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SA's 'mobile price war' - the aftermath

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 05 Nov 2012
Cell C set the wheels of a 'mobile price war' in motion in May, sparking counter-deals from SA's other mobile players.
Cell C set the wheels of a 'mobile price war' in motion in May, sparking counter-deals from SA's other mobile players.

When former Vodacom CEO Alan Knott-Craig re-entered the cellular telecommunications arena last year - this time as CEO of third operator Cell C - the industry braced itself for a shake-up in mobile pricing.

About a month after having taken the reins, Knott-Craig duly started what industry observers have dubbed a "mobile price war" when he introduced the market to the operator's now trademark "99 Cents For Real" price plan. The first of a barrage of deals to follow - a prepaid voice product that saw prepaid call rates dropping by more than 34% - immediately drew a reaction from rival Vodacom, thus setting the wheels of war in motion.

Analysts have said the level of competition Knott-Craig has brought to the table can only benefit the consumer in the short- and long-term. Here are some of the products and newly-instituted tariffs, sparked by the six-month "price war" thus far, that have made headlines:

  1. 8 May: Knott-Craig fires the first pricing salvo, in the enterprise space, with the launch of a least-cost routing service that sees mobile calls drop to 99c a minute.
  2. 15 May: Cell C slashes broadband prices by more than half with the introduction of a trio of data promotions for postpaid and prepaid customers.
  3. 16 May: Cell C introduces its "99 Cents For Real" tariff with a prepaid product that cuts off-net and peak call tariffs to 99c per minute, with per second billing from the first second.
  4. 16 May: Vodacom returns fire with "Freedom 99" - a promotion that also allows customers to make off-net, anytime calls for 99c per minute - but on a per minute billing system.
  5. 29 May: Cell C introduces what is then a promotion on international calls to five countries, seeing costs drop by 91%, to 99c per minute on per second billing.
  6. 6 June: Cell C extends its 99c tariff beyond prepaid as contract rates also drop to 99c per minute on per second billing.
  7. 14 June: Knott-Craig says the 99c international rates are here to stay as the promotion is instituted as an official tariff. Hong Kong and Australia are added to the introductory five countries (the US, UK, India, Pakistan and China) the rate applies to.
  8. 28 June: Cell C's 99c International tariff is extended to a further 27 countries in Africa and beyond, followed by the addition of more countries - bringing the total to 38 - about two weeks later. The total increases to 177 by the end of August.
  9. 5 August: 8ta enters the battlefield with the launch of an aggressively-priced prepaid offer that effectively gives subscribers free, open-use airtime. "8ta More" rewards customers with instant airtime on a sliding scale when they recharge with R10 or more.
  10. 22 October: Vodacom responds to Cell C's movement on the international front with a three-month promotion that introduces the lowest rates in SA (at the time) for overseas calls - 89c per minute on per second billing - to 52 destinations.
  11. 24 October: Cell C's counter-attack sees calls to 50 international countries dropping to 85c per minute - making this SA's new "lowest international call rates".
  12. 25 October: 8ta announces what it terms a game-changer - "8ta Unlimited" - unlimited voice calls to any national mobile or fixed-line network at a flat monthly rate.
  13. 31 October: MTN enters the international combat zone with a conditional international promotion. The MTN Zone International Calling promotion offers discounts of between 10% and 100% on its current fixed international calling rates, to designated countries.
  14. 1 November: Cell C brings out its last data promotion for the year - a suite of two data packages offering Internet access for about R9 per GB.
  15. 1 November: Vodacom reveals a seasonal promotion - "Double your Summer" - that sees prepaid, top-up and contract customers doubling the value of certain purchases. The promotion ends on 14 December.

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