MTN CEO vs MTN SA CEO – what is the truth?

Cracks in MTN’s arguments about the new call termination regulations are starting to show with MTN CEO Sifiso Dabengwa’s statements about the issue contradicting MTN SA CEO Zunaid Bulbulia’s views.

  • In a column on 20 February 2014 Bulbulia wrote that “there is no direct link between retail and wholesale (termination) rates”.
  • However, in a Business Day TV interview on 5 March 2014 Dabengwa said that “over time lower retail rates will follow lower mobile termination rates”.

Dabengwa did explain that there is an exaggeration on the impact of mobile termination rates (MTRs) on retail rates.

“Retail rates are all about what is the strategy or tactics of the operation. It does not follow that reducing MTRs is going to necessarily have a reduction in retail rates,” he said.

Despite the explanation, the fact that Dabengwa confirmed that lower retail rates will follow lower mobile termination rates is not in line with Bulbulia’s previous statements.

MTN was asked for comment regarding the contradictory statements from the two MTN executives, but the company did not respond by the time of publication.

How much money will MTN really lose?

There is also uncertainty on what the exact financial impact of the new call termination regulations will be on MTN South Africa.

  • In its court documents, MTN said that the new 2014 call termination rates will cost the company R142,931,363 in lost aggregated interconnect revenue per month. The yearly loss, it follows, will be R1.7 billion.
  • In his Business Day TV interview Dabengwa said that the impact will be “anywhere between R500 million and R1 billion from a top line point of view”.

There is a significant difference between R1.7 billion and “anywhere between R500 million and R1 billion”. This raises the question as to why the numbers are not the same.

MTN was asked for comment regarding the different numbers about lost interconnect revenue, but the company did not respond by the time of publication.

More on the call termination regulations, 2014

While others talk, we deliver: MTN SA CEO

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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MTN CEO vs MTN SA CEO – what is the truth?