MTN CEO Rob Shuter says South Africans can expect an announcement from the company regarding data price cuts shortly.
Vodacom agreed to reduce mobile data prices by over 30% across all monthly data bundles for contract and prepaid customers.
Vodacom has also agreed to drop its monthly data bundle prices across the board by up to 40% over a two-year period.
The company will further extend personal discounts to customers in 2,000 areas where most of the population have income levels below the upper-bound food poverty line.
After this announcement, eyes were on MTN to see what their agreement with the Competition Commission would look like.
Shuter said MTN has had constructive engagement with the Competition Commission since their Data Service Market Inquiry was released.
“We are trying to find the right balance between addressing their concerns, giving more value, while making sure that our business is sustainable,” he said.
He said data pricing transformation in South Africa is desperately needed to make Internet access more affordable for entry-level customers.
“We believe strongly that this will be much easier to accommodate if we have additional spectrum to carry the traffic,” Shuter said.
“We are very close to finding each other. We expect to make an announcement shortly.”
The need for more spectrum
Shuter told Business Day that as you make data more affordable, you get more usage, you acquire new users, and you get price elasticity.
This has worked well for MTN in its other markets, but the challenge in South Africa is a lack of spectrum.
Shuter said MTN South Africa has less spectrum than in the 21 other countries where it operates.
“It is complex to implement this commercial strategy as we do not have the have the spectrum to carry the extra traffic,” he said.
The MTN CEO is upbeat on what is going to happen over the next 12-18 months, however.
He said there is good progress on the state getting ready to license new spectrum, which will make it easier to cut data prices.