MTN South Africa has become the second mobile operator in South Africa, after Vodacom, to announce plans to cut prices for data services following a Competition Commission investigation into the market.

There are three main areas to the adjustments, namely the affordability of monthly prepaid bundles, the provision of free lifeline data and the zero-rating of data for public-benefit service websites.

The company has developed what it calls “a set of voluntary undertakings in the form of a social compact to further address the affordability of data services for its customers and MTN remains in discussion with the CompCom on the options to formalise these elective solutions and the implementation thereof”.

Unlike Vodacom, it has not reached reached a legal settlement with the commission. CEO Godfrey Motsa said he hopes that will happen next week. “In the substance of what is being presented today, there is agreement,” he sad in response to a question from TechCentral. “We still need to formalise the legalities around the agreement.”

With regard to monthly prepaid data bundles, MTN South Africa will, in April 2020, reduce the price of its monthly bundles of 1GB and below by between 25% and 50%, Specifically, the 1GB monthly bundle will decrease by 33% to R99. MTN South Africa CEO Godfrey Motsa said R99 is the most the company’s customers will pay for 1GB. Other price cut details will be announced before their implementation in mid-April.

In terms of lifeline data, MTN South Africa will provide each of its customers 20MB of free data daily – or the equivalent of 600MB per customer per month – with immediate effect through its instant messaging platform, Ayoba (the operator’s competitor to WhatsApp). It will also offer “open Internet browsing” between midnight and 5am daily using the 20MB daily allocation, but only from 1 July.

Ayoba currently has 500 000 customers in South Africa.

Zero-rated websites

MTN currently offers zero-rated data access to a range of websites, including those operated by schools and universities.

These will form part of the broader public-benefit website service. In April 2020, MTN will extend the websites that form part of the public-benefit service to also include health, public universities, vocational colleges, educational resources as well as employment sites based on terms and conditions and criteria defined by MTN and after application and approval from MTN.

MTN South Africa will offer a monthly 500MB free data access to public-benefit services websites every month, amounting to 6GB/year, for each of MTN the company’s 29 million customers.

“While there will be pressure on MTN South Africa’s short-term financial performance from these initiatives, MTN believes that the reduction in pricing will be compensated over time by elasticity and customer growth, and growth in prepaid data service revenue will return in a couple of quarters,” it said.