Telkom Mobile has slashed prepaid call tariffs to 29c/minute on per-second billing for on-network calls and to 75c/minute to all other networks.

The new prepaid tariff plan, called Sim-Sonke, is “expected to blow the competition out of the water by offering the lowest standard mobile call rates in the country”, Telkom says in a statement.

“I see this as part of fixing our mobile business,” says Telkom group CEO Sipho Maseko. “Really innovating in product development is the right thing to do. We are re-basing the mobile proposition. We will be out there to compete. Mobile is not a poor cousin within Telkom. It’s a very important part of the Telkom family.”

On the new plan, customers who recharge with between R5 and R19,99 will receive five free on-net SMSes valid for the day or recharge. For R20 or higher recharges, there are 20 free on-net SMSes valid for seven days. Sim-Sonke customers will be able to make free and unlimited calls to other Sim-Sonke subscribers from 9pm to 6am. Those who recharge with R5 get free Sim-Sonke to Sim-Sonke calls valid from 9pm to 6am the following day. Customers who recharge with R20 get free evening calls for seven days from the day of recharge.

The launch of Sim-Sonke follows Telkom Mobile’s introduction of an unlimited voice prepaid plan earlier this year.

By implementing a low-cost model, Telkom Mobile is able to pass cost savings on to the consumer, says Telkom Mobile MD Attila Vitai.

Vitai says if mobile termination rates — the wholesale fees operators charge each other to carry calls between each other’s networks — were reduced from the current 40c/minute to 20c/minute, Telkom Mobile would pass on these benefits to consumers.

“People from government, take note. We’d be able to offer even lower prices to the people. Surely that is a good thing for the people and the economy? The rates charged by our competitors are more than most operators in Europe, yet GDP here is nowhere close to Europe.

“This really is a very key move and an important move for the economy and for Telkom,” Vitai says.

The Sim-Sonke plan “promotes sharing”, Telkom says. Starter packs, which are available from Telkom and Shoprite Checkers stores, contain two Sim cards. The idea is that customers will keep one Sim and give the other to a person they call a lot.

“By sharing Sim cards and encouraging others in their personal networks to join Sim-Sonke, customers can unearth the benefits that [the plan] offers, such as the free unlimited calls to other Sim-Sonke numbers.”