MTN makes 79c rate cut permanent
The aggressive move is bad news for Cell C and could kickstart a new price war in South Africa’s mobile industry.
MTN has moved to make permanent its 79c/minute prepaid call tariff, greasing the wheels toward a possible price war in South Africa’s mobile industry and piling the pressure on debt-laden rival Cell C.
“MTN South Africa has lodged the required paperwork with [communications regulator] Icasa to permanise (sic) its highly-publicised 79c all-net rate on its PayAsYouGo pay-per-second price plan,” the mobile operator said in a statement on Thursday evening.
“Our customers require certainty that MTN will maintain the most competitively-priced voice tariffs in the industry – right into the foreseeable future. This is why we have acted swiftly to lodge the required paperwork with Icasa, to give our customers surety that this rate is not merely available on a promotional basis, but is part of our long-term pricing strategy,” the company said.
“Effective 7 May 2014, the 79c rate will be a permanent price plan for our PayAsYouGo customers,” said chief marketing officer Brian Gouldie.
MTN reduced its pay-per-second prepaid price-plan to the flat rate of 79c per minute to all networks, on 14 April 2014, charged on a per-second basis.
Its move puts enormous pressure on Cell C, which used to be able to claim that its 99c/minute tariff was the lowest regulated call rate in South Africa.
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Cell C has failed to cut its rates, despite a recent high court judgment that resulted in a 20c/minute cut in call termination rates — the fees operators charge each other to carry calls between their networks — until the end of September. Cell C enjoys “asymmetry” in the rates, whereby MTN and Vodacom pay it 44c/minute to carry calls onto it network. It pays 20c/minute for calls sent in the other direction.
MTN said that prepaid customers on alternative price plans (such as its Zone dynamic tariffing scheme and those on its call-per-second plan), are able to migrate to the 79c deal. — (c) 2014 NewsCentral Media