MTN’s costly cheapies?

It is hard not to be cynical when a giant such as MTN announces a new strategy to provide affordable cellphones for South Africans under the guise of empowerment.

MTN said on Monday it had introduced low-cost cellphones with multi-functional features to meet the needs of mass and emerging market consumers.

They claim the cheaper cellphones will empower those who were previously excluded from the cellular market due to affordability and access.

Rival Vodacom already has 26 million cellphones operating on its network so MTN may find that the empowered market they so keenly covet has already been empowered.

Given the hefty profits in the cellphone market, the only empowerment that seems to be taking place is among the fatcats calling the tune at the country’s cellphone operators.

Is there genuine empowerment in offering a cheap phone when the recipient has to spend on the instrument and airtime?

MTN’s cheapies go on sale from R200 to R600.

Vodacom also have cheapies currently on sale from as low as R49 for some makes, but the catch is that consumers must buy a prepaid sim card for R199, which has R25 airtime.

It is absurd that the airtime and sim card are cheaper than the instrument. A sim card without airtime is sold from 59c to R1.99.

The competition authorities should look at this anomaly since consumers are forced to buy a sim card that costs more than the price of a cheap phone.

Unless MTN comes up with something different, it looks as if the only thing they are going to empower is their own profit margin.

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MTN’s costly cheapies?