges expected from the companies.

One of the biggest differences between Telkom and Neotel's rates is that Neotel charges per second billing on all calls, while Telkom has a minimum charge.

The table illustrates a consumer price comparison between Telkom and Neotel, including VAT. The prices listed for Neotel represent those listed for its consumer offering, NeoConnect. Telkom's charges are those for postpaid offerings only - not prepaid charges.

Even though Neotel charges per second, the prices listed are all in rands per minute.

To see the table in this article please click here.

For a full roundup of Telkom's tariffs, click here.