We know that it is difficult for the general public to put themselves in the shoes of a large company or of several large companies that lead a specific sector. However, the situation in the telecommunications market is critical and the large operators are having to make unpopular decisions for sheer survival. If we want them to continue deploying fiber, 5G or supporting the traffic of third-party platforms (Netflix, WhatsApp, etc.), either we change the market model or we will have to get used to price increases and other movements of this type .
Without going any further, Orange announced the other day that it was going to ERE over 485 employees. The operator clearly explained that “The telecommunications sector has been chaining revenue losses for years as a result of the hyper-competitiveness of the market and the multiplicity of low cost players”. This can be perfectly applied to other operators such as Vodafone and perfectly explains decisions like the ones we are dealing with in this article.
65% increase in traffic and growing investments
In the next few days, Vodafone will send a statement to its customers explaining the reasons why it will raise prices. It is important to understand the situation to better understand making this decision. The operator will begin by explaining that her objective has always been to offer the best network quality with the highest coverage and best speed. That translates directly into money needed to invest in infrastructure. With fiber at sky-high levels, now it’s time to tackle another big investment to roll out 5G across the country. To this we add the upcoming 700 MHz auction that does not promise to be cheap.
In addition to the investments, Vodafone acknowledges that it has experienced a 65% increase in traffic on a sustained basis since the outbreak of the pandemic. Teleworking, education and leisure from homes has caused this flood of traffic that needs adjustments and controls on the networks so that they are always working “as if nothing else”. To give us an idea, Vodafone invested 200 million only last year to guarantee the connection of its private clients and companies.
For all the above, the red operator has no choice but to make a small price adjustment for some of its rates. Although at the moment we have not been able to confirm exactly the pricing plans that will be affected, we do know that the update will mean an increase in between 1.5 euros and 3 euros more per month. It is important to note that it will NOT imply the cancellation of discounts applied and that it will come into effect on July 15.