Vodacom's high Samsung S6 prices questioned

Johannesburg - Smartphone pricing in South Africa is coming under the spotlight as telecom providers are selling the latest Samsung S6 range at starkly different price points.

Mobile network Vodacom [JSE:VOD] on Tuesday revealed its pricing for the Samsung S6, expected to launch in the country on April 10.

The standard Samsung Galaxy S6 LTE 32GB is set to cost R12 399 in South Africa from Vodacom. On contracts such as the Vodacom Smart S plan, it means this S6 will cost R529 per month.

Meanwhile, the Samsung S6 Edge LTE 64GB, which has an edged screen feature, is also planned to be available from April 10 from Vodacom, but it will be priced higher at R16 149.

However, a Samsung Galaxy S6 32GB Black Sapphire phone on the South African Orange Store is being sold for R8 875. And the S6 Edge 32GB device is also retailing for R10 625 on the Orange Store.

“I can’t comment on another company’s pricing, but I can confirm that our prices are for Samsung-approved imports and include local after sales support, a two-year warranty, a free wireless charger and cover (worth R1 100), and one screen replacement free of charge,” Vodacom spokesperson Richard Boorman told Fin24.

“We have also included 3GB of additional data over three months on all our S6 and S6 Edge contracts,” said Boorman.

Blake Levitan, country manager for Orange Horizons South Africa, told Fin24 that his company imports Samsung phones from Europe.

This means Orange Horizons taps into its parent company’s buying power in Europe, where it has large mobile network operations in countries such as France.

In the case of South Africa, Levitan said Orange is also looking to compete aggressively on phone prices.

"Our products, of course, are referred to as grey imports or parallel imports and we do openly admit that,” Levitan told Fin24.

This means buyers of Samsung devices on the Orange store can’t benefit from the likes of ADH cover, a value-add to fix broken phone screens for free.

"Of course, in the case of a Samsung product we also go on to state that it doesn't benefit from the ADH cover and sometimes some of the other value-adds that you see on the Samsung products, like the AlwaysOn Wi-Fi, etc,” Levitan added.

Levitan told Fin24 that all Samsung phones Orange sells in South Africa are parallel imports. But he said Orange is looking to introduce official imports from distributors where and when it can.

"There is a small percentage of our catalogue that is sourced from the local distributors and we continue to try and increase the range of products that are sourced locally,” Levitan told Fin24.

Phone buyers express their views

A snap poll by Fin24 revealed that most phone users would want to buy the next Samsung S6 but that its price point of between R12 000 to R16 000 from Vodacom could be too high.

“I would say a max of R10 000 for a quality high-end smartphone. And then it will have to show some real firepower and abilities to warrant that price. No more than that,” said Fin24 user Zane.

After Vodacom’s announcement that it is increasing contract prices, another Fin24 user also said he would be wary of upgrading too soon.

Vodacom announced last month that it plans to hike contract prices by May 1.

“I was seriously considering upgrading to the Samsung S6, I am due an upgrade. It was a feasible way for me to get top of the range phones I like. However, after Vodacom's unilateral price increase which included existing contracts, I have decided against it,” Bryan Musso told Fin24 in an email.

“I will eventually get a Samsung S6 or the future Note or performance equivalent Android phone. However, now I am more wary of contracts and will thus look at a cash option, so will most likely wait for prices to come down,” Musso said.

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