MTN has stepped up its tactics on the battlefield in what has been called the telecoms price war of the year, slashing data and prepaid prices and extending its Zone offerings.
In the prepaid arena, MTN yesterday said its One Rate prepaid plan tariff would be reduced to R1.20 per minute - or 2c per second - to all networks and at all times, on per-second billing.
The new rates, which come into effect on Sunday, undercut Vodacom's Free4Sho prepaid price plans (introduced in February) - also R1.20 per minute to all networks, but on per-minute billing.
Serame Taukobong, chief marketing officer at MTN SA, says the new 2c per-second rates were motivated by the operator's analysis of the market's growth areas. The new aggressive tariff, he says, is part of MTN's multi-prong strategy and "enhances the prepaid stable". He says the new tariff is simple and can be taken at face value. "There is no catch."
Zone extension
At the same time, MTN has extended its Zone offering, following "overwhelming customer demand" for the products.
As of today, MTN's Zone promotion is extended through Mahala Nights (offering up to 100% discounts between 10pm and 5am), Mahala Day (offering up to 100% discounts between 6am and 6pm on weekdays) and Mahala Weekend (offering continued discounted rates from Friday evenings, to the end of the weekend).
This follows the recent introduction of the Mahala Starter Pack, which allows customers to migrate to another price plan, while keeping their current recharge benefits for six months.
Taukobong notes that products like MTN Zone talks to how people use voice and appeals to a broad sector of the South African market. "[These products] allow customers to connect a call even if they only have a 5c airtime balance. This provides a level of comfort for our base, because it enables them to stay connected even if they are not in a position to do so."
Mapula Bodibe, MTN SA's GM of consumer marketing, says the company is not targeting "headline pricing" in its latest campaign. "Value-add and a solid network infrastructure and quality service takes precedence over headline pricing."
Finally, MTN has also announced the extension of its international calling promotion whereby customers who are on the MTN Zone price plan get up to 100% discounted rates on calls to 200 international destinations.
The MTN Zone international calling promotion offers up to 100% Mahala discounts on international call rates, depending on the called destination.
Taukobong says MTN Zone is the operator's most popular tariff, with 70% (about 14 million customers) of its client base on this price plan.
Data dive
In another market move, MTN has reduced its Internet price plans for its contract and TopUp customers.
MTN's 2GB contract deals have been reduced in what Taukobong says effectively translates into customers paying as little as 5.8c per MB.
"The MTN 2GB packages have been reduced from R389 to R119 (with a device) per month [on a 24-month contract]."
A SIM-only contract (without a device), says Taukobong, works out to 4.8c per MB - at R99 per month.
MTN has also slashed prices on its Internet bundles, with denominations starting at R10. "These bundles are redesigned to easily be used as an add-on to any of the existing MTN Anytime contracts."
Internet devices, such as the Sharelink E5331 USB modem, have also been thrown into the mix, at R89 per month with 500MB data allocation per month.
Data-hungry market
MTN says, in addition to the 2GB offering, market research shows a great need for higher volumes of data, over 3GB.
To this end, says the operator, it will introduce three new data plans - of 3GB, 5GB and 10GB - to the data-hungry market "soon".
The enhancement of LTE offerings is also on the cards for this market, says MTN, with the operator declaring "ongoing plans" to encourage high-bandwidth users to migrate to LTE, freeing up additional capacity on the 3G network.
Bodibe says this is the start of an "ambitious programme" to push more 3G devices into the hands of the large contingent that is still on 2G - to be announced later in the year.
Taukobong adds: "MTN is initially targeting 30% of the sites that carry up to 80% of the network traffic. The rollout plan is to start with the dense urban areas and continue to roll out LTE to urban, semi-urban, and other areas as and when the frequency spectrum becomes available.
MTN's GM of product solutions, Mike Fairon, said yesterday that a range of LTE devices is on the horizon, including the Samsung S3, BlackBerry Z10, iPhone 5, iPad 4 and iPad Mini - as well as a router.
"There is a stringent quality testing process involved in bringing LTE devices to market and this is in many cases almost complete." Fairon says LTE devices can be expected "in coming weeks".
More to come
MTN's marketing and product team says these latest "value-add offerings" are not the end of the line, with more to come as the operator continues to study the market and respond to market behaviour and trends.
Taukobong says this Sunday's media will expand on the data deals touched on in its price plan announcement yesterday.
The latest move is also part of a strategy to align postpaid pricing to be "as competitive as prepaid pricing", says Bodibe.
Taukobong says the price plans will be subject to "continuous tweaking".
The price cut barrage by MTN comes after analysts predicted the price war was set to heat up with the dropping of wholesale interconnect rates (mobile termination rates, or MTRs) to an all-time low of 40c today.
In fact, IDC telecoms analyst Spiwe Chireka specifically flagged MTN as most likely to be the first to make a post-MTR cut move. "MTN might now come on board in the 99c war ? purely because the excuse of not being able to absorb price cuts will no longer hold."
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