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MTN gambles on slashing mobile data rate

By Tracy Burrows, ITWeb contributor.
Johannesburg, 08 Apr 2005

MTN says it is "taking a gamble" by cutting the cost of its mobile data rates in a bid to up subscriber numbers.

MTN is promoting its new rates, to be launched on Monday, as "some of the lowest in the world".

The bundles cut the costs of mobile data from R50 per MB to a maximum of R2 per MB, says Ashraff Paruk, GM of product and innovation, MTN SA.

"With the combination of MTN`s multi-bearer data strategy (GPRS, GPRS+, EDGE and 3G) and the reduction of costs, MTN aims to take broadband to everyone in SA."

Paruk says the move is a calculated gamble aimed at dramatically boosting subscriber numbers and encouraging corporates to make more use of the services in daily business operations. He says the mobile operator hopes to see a four- or five-fold increase in the number of subscribers using the services within the next year or two. The low prices will become feasible as subscriber numbers increase, he says.

"This is a gamble, but I don`t see us turning back in terms of the prices. Our research has shown that cost was a barrier to uptake."

MTN will this weekend launch a campaign to promote the bundles. The campaign will be reinforced during the launch of MTN`s 3G services within the next few months.

The three new options for bundled data tariffs available to contract subscribers are: 10MB, 100MB or 1GB. The 1GB option has a subscription fee of R499 per month, an in-bundle rate of R0.49 per MB and an out-of-bundle rate of R1.25 per MB. Similar bundled tariffs will be launched to MTN prepaid customers later this year.

For new subscribers there are also two new data-only price plans. The 1GB price plan with a free card-phone on a 24-month contract has a subscription fee of R649 per month, an in-bundle rate of R0.49 per MB and an out-of-bundle rate of R1.25 per MB.

The 1GB price plan without any new hardware, also on a 24-month contract, is available at a subscription fee of R499 per month, an in-bundle rate of R0.49 per MB and an out-of-bundle rate of R1.25 per MB. EDGE data cards will be available to the market by the end of the month.

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