{"id":93541,"date":"2013-12-12T15:31:53","date_gmt":"2013-12-12T13:31:53","guid":{"rendered":"http:\/\/mybroadband.co.za\/news\/?p=93541"},"modified":"2013-12-13T08:36:35","modified_gmt":"2013-12-13T06:36:35","slug":"what-is-mtn-afraid-of","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/cellular\/93541-what-is-mtn-afraid-of.html","title":{"rendered":"What is MTN afraid of?"},"content":{"rendered":"

MTN<\/a> SA CEO Zunaid Bulbulia<\/a> recently dismissed the need for much lower mobile termination rates and asymmetry, adding that Cell C<\/a>\u2019s lack of network investment is behind the company\u2019s financial woes (see The tough questions about MTR price cuts<\/strong><\/a> and\u00a0Icasa playing with fire with MTRs: MTN CEO<\/strong><\/a>).<\/p>\n

Cell C acting CEO Jose Dos Santos<\/a> hit back, saying that the Independent Communications Authority of South Africa (ICASA<\/a>) has a mandate to fulfil the objectives of the ECA.<\/p>\n

These objectives include the promotion of competition and ensuring prices are affordable for consumers. \u201cMTN seems to be ignoring this in its very narrow attack on Cell C in the media,\u201d he said.<\/p>\n

Cell C acting CEO Jose Dos Santos hit back, saying that MTN\u2019s approach raises the question \u2013 what is MTN afraid of?<\/p>\n

\u201cCell C and other smaller operators becoming stronger competitors with a consequent reduction in MTN\u2019s super-normal profits?\u201d asked Dos Santos.<\/p>\n

Cell C network investment<\/h3>\n

Bulbulia told MyBroadband that Cell C\u2019s financial challenges stem from the fact that they did not invest enough in their network over the years.<\/p>\n

According to Bulbulia, Cell C relied on Vodacom\u2019s network when it entered the market, and tried to act as an MVNO for too long. He added that no mobile operator can build a strong business based on off-net traffic.<\/p>\n

Dos Santos responded saying that it is common in many countries in the world where a new operator enters a market already dominated by other operators, that the new operator has to roam on an existing operator’s network.<\/p>\n

This is needed because providing nationwide coverage is indispensable for any mobile operator, and rolling out an entire national network to compete with existing national networks on day one is not possible.<\/p>\n

\u201cThis is not the same thing at all legally and factually as operating as an MVNO and MTN should know the difference,\u201d said Dos Santos.<\/p>\n

MTR cuts and lower retail prices<\/h3>\n

Bulbulia said that there is no statistical evidence of a link between rate of MTR cuts and a reduction in retail rates.<\/p>\n

He also said that he believes that Cell C could have launched a 99c per minute flat rate, even if MTRs were still R1.25. He said that if Cell C invested enough in their network, they would have enjoyed more on-net traffic which would have made these lower rates possible.<\/p>\n

Dos Santos said that this is simply not the case. \u201cMTRs act as a floor for retail prices, so if we still had to pay a wholesale price of R1.25 to terminate calls, Cell C would not have been able to drop its retail rates to 99c,\u201d said Dos Santos.<\/p>\n

He added that an increase in sustainable competition is a good way to reduce retail prices.<\/p>\n

\u201cLower termination rates are one remedy that ICASA can employ to reduce input costs making reduced prices possible,\u201d said Dos Santos.<\/p>\n

\u201cAsymmetry is another remedy ICASA can employ to strengthen competition in the market. Stronger and more sustainable competitors will have the effect of reducing prices to consumers.\u201d<\/p>\n

More on Icasa MTRs<\/h3>\n

Mobile termination rate cuts could spook investors<\/strong><\/a><\/p>\n

Icasa announces new draft call regulations<\/strong><\/a><\/p>\n

New call termination rates coming<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Cell C CEO asks if MTN is scared of smaller operators becoming stronger competitors and MTN losing some of its super-normal profits<\/p>\n","protected":false},"author":23,"featured_media":93553,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[14],"tags":[355,35,533,16074,42,16688,22775,503],"class_list":["post-93541","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cellular","tag-cell-c","tag-headline","tag-icasa","tag-jose-dos-santos","tag-mtn","tag-mtr","tag-mtrs","tag-zunaid-bulbulia"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/93541"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=93541"}],"version-history":[{"count":3,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/93541\/revisions"}],"predecessor-version":[{"id":93667,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/93541\/revisions\/93667"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/93553"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=93541"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=93541"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=93541"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}