Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News
      Another windfall for Datatec shareholders - Jens Montanana

      Another windfall for Datatec shareholders

      19 June 2026
      WhatsApp starts charging South Africans - for the extras

      WhatsApp starts charging South Africans – for the extras

      19 June 2026
      AI agents are coming to your Visa card

      AI agents are coming to your Visa card

      19 June 2026
      Naspers signals core earnings surge ahead of results

      Naspers signals core earnings surge ahead of results

      19 June 2026
      Home affairs bookings get a security overhaul

      Home affairs bookings get a security overhaul

      19 June 2026
    • World
      Google on the hook for what its AI tells users, court rules

      Google on the hook for what its AI tells users, court rules

      15 June 2026
      How Russians juggle VPNs to outwit the Kremlin

      How Russians juggle VPNs to outwit the Kremlin

      15 June 2026
      Amazon CEO flagged Anthropic AI risks to Washington - Andy Jassy

      Amazon CEO flagged Anthropic AI risks to Washington

      14 June 2026
      Trouble at Xbox

      Trouble at Xbox

      11 June 2026
      Meta declares war on Israeli spyware firm

      Meta declares war on Israeli spyware firm

      8 June 2026
    • In-depth
      AI boom sparks rally, frenzy and fear

      AI boom sparks rally, frenzy and fear

      11 June 2026
      Every plug-in hybrid on sale in South Africa, ranked by price - Lamborghini Temerario

      Every plug-in hybrid on sale in South Africa, ranked by price

      7 June 2026
      What Wi-Fi 8 will mean for wireless networks

      What Wi-Fi 8 will mean for wireless networks

      1 June 2026
      Alfa's electric rebel - Alfa Romeo Junior Elettrica Veloce

      Alfa’s electric rebel

      29 April 2026
      Africa switches on as Europe dims the lights

      Africa switches on as Europe dims the lights

      9 April 2026
    • TCS
      Watts & Wheels S1E6: 'A flawless Alfa and a bakkie that divides'

      Watts & Wheels S1E6: ‘A flawless Alfa and a bakkie that divides’

      17 June 2026
      Watts & Wheels S1E6: 'A flawless Alfa and a bakkie that divides'

      Watts & Wheels S1E5: ‘A Bentley of the bush and a car that swims’

      8 June 2026
      TCS | Charge's R1.8-billion bet on an off-grid EV future - Charge chairman Joubert Roux

      TCS | Charge’s R1.8-billion bet on an off-grid EV future

      18 May 2026
      TCS+ | The Up&Up Group on the hidden cost of AI - Jason Harrison

      TCS+ | The Up&Up Group on the hidden cost of AI

      13 May 2026
      Michael Rossouw

      TCS+ | The retirement decision most South Africans get wrong

      6 May 2026
    • Opinion
      Finish the job Mandela started - Farzam Ehsani

      Finish the job Mandela started

      18 June 2026
      The author, Fanie van Rooyen

      The US just showed it can switch off our AI

      17 June 2026
      The clock is ticking on South African banks' biggest advantage - Pambos Soteriades

      The clock is ticking on South African banks’ biggest advantage

      9 June 2026

      Clashing judgments leave South Africa’s crypto law unsettled

      2 June 2026
      The clock is ticking on South African banks' biggest advantage - Pambos Soteriades

      The trap inside South Africa’s banking MVNO boom

      1 June 2026
    • Company Hubs
      • 1Stream
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • Ascent Technology
      • AvertITD
      • BBD
      • Braintree
      • CallMiner
      • CambriLearn
      • CM Telecom
      • Contactable
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • HOSTAFRICA
      • Incredible Business
      • iONLINE
      • IQbusiness
      • Iris Network Systems
      • Kaspersky
      • LSD Open
      • Mitel
      • NEC XON
      • Netstar
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Telviva
      • Tenable
      • Vertiv
      • Videri Digital
      • Vodacom Business
      • Wipro
      • Workday
      • XLink
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Financial services
      • HealthTech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Policy and regulation
      • Public sector
      • Retail and e-commerce
      • Satellite communications
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Opinion » Craig Wilson » Gloves off in mobile price war

    Gloves off in mobile price war

    By Craig Wilson17 May 2012
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    It’s no secret that despite having the longest-standing mobile networks on the continent, SA still has some of the highest mobile call rates in Africa. This week, Cell C went some way to correcting that when it announced it was cutting prepaid rates, and hinted that new post-paid pricing will follow soon, but there’s arguably still a long way to go.

    On Wednesday, Cell C announced it was dropping prepaid call rates to 99c/minute regardless of the time of day or destination network. Within minutes, Vodacom responded with its own price cut, that appeared, at first glance, to match Cell C’s rate.

    Vodacom’s offering, however, sees customers billed 99c for the first minute, and then in 30-second increments thereafter. Cell C’s new prepaid plan, on the other hand, is billed per second from the first second, making it much better priced and, more importantly, the more transparent of the two offerings.

    Some of the reason Cell C was able to make the price cut is that it enjoys preferential mobile termination rates — the fees networks charge one another to field calls on their networks. Because Cell C has less than 20% market share, it pays a lower fee to Vodacom when receiving a call from a user on the latter’s network than the fee it has to pay when the reverse takes place.

