“We’re guilty” – MTN to Cell C
The war of words between MTN and Cell C continued on Sunday, 16 March 2014, with MTN lashing out against Cell C in an advertisement in the Sunday Times.
Taking out a double page spread for the advertisement, MTN used the space to publish the following “open letter” to Cell C:
Dear Cell C. You are right.
You said we are making billions, and that is correct. We are also guilty of investing 83% of those billions, back into South Africa. We’re guilty of inventing PayAsYouGo, a world-first product that opened the world of cellular connectivity to South Africans from all walks of life, instead of just the wealthy. We’re also guilty of playing a major role in the success of Africa’s first World Cup. We’re guilty of being a major taxpayer who contributes to the creation of employment for thousands of South Africans. We’re guilty of introducing Mahala calls to South Africa, which forced our competitors to cut their prices. We’re guilty of not wanting to fight with you, because there are millions of South Africans that we’d rather fight for.
We believe they deserve better. They deserve a network that works. A network that hardly ever drops their calls. A network that offers access to world-class Internet, all across our country.
A truly South African network that creates lasting infrastructure, investments and even wealth. For everyone.
MTN We’re Guilty advertisement scaled
MTN’s claim that it invented PayAsYouGo is curious, as credit for developing the prepaid cellular package as we know it today has often been attributed to Vodacom.
In his biography, Second is Nothing, Alan Knott-Craig said that the managing director (MD) of MTN at the time, Bob Chaphe, went to the then-MD of Telkom and urged him to veto the launch of prepaid.
At the time, Telkom still owned 50% of Vodacom and according to Knott-Craig, Chaphe was concerned that he was destroying the classic cellphone business model.
Mobile termination rates
The battle in the media between Cell C and MTN is over new mobile termination rates introduced by the Independent Communications Authority of South Africa (Icasa).
MTN and Vodacom are opposed to the new rate regime, which dramatically reduces the maximum fees operators may charge one another to connect calls to one another’s networks.
Crucially, the new rates also grant large asymmetries to Cell C and Telkom Mobile. This means that Cell C can charge MTN and Vodacom significantly more to connect calls to its network than they can charge Cell C.
Both MTN and Vodacom have filed court papers opposing the new termination rates, though MTN started its legal action first.
Cell C fired the opening salvo against MTN some weeks ago in an advertising campaign accusing the yellow network of fighting to keep mobile rates in South Africa high.
The network went so far as to say that MTN subscribers that opted to stick with the network were in effect funding MTN’s court action against Icasa’s new termination rate regulations.
More termination rate articles
Vodacom, MTN, Cell C wars over MTRs to cause collateral damage
What Vodacom, MTN, Cell C, Telkom really mean
MTN legal action caused higher Cell C prices: source
MTN considering legal action against Cell C
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