MTN absent from SA’s mobile voice price wars
- Parent Category: Mobile
- Published on 26 October 2012
South African mobile network rivals Vodacom and Cell C have gone head-to-head this week by slashing international voice tariffs. But one firm notably missing from this price war is MTN, the second biggest operator in the country with a 37% share of the country's mobile market.
South Africa has a saturated mobile market with research firms such as BuddeComm saying that the country, which has a 50 million population, has a mobile penetration rate over 100%. Mobile operator competition has therefore heated up in the nation, with a voice price war erupting.
Earlier this year, Cell C, with a 14.5% share of SA's mobile market, came out with an initial offer of 99c per minute for international calls to its customers. Vodacom, the country's biggest operator with 58% share of the market, then announced this week that it is launching its 89c per minute rate for international calls to 52 countries for both contract and prepaid customers. The promotion is to run from 21 October to 31 December.
Subsequently, Cell C hit back days later by unveiling South Africa’s “lowest international call rate” of 85c per minute for calls to 50 countries. This promotion is to last from 28 October to 31 January.
But despite announcements from these mobile networks, MTN has kept quiet and is yet to slash its voice tariffs.
A snapshot survey by ITWeb Africa of MTN South Africa's prices on its website reveals that it uses per-second-billing for contract customers making international calls. In terms of MTN South Africa’s prepaid users, call rates to almost 90 countries are published ranging from R1.19 to R2.89 per minute.
Senior research analyst at Informa Telecoms & Media in South Africa, Thecla Mbongue, says MTN’s international call rates are far higher than that of Vodacom and Cell C.
“Although national calls generate more revenues than international outgoing traffic at present, it is still necessary for MTN to react,” Mbongue told ITWeb Africa.
“The market being predominantly prepaid, nothing really stops MTN subscribers to acquire a secondary SIM cards with the competitor to make international phone calls,” she said.
Mbongue explains that MTN, with an overall subscriber base of 182.7-million across operations in Africa and the Middle East, needs retention and customer recruitment strategies.
The firm, therefore, appears unmoved by even mobile minnow 8ta’s move to cut its voice tariffs.
Yesterday, 8ta, which is owned by telco Telkom, also stepped into the voice price war by announcing that it plans to introduce unlimited voice calls for a fixed monthly price starting at R1 199 per month come November 1.
The 8ta Unlimited Voice All-Net offer available on a 24 month contract plan would allow customers to make unlimited voice calls to any of the country’s four mobile networks and fixed line networks at any time.
According to 8ta officials, the offer is aimed at heavy phone users and small businesses, which allows them to cap cost of calls regardless of usage.
“Mobile voice services have fast become the communication medium of choice for South Africans on the move,” said Amith Maharaj, senior manager, 8ta.
8ta is SA's newest mobile operator, having launched in 2010. According to Telkom, it recorded just over 1,1 million active mobile subscribers with a further 1,1 million classified as non-active subscribers towards the end of 2011.
Mbongue concludes that 8ta’s newly launched promotional plan could signal that the state owned mobile entity probably felt like it had to start addressing the small business market.