Interesting news from Africa via SubexAzure. It says here: http://www.cellular-news.com/story/19951.php that African telcos are losing US$25bn every year, or a quarter their revenues.
Stop and think about that for a moment. Imagine that those telcos cut their loss to 0% for next year. So they would be US$25bn richer next year, right? No. Of course not. Communications is very price elastic – if you charge more then people use it less. The poorer the person, the more price elastic they act. The idea that African customers have a spare US$25bn p.a. they will gladly pay over to telcos is nonsense. Even if all telcos got better at recovering revenues, the likeliest impact is that they would (a) have to reduce prices or (b) get reduced business to offset their improved recovery. After all, many of the customers who make most use of telco services – fraudsters and bad debtors – have no intention of paying anyway.
