While others talk, we deliver: MTN SA CEO
It is one thing to claim to be an innovator, but it is a different ballgame to back that up with facts. As a company that traces its genesis to the birth of democracy in South Africa 20 years ago, it is no surprise that MTN has embodied the “Can Do” spirit espoused by the born free generation.
MTN has, in a very short time, blazed a trail in the telecommunications sector and became arguably, the most inspirational and positive story to be told since the miraculous political transition in South Africa in 1994.
MTN refuses to be drawn into a mud-slinging exercise, but urges its subscribers and consumers in South Africa to let the facts speak for themselves. Since its formation 20 years ago, MTN played a catalyst role in facilitating access to telecommunication service for a large section of the population through the introduction of innovative and cutting-edge products and solutions, tailored for the needs of each one of our customers. In the process, we have pioneered many industry firsts, both locally and globally.
For instance, in 1996, MTN was the first company in South Africa to pioneer a prepaid payment solution, an innovation that fast-tracked and extended mobile connections to millions of people not only in South Africa, but on the continent as well. MTN was also the first operator to launch a dynamic tariffing billing system, better known as MTN Zone. Just these two worldwide innovations resulted in MTN opening up telecommunications to a large proportion of the citizens of South Africa. As a result, potential customers saw the value that we were offering and flocked to MTN and sent our prepaid customer base soaring.
MTN has driven down the costs of telecommunications over the years without compromising or skimping on the quality of its network. Even when Mobile termination rates were stable, MTN decreased its retail rates to its consumers.
Telecommunication retail prices have dropped remarkably over the years despite the marked increase in the prices of fuel and electricity. Why are we mentioning electricity? Because MTN is one of the largest users of electricity in South Africa and such costs contributes to the cost base of MTN. The costs of rolling out the network have increased substantially over the years as MTN continued to expand and improve its infrastructure. This has been exacerbated by the worsening exchange rates and the increased costs of skilled personnel and equipment. However, this did not dissuade MTN from improving its network as it sought to give its subscribers and customers a world class network.
During the last decade, telecommunication retail prices have plunged 60% without any need for regulatory intervention on mobile termination rates. The mass adoption of mobile technology, which exceeded even the most ambitious forecasts, happened on the back of significant investment in infrastructure and distribution and was fuelled by innovative and cutting edge products and solutions offered by industry players such as MTN.
Let’s clear up one misconception right up front – there is no direct link between Mobile termination rates and retail pricing. This is not unique to South Africa and is a well-established fact in the global telecommunication industry.
Second key issue – asymmetry. Given that there is no direct link between retail prices and mobile termination rates, we cannot understand the justification for a proposed large asymmetry.
The new termination rates proposed by ICASA will permit some operators to charge termination rates that are four times as high as the price charged by MTN for terminating calls on its network. How overcharging the larger networks’ subscribers to call smaller networks will deliver cheaper prices for all South African is something neither ICASA nor the recipient of the so-called “asymmetry” has managed to explain. To illustrate this problem by way of a sporting analogy – If MTN were a soccer team, our reward for being top of the log for many years is that the referees’ association decides that from next season, every goal scored by an opposing team will count as two goals. This practice would be blatantly unfair, and would reduce the sport to farce. The bizarre outcome of the asymmetry is that the majority of South Africans on the two bigger networks now need to pay another tax to call someone on a smaller network – the customers’ reward for choosing the best is that you must subsidise the mediocre.
Regular reference is made to the fact that MTN and Vodacom enjoyed “asymmetry” from Telkom at the beginning of the industry in 1994. Firstly, it is a well-established principle that the cost base of a mobile network is indeed higher than a fixed network and this is reflected globally that MTR’s are higher than fixed termination rates. – South Africa is therefore very much in line with best practice as far as this is concerned.
But what is conveniently not stated is that it is fact that mobile operators who came on to the stage later on also charged a higher MTR than it paid in fixed termination rates to Telkom . It is also a well-established principle that new mobile players enjoy a small asymmetry when they start their operations – this is usually for 3 to 4 years only – how any network can claim to be new after more than a decade in the industry is opportunistic.
MTN’s cellular voice network provides coverage to 99 percent of the population, with over 75% of the population able to access MTN’s 3G and 3G+ broadband network. This extensive network footprint is borne from the substantial and on-going investment in our infrastructure aimed at ensuring that our customers have access to the latest digital technology irrespective of where they are in South Africa.
Further demonstrating our commitment to revolutionise the telecommunications industry and bridge the digital divide, MTN recently launched an affordable, simple and high-performance smartphone for under R500 – the MTN Steppa. This 3.5-inch touch screen device brings offers a world-class experience and gives people from all walks of life access to the information super highway. In fact, MTN were the first mobile company to offer its customers free access to Wikipedia.
This month, MTN also introduced a R30 MTN Pay As You Go bundle that will see our prepaid customers experience certain and reduced rates of 90c, 95c and 99c per minute (billed per second) for making On-net (MTN to MTN), All-net calls (MTN to all networks) or Off-net (MTN to other networks) calls respectively. MTN has always been committed to offering competitive retail products and will continue to do so.
Through word and deed, MTN has reaffirmed its commitment to South Africa and to the development of the South African ICT sector. MTN has and continues to invest extensively in its broadband network in order to give consumers a world class experience.
So next time you hear spurious claims, remember that MTN is a proudly South African company that invests more than 80% of its profits back in South Africa for the benefit of all South Africans.
As we celebrate the 20th anniversary of our hard-won freedom, think carefully who is best placed to ensure that South Africans continue to experience world class ICT services.
This column was written by Zunaid Bulbulia, CEO of MTN South Africa.
More on termination rate battle
Stop hurting South Africa: Telkom CEO to Vodacom, MTN
Vodacom institutes legal action against Icasa
MTN warns Icasa: scrap MTR price cuts
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