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Cell C drops 50c bomb

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 24 Jul 2014
Cell C CEO Jose Dos Santos has vowed to continue to blaze a trail in the price war.
Cell C CEO Jose Dos Santos has vowed to continue to blaze a trail in the price war.

"Consumer champion" Cell C has introduced a 50c per minute prepaid rate, which it says it will consider making permanent - depending on the regulator's new termination rate regulations, due to be published at the beginning of October.

This comes just over two months after the operator introduced a prepaid package priced at 66c per minute and post-paid packages priced at 79c per minute.

Cell CEO Jose Dos Santos says the latest price cut represents the company's guarantee to consumers that it will "continue to fight" for lower communication costs.

Dos Santos says the latest rate cut comes in the wake of "an overwhelming response" to the company's 66c offering. The new 50c rate will have the same structure as the 66c product, and SupaCharge benefits will not apply.

Available as of tomorrow, the 50c per minute (per-second billing) prepaid promotion will run until the end of September - which is also when the Independent Communications Authority of SA (ICASA) is expected to release its revised mobile termination rate regime.

MTR motivation

New inter-network fees came into being as of 1 April, despite Vodacom and MTN fighting these in court and ICASA being told by the South Gauteng High Court that they were invalid. The regulator was given six months to review the new rates and glide path - which greatly favour smaller players Cell C and Telkom Mobile - and publish new termination rate regulations.

Cell C says it will consider implementing the 50c rate as a permanent tariff as soon as there is clarity around mobile termination rates (MTR).

As of 1 April, MTRs for Vodacom and MTN are 20c - half the previous MTR rate - while Cell C and Telkom Mobile have been charging Vodacom and MTN more than double that (44c) to terminate calls on their network.

Vodacom today reported that it had lost R409 million in revenue because of lower mobile termination rates in the first three months of the year - the first indication of the effect of lower termination rates since the significant cut in April.

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