99c for mobile calls

First National Bank's (FNB's) ISP division has slashed call rates to mobile phones from its VOIP offerings to 99c per minute.

The bank tentatively entered the telecoms arena in May, when it released its broadband and VOIP services to customers at an already competitive rate. It initially started with a peak call rate to mobile at R1.79, which even then beat out MTN and Vodacom rates.

FNB now says its customers will enjoy rates of 99c per minute until the end of February next year.

“FNB Connect has heeded the calls of both the South African government and the average consumer for a review on call rates charged to consumers. As consumer champions, and in living up to our brand promise of 'helpfulness', we are taking the lead by offering all FNB customers on ConnectChat and ConnectXtra mobile calls at 99c per minute,” says Michael Jordaan, CEO of FNB.

The bank says the rate cut follows in the wake of interconnection negotiations between the major operators, which have taken centre stage in the media over the last few weeks. Many analysts and industry watchers have been warning that lower interconnect rates will not mean consumer rate cuts.

However, none have factored in the arrival of FNB Connect, since it has been adamant it is not directly competing in the telecoms market. The bank buys its connectivity in bulk at a wholesale rate and uses its additional capacity for the new products.

Despite being a limited offer, the new rate is competitive, even looking at VOIP competitors like Vox Telecom. Vox's current mobile call rate at peak times is R1.49, while off-peak calls to mobile cost 95c.

MTN and Vodacom both have far higher costs. MTN to MTN costs R2.50, while MTN to other mobile costs R3 per minute, both peak and off-peak. MTN's rates apply to its pay-as-you-go low level package, MTN Zone.

Vodacom recently dropped rates for prepaid to R1.85 to other Vodacom mobiles, and R1.99 to other mobile operators, both peak and off-peak.

Both Vox and FNB now offer calls on-net as a free service.