Inflation? Not in SA telecoms

Added by Duncan McLeod on 18 July 2012.
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Statistics published on Wednesday show headline consumer price inflation slowed in June to 5,5%. But a detailed analysis of the data reveals that prices in some categories are soaring and in others, most notably telecommunications, they are falling.

Although Stats SA doesn’t provide a detailed breakdown of the telecoms and IT sectors in its monthly consumer price inflation (CPI) reports, it does provide analysis of CPI changes in “postal and telecoms services” and in “telecoms equipment”. In the former category, prices have fallen on average by 0,5% over the past 12 months; in the latter category prices have plummeted by 12,9% in the same period.

Postal and telecoms services make up a substantial 2,9% weighting in the CPI formula. Telecoms equipment contributes 0,32% to the weighting.

The June statistics show that the cost of telecoms equipment has fallen by more than half since 2008. In June this year, prices were just 41,7% of what they were four years ago.

Though postal and telecoms services haven’t fallen by nearly as much, prices remain depressed. Since 2008, average prices have increased by only 2,7%, far below CPI and have, in fact, declined in the past year.

Inflation in most other categories has been significantly higher than this. In “electricity and other fuels”, for example, prices have leapt by 17,1% in the past year. Prices for public transport, petrol and beer have all skyrocketed in the past 12 months.  — (c) 2012 NewsCentral Media

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