MTN has dropped prices on all its data bundles and data contracts with immediate effect. The company says it also decided to make a "wildly successful promotion" a permanent offering in its stable.
MTN says the price cuts affect all broadband offerings, with contract customers on the ExtendedData 350MB paying R209 per month. ExtendedData 2GB costs R449 per month, the company says.
Prices for pay-as-you-go data bundles have also been reduced. Prices for data bundles range from R1 per MB for 10MB, at a R10 monthly fee, to 19c per MB for 2GB.
MTN spokesman Ntombi Mhangwani says existing subscribers will automatically have their bundle size and tariff adjusted, and do not have to do anything to benefit from the price decreases.
The new bundles and tariffs will kick in at the next bill run for existing subscribers, she says.
Price war
MTN is also making its "buy 1GB get 2GB" for R399 promotion a permanent fixture in its stable of offerings.
The company initially implemented the promotion in early March, during what analysts called a broadband price war between MTN, Vodacom, iBurst and, to a limited extent, Sentech.
However, uptake of the offering was so strong - a 4 000% increase in demand - that MTN decided to make the offering permanent, says Mhangwani.
She says, with the increase in bundle size to 2GB, MTN felt it was also necessary to adjust the prices of the smaller bundles and price plans to make them competitive.
MyADSL founder Rudolph Muller says the price cut was inevitable. "The initial promotion helped MTN to stay in line with the tariff reductions Vodacom made earlier this year, but it had to drop its process to compete effectively with Vodacom."
He says if the company wants to reach its target market, it has to at least match prices set by its competitors. Vodacom charges R349 for a 1GB and R449 for a 2GB package.
Boosting networks
MTN says it is anticipating high levels of acceptance for the new product prices and has upgraded its networks accordingly.
"We have spent the last 90 days doing a number of significant performance and tuning enhancements to our network," notes Mhangwani.
She says the company added additional GPRS core equipment in Cape Town, to supplement the existing equipment in Gauteng. It also upgraded a number of its servers, increased international capacity and added a 45Mbps international link from Cape Town.
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