Residents of South Africa are facing price hikes from large government entities. Eskom, the state-owned power company, is set to increase tariffs again on April 1, 2025. Similarly, Telkom, the majority government-owned telecom operator, will also raise tariffs for its mobile subscribers starting April 1, 2025.
Telkom will be increasing tariffs for its telephone and mobile internet services by 12% for both businesses and consumers. Additionally, there will be a 6% tariff hike for fibre services and voice plans. The company attributes this decision to increasing operational costs and external economic pressures. Despite a slight uptick in inflation, which remains within the Central Bank’s expectations, the price hikes will impact Telkom’s 24 million subscribers.
These tariff increases, combined with rising electricity costs, will put more financial strain on Telkom’s subscribers. Telkom has a history of raising prices in response to economic conditions, and other competitors in the telecom industry may also consider adjusting their prices. This move could potentially attract customers looking for stable pricing amidst economic uncertainties.
For consumers, the new prices mean higher bills. For instance, a 50Mbps fibre plan currently costing R629 ($35) will increase to R665 ($37), while a 100Mbps package will rise from R909 ($50) to R965 ($53). These hikes will impact both businesses and households already grappling with escalating costs.
While Eskom’s price hikes have led some South Africans to explore solar energy alternatives, there are limited options available to replace Telkom’s services. Nonetheless, competitors in the market may view this as an opportunity to appeal to cost-conscious customers by maintaining competitive pricing.
Internet service providers like Afrihost, Herotel, and MWEB, known for their affordability, could potentially challenge Telkom’s dominance in the market. The changing landscape may prompt these providers to offer competitive pricing to attract customers seeking cost-effective solutions.