MTN makes 79c call rate permanent

2014-04-25 11:30
(Duncan Alfreds, News24)

(Duncan Alfreds, News24)

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Cape Town - MTN has made its price reduction plan for prepaid users permanent, the mobile operator announced.

On Friday, MTN announced that its 79c per minute promotional call rate for prepaid users was finalised.

"Effective 7 May 2014, the 79c rate will be a permanent price plan for our PayAsYouGo customers," said Brian Gouldie, chief Marketing officer of MTN SA.

The price plan is seen as a direct assault on competitor Cell C. Cell C has long advertised its 99c per minute flat call rate.

MTN has had to navigate a public relations nightmare when the company took on Icasa or the Independent Communications Authority of South Africa over termination rates.

Ad campaign

Icasa had announced an asymmetrical price reduction for MTRs - the price that operators charge each other for calls that terminate of their respective networks.

It was proposed that MTRs favoured junior operators Cell C and Telkom Mobile, but MTN and Vodacom began legal proceedings, causing Icasa to backtrack.

Cell C created a damaging ad campaign which accused MTN of being greedy. That campaign eventually had to be withdrawn after a complaint from MTN.

"It's a very sad day for this country. MTRs have been around since we started... For the first time government has really gone out there with the regulator and said: 'Let's create a framework that allows fair competition,'" Cell C acting CEO Jose Dos Santos told News24 about MTN's legal challenge.

Termination rates make up a significant portion of the pricing structure and form part of an operator's revenue, but the perception that consumers are being unfairly charged has hurt the image of mobile operators.

"Consumers will maintain that they have been ripped off for far too long in this environment, and the public outcry in reaction to MTN's court action will be largely negative for the networks," said Steven Ambrose, CEO of Strategy Worx.

MTN had initially announced that the new price plan would be a limited offer, but the company has obtained regulatory approval from Icasa.


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