It’s war
With MNP, cellphone users will be able to switch to another network provider without having to change their number. The intention of MNP is to open up competition in the cellphone sector — which has been dominated by Vodacom and MTN — and drive down costs for consumers.
SA is considered to have among the highest telecommunications tariffs in the world.
The cellphone companies say they are ready to embrace MNP, and are hatching plans to outsmart each other.
The two smaller players, Cell C and Virgin Mobile , expect to be the biggest winners. In anticipation of MNP, Cell C launched Woza Weekend last month, enabling its customers to talk to each other for 50c a minute on weekends, claiming this is the lowest call rate available.
Cell C chief executive Jeffrey Hedberg said there were many more “exciting, cheaper” offerings in their bag. “We will be doing similar stuff to attract more customers, and I’m confident we’ll see a net increase. We see ourselves as the biggest winners.”
Cell C has 2.9million subscribers. Hedberg, however, could not divulge what market share they expected to win because parent company Oger Telecoms is in the middle of listing in London.
He acknowledged, though, that these offers would work only if the company had a set of systems and network capacity to support the offers.
“We are ready for MNP. We finalised some testing and we’re pleased with the readiness of our systems and network. We’re confident in the network we have for basic voice, SMS and broadband data .”
But he added: “ While we see it as a big advantage, we’re not expecting MNP to be a messiah for Cell C.”
Vodacom spokeswoman Dot Field welcomed the challenge.
“Time will tell what effect MNP will have on the sector. Whatever it does, the competition will be good for the ordinary person,” she said.
“It’s not our intention to start a price war, but if the market dictates that then we’ll have no choice.”
Vodacom believes MNP will open the field for it to further boost its market share. It claims to have 58% of the SA market, with about 20million subscribers — of which 75% is in the prepaid sector.
“Vodacom is a unique selling point, offering services and a network that is superior to our competitors — for example, walk-in customer services, loyalty programmes, a credit card and mobile TV,” said Field.
MTN is equally optimistic of growing its subscriber numbers.
“Customers will be looking for value, of which price is one consideration, and we will provide that,” said Bernice Samuels, general manager of strategy and marketing.
MTN warned, though, that migrating contract subscribers would have to settle the remainder of their contracts and any claw-back and termination charges.
Virgin could not be contacted for comment.
Analysts forecast a shake-up in the short term, but said the long- term impact will be minimal.
André Wills, managing director at research consultancy Africa Analysis, expects a lot of movement in the first six months, but said the number of migrations will stabilise within the first year of MNP launching.
This is in line with other international markets that have introduced number portability. Wills said that over time, the net gains or losses to each operator will be marginal, thus maintaining the rankings by subscriber numbers.
Wills expects a lot of the movement in the price-sensitive, low- income segment of the market.
In the long run, he said, service providers would adjust their marketing and value proposition to keep customers.
An analyst in Johannesburg, who declined to be named, expects overall impact on the companies’ revenue to be minimal.
This is because at the contract end of the market, which accounts for most of the cellphone market , the cost of moving may prove prohibitive.
“The prepaid segment may see a lot of movement, but as it contributes a lower proportion of revenue, this is unlikely to severely affect operators,” the analyst said.
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