MTN has released a spate of new products is an attempt to recover from a troubling loss of local market share brought on by new legislation and the company's billing trouble.
The latest salvo fired by MTN is an offer of free weekend minutes to its customers, equal to the time spent calling during the week. “MTNSA Pay As You Go customers will receive 10 seconds free call time on weekends for every 10 seconds they talk during the week,” the company explained in a statement.
This is the second major announcement by the company over the last week, with it recently dropping its out-of-bundle data costs by 84%.
BMI-TechKnowledge MD Denis Smit says MTN is likely trying to claw back a large customer base it has been bleeding over the last year.
MTN was one of the hardest hit operators when new legislation, implemented by the Department of Justice, was introduced last year. The law requires all telecoms operators to register customers face to face, with clients having to provide proof of residence and ID documents.
The company lost over a million customers over the last year, far more than its largest competitor, Vodacom, which also lost out on new connections to the network.
The hack in its market share has made MTN sit up and take notice of a growing industry that has suddenly become competitive.
Smit says none of the operators can afford to take its customer base for granted anymore. “The gloves are off. The market is now mature and they have to start competing,” he adds.
With MTN's South African financials looking grimmer than ever, the company has had to fire out some innovative product ideas. It started with its Mahala campaign, which allows certain customers to have cheaper, or free calls, depending on the volume of traffic in the areas they are calling.
MTN also recently signed a deal with international football team Manchester United, allowing the operator to provide exclusive content and sell branded merchandise for the team in SA.
The data package price reductions are likely in response to a growing broadband war, with local Internet service providers culling the cost of bandwidth on DSL connections. “What else could MTN do? Business as usual was no longer working for them. They know they have lost market share and they have to be creative now,” adds Smit.
MTN's announcements have been met with silence from Vodacom; however, it is likely it will respond with its own promotional data or voice price drops. The operator would only say: “Vodacom will ensure its offerings are competitive and is constantly looking at ways to improve its value offerings.”
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