NETWORK operator MTN is slashing its number of cellphone contract variations from a mind-boggling 64 to less confusing 22, and promising that users will end up better off as well as less perplexed.<\/p>\n
It is also capitalising on a legal lull to ensure that its new contracts carry a 24-month lock-in period, however, after its rival Vodacom successfully challenged new rules aiming to force the operators to offer shorter terms.<\/p>\n
The new contracts will not dent MTN\u2019s profits, as it hopes the simpler structure and its claims of cheaper airtime will lure away customers from its rivals. This contract shake-up may be one of the last opportunities that an operator had to attract a flurry of customers in a market that was nearing saturation, said Donovan Smith, GM of consumer marketing.<\/p>\n
At the last count, Vodacom had 25-million users in SA compared with MTN\u2019s 15-million, with Cell C serving 5-million and Virgin Mobile half a million.<\/p>\n
Smith said contract customers had been neglected compared to pre-paid customers, as far more effort had gone into creating attractive pre-paid deals. But as the economic conditions worsened, lower spending pre-paid users would cut their spending or incur debts, making it sensible to focus on higher-end users.<\/p>\n
\u201cA vast amount of growth in the last six months has been at the bottom end of the market. They start to fall off a bit and bad debt increases in tough economic times. We hope to attract the higher end of the market,\u201d he said.<\/p>\n
\u201cOur tariffs are now far more competitive and the customer\u2019s bill is likely to come down, but the benefits are it\u2019s incredibly simple,\u201d he said.<\/p>\n
So far only 2-million of MTN\u2019s local users have signed long-term deals.<\/p>\n
The Independent Communications Authority of SA (Icasa) has been thwarted in its efforts to force the operators to offer shorter lock-ins, and to present bills that show how much users pay for airtime and how much for their handset subsidy.<\/p>\n
Vodacom applied for an interdict to block the new regulations last month, and Icasa agreed not to implement them until they were tested in court. That will involve a legal review of the regulations, as Vodacom claims Icasa overstepped its legal powers in drafting them.<\/p>\n
One new feature of MTN\u2019s Anytime contracts is a fixed call rate across all networks, so it will no longer be more expensive for MTN users to call someone on a rival network.<\/p>\n
Nor do the core packages offer different peak time and off peak rates, although three options remain for users who want off-peak discounts.<\/p>\n
The new packages also offer per second billing from the start, saving users from paying a full minute on shorter calls. Users will work out what they normally spend each month and pick the closest package, ranging from R50 to R1500 a month.<\/p>\n
They can spend that on voice, SMS or multimedia messages and internet access. Usually those carried extra costs as the existing contracts were structured around voice minutes only, Smith said.<\/p>\n
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