Not quite a mobile price war
Telkom’s consumer mobile play, 8ta, is just over one week old, and already South Africa’s two largest mobile operators Vodacom and MTN have made their moves.
Just days after 8ta’s unveiling, MTN announced the “permanent” return of its MTN Zone 100% Mahala offer, which means subscribers can receive up to 100% discounts on calls and SMSes, depending on the time of day. But, the offer only applies to calls to other MTN numbers. MTN is obviously able to discount calls on its own network aggressively as it does not have to pay interconnect on those. The MTN Zone offer is intriguing as discounts are variable, depending on time of day and location (and network usage).
However, in order to switch to MTN Zone, you basically have to switch your prepaid package (*141*4#). With this change, comes a higher per minute charge: R2.50 for MTN to MTN calls, and R3 for MTN calls to other networks. SMSes are 75c. These are fairly significant increases from the MTN One Rate prepaid package. One Rate prices calls at 2.91c per second (which translates R1.75 per minute). SMSes are 50c.
The MTN Zone pricing is a very shrewd move by MTN. The higher per minute rate subscribers pay when there are no discounts should offset the discounted rates, giving a blended (effective) per minute rate comparable to the R1.75 it offers on One Rate. Remember that MTN has control of the discount rates throughout the day.
Vodacom on Monday announced (yet another) prepaid tariff plan, AllDay per minute, offering customers a flat rate of R1.40 per minute (all day), and a rate of 50c per SMS. It also has an AllDay per second plan which translates to R1.70 per minute, but is not billed in 30 second or 60 second chunks.
Two moves from the two largest players in two weeks. Cell C has hinted its new 4Gs HSPA+ network is just the start, and that it’s going to be increasingly aggressive in the market. However, attacks on 8ta “copying” its R1.50 per minute flat rate don’t help its “consumer champion” cause.
That’s not to say Cell C’s Easy Chat doesn’t offer compelling tariffs. It does. R1.50 per minute on the default allday package. This is billed per minute. If you make shorter calls, the per second rate bills from the very first second (at an effective R2.85 per minute peak, R1.30 per minute off-peak). Easy Chat standard means R2.50 per minute charges during peak times, and you’re billed per second after the first minute. This is for customers who make calls longer than a minute. Off-peak tariffs for the standard option are R1.25 per minute.
How do the operator’s cheapest flat rate prepaid packages stack up?
8ta (prepaid)
- 8ta to mobile: R1.50 per minute – calls billed per minute
- 8ta to landline: 65c per minute – calls billed per minute
- SMS: 50c
MTN (One Rate)
- Flat rate: R1.75 per minute – calls billed per second from the first second
- SMS: 50c
Vodacom (AllDay)
- Flat rate: R1.40 per minute – calls billed in 30 second increments after the first 60 seconds
- Flat rate (per second): R1.70 per minute – calls billed per second
- SMS: 50c
Cell C (Easy Chat allday)
- Flat rate: R1.50 per minute – called billed per minute
- SMS: 50c
Now we wait for the operators’ Festive Season promotions – and there will be many… It’s their busiest time of the year and we may yet see some heavy promotional discounting. That doesn’t mean it will stay in place, but the pressure on tariffs is there!
Mobile price war? << Give your views
*Hilton Tarrant contributes to “Broadband”, a column on Moneyweb covering the ICT sector in South Africa. He thinks we’re not going to recognise prepaid call tariffs in a year’s time, but then again, he’s a bit of an optimist.
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