    Vodacom argues it’s sweetened the deal by offering customers who recharge with R12 or more an additional 60 minutes of talk-time between midnight and 5am. The problem is, these bonus minutes are only applicable to on-net calls — that is, calls to other Vodacom users.

    While this may be of value to Vodacom users that have a long commute that requires them to rise before 5am, they still need to ensure that the person they’re calling is on the same network — and that they’re awake. With consumers having the ability to change networks and keep their number, it’s quite difficult to check if a call is, in fact, to a user on the same network — a number with a Vodacom prefix like 082 need not mean a Vodacom customer.

    Compared to Cell C’s straightforward offering, Vodacom’s is still rather opaque. And the value-add of free minutes is of limited use to most customers. Moreover, on a per-second basis, it’s simply more expensive.

    Cell C must be lauded for the simplicity of its new offering, preferential termination rates or not. Aside from the cheaper rates, it’s the lack of obfuscation that really sets the bar other operators should be aiming to match.

    MTN, meanwhile, has said it won’t be drawn into the price war, claiming that its “MTN Zone” plans mean its rates are already the most affordable in the market because it offers customers “free calls” through its “Mahala Thursday, Mahala Nights, Mahala Weekends and Mahala Day” time-based rates.

    That’s four separate pricing schemes with which consumers need to familiarise themselves if they’re to take advantage and save money. MTN’s pricing is arguably the most impenetrable of all the major players.

    It’s precisely these convoluted pricing plans that confuse consumers and allow operators to capitalise on consumers’ inability, or lack of desire, to attempt to decode the jargon and minutiae that has long pervaded SA mobile services.

    Consumers want simplicity and, in a market where disposable income and education levels span a gamut far broader than those of developed countries, the operator that can offer the most transparent and cheapest packages deserves the biggest market share.

    Cell C’s CEO Alan Knott-Craig has hinted that contract subscribers can expect price cuts soon and hopefully these will be similarly simple to understand and force both Vodacom and MTN to react. If they start seeing customers churning over to Cell C, you can bet they’ll respond in kind.

    Pricing of both voice and data needs to get to the level where operators are forced to compete on quality of service and unambiguous value-added services. With mobile termination rates set to fall again, and the Independent Communications Authority of SA having said it will continue to assess the rate beyond next year, retail price competition is going to intensify.

    At the end of the day, price cuts are good for operators and consumers alike. Consumers save money and operators are forced to innovate. In a mobile landscape like SA’s, where the incumbents have been able to make huge profit margins on voice and data for a decade and a half, this price war hasn’t come a moment too soon.

    Prices have a long way to fall, but at least someone’s made the first, crucial push to lower them.  — (c) 2012 NewsCentral Media

    • Craig Wilson is senior journalist at TechCentral
    Follow TechCentral on Google News Add TechCentral as your preferred source on Google


    Alan Knott-Craig Cell C Craig Wilson MTN Vodacom
    WhatsApp YouTube
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleEkurhuleni lifts fibre moratorium
    Next Article Smaller players back call for MTR cut

    Related Posts

    GSMA tells Africa to copy South Africa on devices

    GSMA tells Africa to copy South Africa on devices

    17 June 2026
    The millions Vodacom spends protecting its CEO - Shameel Joosub

    The millions Vodacom spends protecting its CEO

    14 June 2026
    The missing number in Vodacom's annual report - Nkosana Makate please call me

    The missing number in Vodacom’s annual report

    12 June 2026
    Company News
    Moving past the pilot: inside the CloudZA and AWS closed-door AI executive roundtable

    CloudZA and AWS chart the road from AI pilots to production

    19 June 2026
    The role of edge infrastructure in South Africa's AI leap - OADC Open Access Data Centres

    The role of edge infrastructure in South Africa’s AI leap

    19 June 2026
    BBD's new FinOps white paper: your road map to kill cloud waste

    BBD’s new FinOps white paper: your road map to kill cloud waste

    19 June 2026
    Opinion
    Finish the job Mandela started - Farzam Ehsani

    Finish the job Mandela started

    18 June 2026
    The author, Fanie van Rooyen

    The US just showed it can switch off our AI

    17 June 2026
    The clock is ticking on South African banks' biggest advantage - Pambos Soteriades

    The clock is ticking on South African banks’ biggest advantage

    9 June 2026

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Latest Posts
    Another windfall for Datatec shareholders - Jens Montanana

    Another windfall for Datatec shareholders

    19 June 2026
    WhatsApp starts charging South Africans - for the extras

    WhatsApp starts charging South Africans – for the extras

    19 June 2026
    AI agents are coming to your Visa card

    AI agents are coming to your Visa card

    19 June 2026
    Naspers signals core earnings surge ahead of results

    Naspers signals core earnings surge ahead of results

    19 June 2026
    © 2009 - 2026 NewsCentral Media
    • Cookie policy (ZA)
    • TechCentral – privacy and Popia

    Type above and press Enter to search. Press Esc to cancel.

    Manage consent

    TechCentral uses cookies to enhance its offerings. Consenting to these technologies allows us to serve you better. Not consenting or withdrawing consent may adversely affect certain features and functions of the website.

    Functional Always active
    The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
    Preferences
    The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
    Statistics
    The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
    Marketing
    The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
    • Manage options
    • Manage services
    • Manage {vendor_count} vendors
    • Read more about these purposes
    View preferences
    • {title}
    • {title}
    • {title}