It is hard not to be cynical when a giant such as MTN announces a new strategy to provide affordable cellphones for South Africans under the guise of empowerment.<\/p>\n
MTN said on Monday it had introduced low-cost cellphones with multi-functional features to meet the needs of mass and emerging market consumers.<\/p>\n
They claim the cheaper cellphones will empower those who were previously excluded from the cellular market due to affordability and access.<\/p>\n
Rival Vodacom already has 26 million cellphones operating on its network so MTN may find that the empowered market they so keenly covet has already been empowered.<\/p>\n
Given the hefty profits in the cellphone market, the only empowerment that seems to be taking place is among the fatcats calling the tune at the country’s cellphone operators.<\/p>\n
Is there genuine empowerment in offering a cheap phone when the recipient has to spend on the instrument and airtime?<\/p>\n
MTN’s cheapies go on sale from R200 to R600.<\/p>\n
Vodacom also have cheapies currently on sale from as low as R49 for some makes, but the catch is that consumers must buy a prepaid sim card for R199, which has R25 airtime.<\/p>\n
It is absurd that the airtime and sim card are cheaper than the instrument. A sim card without airtime is sold from 59c to R1.99.<\/p>\n
The competition authorities should look at this anomaly since consumers are forced to buy a sim card that costs more than the price of a cheap phone.<\/p>\n
Unless MTN comes up with something different, it looks as if the only thing they are going to empower is their own profit margin.<\/p>\n