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What can be the justifications for the latest increase in prices for Digicel services in Haiti?

  • May 16, 2024
  • 6
  • 10
what-can-be-the-justifications-for-the-latest-increase-in-prices-for-digicel-services-in-haiti?

Digicel recently changed its prices in Haiti. For example, a plan of 100 gourdes for 24 hours with unlimited Internet is transformed into a plan of 120 gourdes for 24 hours with only 6 Gigabits.

Customers are complaining, severely criticizing the company now owned by investors based in the United States and demanding explanations.

To date, no official press release has responded to customers’ questions. But some customer service operators contacted on the issue attribute this latest increase in prices, camouflaged by changes made to certain company plans, to a need to make new investments in order to satisfy customers.

Some observers note that these changes come after the remarks of the Director General of Natcom explaining that the problem of the company founded by Denis O’Brien is the lack of control of costs and the profitability of cash flow.

However, the reasons that could justify an increase of more than 20% on the prices of certain Digicel services can be diverse. We bring 10 of them to your attention:

Rising infrastructure costs : With evolving technologies, telecom operators must constantly modernize and expand their infrastructures to meet the growing demand for data and services. This includes installing new antennas, upgrading fiber optic cables, acquiring additional spectrum for wireless networks, and more. These investments require significant financial resources, which may lead to tariff increases to offset costs. Technological innovation : Operators must continually invest in the research and development of new technologies to remain competitive and meet consumer expectations. This may include the deployment of 5G, the development of the Internet of Things (IoT), the improvement of cloud computing services, etc. These initiatives often require considerable investment, which can be reflected in service prices. Regulatory pressures : Operators are subject to government regulations and compliance standards that may change over time. This may include requirements for data security, privacy protection, frequency management, etc. Compliance with these regulations may result in additional costs, which may be passed on to consumers in the form of increased rates. Investment returns : Operators must provide a return on investment to their shareholders to maintain their attractiveness in the market. Raising tariffs can be a strategy to increase profits and satisfy investors, especially as operating costs continue to rise. Improvement in the quality of services : Operators can increase their prices to invest in improved quality of service, such as faster response times, better network coverage, more reliable connectivity, etc. These improvements often require significant investments in infrastructure and technology. Inflation : Like any business, telecom operators are affected by inflation, which leads to increased costs for labor, equipment, maintenance, etc. To maintain profitability, operators can adjust their rates to reflect the impact of inflation on their operating costs. Concurrence : In a competitive market, competitors’ price movements can influence operators’ decisions. If a competitor successfully raises its prices, other operators may have an incentive to follow to avoid losing market share or to maintain their relative price positioning. Increased demand : An increase in demand for telecom services may put additional pressure on existing networks and require investment to increase capacity and reliability. Operators can adjust their prices based on increasing demand to balance supply and demand. Grants for new services : When launching new services or products, such as combo plans or bundles, operators can offer upfront subsidies to attract customers. To offset these initial costs, prices for existing services may be increased. Unforeseen events : Unforeseen events such as natural disasters, cyberattacks or economic crises can have a financial impact on telecom operators. To absorb these unforeseen costs and maintain their financial stability, operators may be required to increase their prices for a given period of time.