As SA enters the first year of a three-year glide path to lower inter-network fees, and the upcoming holiday period prompts the expected seasonal specials to facilitate cheaper communication, offers may be focused on on-net calls and data incentives.
This is according to analysts and comes as the mobile voice price war - waged by Cell C in 2012 - starts to peter out in the wake of a new wave of all-time low mobile termination rates, and SA's mobile operators look to other headline offerings to win over and maintain subscribers.
Independent telecoms analyst Spiwe Chireka says, as we enter the festive season, mobile operators are clamouring to bring out offers to appease subscribers. However, she notes, whereas in the past they could afford to cut the off-net calls, their belts may be tighter this year. "So an on-net, win-win offering that costs them nothing, but makes them look good in the customers' eyes might be the answer for now," at least until the industry has gotten to grips with the new termination rate regime the regulator has put in place.
Last week, MTN, SA's second biggest mobile operator with a customer base of 26.7 million, debuted a reverse-charge call service - similar to the all-net Please Call Me USSD service -which has become widely-used by local consumers since about 2000. MTN's Pay4Me service allows its customers to reverse-call other MTN customers.
BMI-TechKnowledge director Brian Neilson says MTN's reverse-charge offering may be "quite powerful", given the popularity of Please Call Me to date, and also the strong motivation for parents to stay in touch with their kids.
Virgin Mobile SA (VMSA), meanwhile, broke a protracted silence this weekend, announcing its goal of signing up one million customers over the next three years, starting with an on-net call promotion that will run over the next three months, for starters.
While VMSA was reluctant to reveal current subscriber numbers, the mobile virtual network operator (MVNO) - which uses Cell C's network to provide services - has failed to gain much traction since launching in 2006. Going by previous figures, the MVNO has not managed to get much beyond the 500 000 line - still a fraction of SA's smallest operator, Telkom Mobile's, base.
Chireka says, on the face of it, she struggles to fathom how an on-net strategy will win consumers over to VMSA, while Neilson says it remains to be seen just how many customers will switch as a result of the offering, after weighing all the factors. "In my mind this would be more of a retention exercise," says Chireka.
Leading advantage
Ovum analyst Richard Hurst, who has consulted with local and other operators around on-net promotions, says, taking SA's market conditions into consideration, operators need to be more creative in attracting new customers to their networks.
He notes, however, "in this type of on-net battle often the larger players will have an advantage as they have the larger subscriber base and can easily pass these benefits to customers and maintain their margins".
While he does not perceive the mobile price war as being over, Hurst says "there has perhaps been a lull in the battles with operators looking at other weapons in their arsenal to continue the fight for new subscribers, while retaining and upselling existing customers". On-net offerings, he notes, will allow the operators to be creative in their products and services while marinating margins.
"I think that we can expect to see some interesting on-net services being developed by network operators for the enterprise customers and their end-users. In essence, what we are talking about here will be the consumerisation of the enterprise and their employees."
In January, Strand Consult predicted 2014 would see a continued challenge for operators' profitability, with heavy competition and falling termination rates being two of the factors underpinning this.
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