Cell C and Vodacom both slashed their prepaid rates on Wednesday, but MTN appears unwilling to be drawn into the unfolding price war, saying its rates are already the most affordable in the market, even compared to the latest cuts from its competitors.
Vodacom is offering calls at 99c/minute all day billed per minute for the first minute and in 30-second increments thereafter; Cell C is offering the same tariff, but at an effectively lower price because it bills per second from the first second.
MTN was widely expected to follow suit with price cuts of its own, but the operator’s chief marketing officer, Serame Taukobong, says that’s not going to happen.
Taukobong says the company’s “MTN Zone” price plan, which he says benefits 70% of its client base, offers customers “free calls” through its “Mahala Thursday, Mahala Nights, Mahala Weekends and Mahala Day” time-based rates.
“These offerings create real value by allowing customers to call at a zero rate for as long as the customer’s call lasts and not just one minute,” he says. “Through the MTN Zone Mahala offering, the most attractive rates are applicable at various times of the day, which allows customers flexibility for when they would like to call. Consequently, the new pricing announced by competitors would in fact be uncompetitive based on our customers’ current usage.”
However, Taukobong says MTN is continually reviewing its prices and packages. “Usage behaviour indicates that customers demand flexibility in the amount of time spent on a call,” he says, before adding what is clearly meant as a dig at Vodacom: “In this regard, price plans that charge a per-minute rate are not in the best interest of our customers as most calls last less than a minute. All of MTN’s price plans are true per-second billing, so customers do not have to pay for what they don’t use.”
There’s little doubt, though, that MTN will be watching customer churn figures carefully when the new Cell C and Vodacom rates take effect on Sunday. Expect it to react quickly if it starts losing market share. — (c) 2012 NewsCentral Media
